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G.R. No.

L-18170 August 31, 1963

NATIONAL BREWERY & ALLIED INDUSTRIES LABOR UNION OF THE PHILIPPINES, plaintiff-appellant,
vs.
SAN MIGUEL BREWERY, INC., THE INDEPENDENT SAN MIGUEL BREWERY WORKERS' ASSOCIATION and
ALL OTHER UNKNOWN NON-UNION WORKERS OF THE SAN MIGUEL BREWERY, INC., defendants-appellees.

This is an appeal directly coming from the Court of First Instance of Manila dismissing the complaint upon the petition of the
defendant San Miguel Brewery Workers' Association.

This case presents a question of first impression in this jurisdiction, namely, the validity of a union agency fee as a form of
union security.

Appellant National Brewery & Allied Industries Labor Union of the Philippines is the bargaining representative of all regular
workers paid on the daily basis and of route helpers of San Miguel Brewery, Inc.

On October 2, 1959, it signed a collective bargaining agreement with the company, which provided, among other things, that

The COMPANY will deduct the UNION agency fee from the wages of workers who are not members of the UNION,
provided the aforesaid workers authorized the COMPANY to make such deductions in writing or if no such
authorization is given, if a competent court direct the COMPANY to make such deduction. (Art. II, Sec. 4)

Alleging that it had obtained benefits for all workers in the company and that "defendant Independent S.M.B. Workers'
Association refused and still refuses to pay UNION AGENCY FEE to the plaintiff UNION and defendant COMPANY also
refuses and still refuses to deduct the UNION AGENCY FEE from the wages of workers who are not members of the plaintiff
UNION and remit the same to the latter," the union brought suit in the Court of First Instance of Manila on November 17,
1960 for the collection of union agency fees under the bargaining contract.

The lower court, in dismissing the complaint, held that there was nothing in the Industrial Peace Act (Republic Act No. 875)
which would authorize the collection of agency fees and that neither may such collection be justified under the rules of quasi
contract because the workers had not neglected their business so as to warrant the intervention, of an officious manager.
The trial court also held the rules of agency inapplicable because there was no agreement between the union and the
workers belonging to the other union as to the payment of fee nor was there, said the court, any allegation in the complaint
that the amount of P4.00, which the union sought to collect from each employee, was the expense incurred by the union in
representing him.

Its motion for reconsideration having been denied, the union appealed to this Court.

The right of employees "to self-organization and to form, join or assist labor organizations of their own choosing" (Sec. 3,
Republic Act No. 875) is a fundamental right that yields only to the proviso that "nothing in this Act or statute of the Republic
of the Philippines shall preclude an employer from making an agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is the representative of the employees as provided in Section
twelve." (Sec. 4[a] [4]).

The only question here is whether such an agreement is a permissible form of union security under Section 4(a)(4) as
contended by the union.

In the case of General Motors Corp., 130 NLRB 481, the National Labor Relations Board was faced with a similar question.
In that case, the union proposed to the company that employees represented by it and new employees hired thereafter be
required as a condition of continued employment after 30 days, following the date of the supplementary agreement or of their
initial employment (whichever was later) to pay to the union a sum equal to the initiation fee and a monthly sum equal to the
regular dues required of union members at each location. The company contended that the clause was illegal under Section
7 and Section 8(a) (1) of the National Labor Relations Act, as amended.1

In upholding the company's contention the Board held:


1
. . . any union-security agreement, including one providing for an agency shop, necessarily interferes with the
Section 7 right of employees to refrain from assisting a labor organization, and encourages membership in a labor
organization. Such an agreement is therefore clearly unlawful under Section 8(a) (1) and (3), unless it is saved by
the proviso to Section 8(a) (3) of the Act. That proviso permits an employer to make an agreement with a labor
organization "to require as a condition of employment membership therein on or after the thirtieth day following the
beginning of such employment or the effective date of such agreement, whichever is later .. [Emphasis supplied]
There is, however, no other provision in the Act which specifically legalizes the interference and encouragement
inherent in an agency-shop arrangement, and the only question here is whether such an arrangement can be lawful
under the National Labor Relations Act in a State like Indiana, where it is clear that an agreement requiring literal
membership is prohibited by State law. To hold the agency shop lawful, one would have to conclude that Congress
intended the word "membership" in Sections 7 and 8(a)(3) to encompass not only literal membership, but also other
relationships between employees and the union in the picture, while at the same time intending that the same word
in Section 14(b) 2 encompass only literal membership; or further, that Congress intended the word "membership" to
mean one thing in Indiana and a different thing somewhere else. Such reasoning I am not prepared to accept. Thus,
the conclusion is inescapable that an agency-shop arrangement, whatever its status under Indiana law, cannot be
lawful under the National Labor Relations Act in a State like Indiana where employment cannot lawfully be
conditioned on literal membership.

In support of their contention that an agency-shop agreement is lawful, the General Counsel and UAW rely on Public
Service Company of Colorado, 89 NLRB 418, and American Seating Company, 98 NLRB 800. Such reliance seems
misplaced as, unlike the instant matter, both cases involved a valid agreement, requiring membership as a condition
of employment, which was protected under the first proviso to Section 8(a) (3); and neither case involved a right-to-
work jurisdiction. Significantly, in both Public Service and American Seating, no legal impediment existed to preclude
the parties from entering into the contracts requiring all employees to be union members, and they made such
contracts. Thus they were free to waive membership and to require in lieu thereof some lesser form of union
security, such as an agency-shop clause.

The instant case is different in that, as indicated above, GM and UAW were not free under the National Labor
Relations Act to require of Indiana employees union membership as a condition of employment, and so they were
not free to require, as a condition of employment of such employees, any lesser form of union security, such as an
agency shop. For one cannot waive a right he does not have.

It may be argued that the Board reached this conclusion in view of the right-to-work law of Indiana and that a different result
might have been reached where, as in the Philippines, there is no right-to-work law. But the basic principle underlying the
decision in that case equally applies here, namely, that where the parties are not free to require of employees membership in
a union as a condition of employment, neither can they require a lesser form of union security. "For one cannot waive a right
he does not have." And herein lies the error into which the union has fallen in arguing that the agency shop agreement in this
case can be justified under Section 4 (a) (4) because "the lesser must of necessity be included in the greater."

For although a closed-shop agreement may validly be entered into under Section 4 (a) (4) of the Industrial Peace Act
(National Labor Union v. Aguinaldo's Echague, Inc., 51 O.G. p. 2899, We held that the same cannot be made to apply to
employees who, like the employees in this case, are already in the service and are members of another union. (Freeman
Shirt Mfg. Co. v. Court of Industrial Relations, G.R. No. L-16561, January 28, 1961.) Hence, if a closed shop agreement
cannot be applied to these employees, neither may an agency fee, as a lesser form of union security, be imposed upon
them.

It is true, as the union claims, that whatever benefits the majority union obtains from the employer accrue to its members as
well as to nonmembers. But this alone does not justify the collection of agency fee from non-members. For the benefits of a
collective bargaining agreement are extended to all employees regardless of their membership in the union because to
withhold the same from the nonmembers would be to discriminate against them. (International Oil Factory Workers Union
(FFW) v. Martinez, et al., G.R. No. L-15560, Dec. 31, 1960).

Moreover, when a union bids to be the bargaining agent, it voluntarily assumes the responsibility of representing all the
employees in the appropriate bargaining unit. That is why Section 12 of the law states that "The labor organization
designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of all employees in such unit for the purpose of collective bargaining in
respect to rates of pay, wages, hours of employment, or other conditions of employment."

2
The union's contention, that nonmembers are "free riders" who should be made to pay for benefits received by them is
answered in the concurring opinion of Mr. Jenkin in the General Motors case, supra at 498, thus: This statement of the limits
to permissible encouragement of union membership restricts unions, in contractually guaranteeing their own financial
security against "free riders," to agreements of the types contemplated by Congress, i.e., "permitted union shop" or
"maintenance of membership contract," both being agreements explicitly "requiring membership."

And now We come to the next point raised by the union, namely, that nonmembers should be made to pay on the principle of
quasi contract. The union invokes Article 2142 of the Civil Code which provides that —

Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one
shall be unjustly enriched or benefited at the expense of another. (Emphasis supplied)

But the benefits that accrue to nonmembers by reason of a collective bargaining agreement can hardly be termed "unjust
enrichment" because, as already pointed out, the same are extended to them precisely to avoid discrimination among
employees. (International Oil Factory Workers' Union (FFW) v. Martinez, et al., G.R. No. L-15560, Dec. 31, 1960).

Besides, as the trial court held, there is no allegation in the complaint that the amount of P4.00 represents the expense
incurred by the union in representing each employee. For the benefits extended to nonmembers are merely incidental.

Lastly, it is contended that the collection of agency fee may be justified on the principle of agency. In answer to this point, it
may be stated that when a union acts as the bargaining agent, it assumes the responsibility imposed upon it by law to
represent not only its members but all employees in the appropriate bargaining unit of which it is the agent. The Civil Code
states that agency is presumed to be for compensation unless there is proof to the contrary. (Art. 1875.) There can be no
better proof that the agency created by law between the bargaining representative and the employees in the unit is without
compensation than the fact that these employees in the minority voted against the appellant union.

WHEREFORE, the orders dated December 6, 1960 and December 20, 1960 of the Court of First Instance of Manila are
hereby affirmed, without pronouncement as to costs.

G.R. No. 158075 June 30, 2006

PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMOND HOTEL), Petitioner,
vs.
MANILA DIAMOND HOTEL EMPLOYEES UNION, Respondent.

The Court of Appeals, by the assailed decision of November 21, 2002,1 declared the strike staged by respondent, Manila
Diamond Hotel Employee’s Union (the union), illegal and its officers to have lost their employment status. It ordered,
however, among other things, the reinstatement and payment of backwages to its members.

On November 11, 1996, the union, which was registered on August 19, 1996 before the Department of Labor and
Employment (DOLE),2 filed a Petition for Certification Election3 before the DOLE-National Capital Region (NCR) seeking
certification as the exclusive bargaining representative of its members.4

The DOLE-NCR denied the union’s petition as it failed to comply with legal requirements, specifically Section 2, Rule V, Book
V of the Rules and Regulations Implementing the Labor Code, and was seen to fragment the employees of petitioner. 5

On June 2, 1997, Francis Mendoza (Mendoza), one of the Hotel’s outlet cashiers, was discovered to have failed to remit to
the Hotel the amount of P71,692.50 at the end of his May 31, 1997 duty.6 On being directed to explain such failure, Mendoza
claimed that after accomplishing his daily cash remittance report, the union president Jose Leonardo B. Kimpo (Kimpo) also
an outlet cashier, who signed the same and dropped his remittances.7

Kimpo, who was thus directed to explain why no administrative sanction should be imposed on him for violating the standard
procedure for remitting cash collections, informed that he was not aware of any such procedure.

3
Mendoza was subsequently suspended for one week, it being "the responsibility of the cashier to personally drop-off his
remittances in the presence of a witness."8 In the meantime or on July 14, 1997,9 he was re-assigned to the Hotel’s Cost
Control Department.10

Through its president Kimpo, the union later notified petitioner of its intention to negotiate, by Notice to Bargain,11 a Collective
Bargaining Agreement (CBA) for its members.

Acting on the notice, the Hotel, through its Human Resource Development Manager Mary Anne Mangalindan, advised the
union that since it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as such. 12

The union clarified that it sought to bargain "for its members only," and declared that "[the Hotel’s] refusal to bargain[would
prompt] the union to engage in concerted activities to protect and assert its rights under the Labor Code." 13

By Notice14 to its members dated September 18, 1997, the union announced that its executive officers as well as its directors
decided to go on strike in view of the management’s refusal to bargain collectively, and thus called for the taking of strike
vote.

Petitioner thereupon issued a Final Reminder and Warning15 to respondent against continuing misinformation campaign and
activities which confused the Hotel employees and disturbed their work performance.

The union went on to file a Notice of Strike16 on September 29, 1997 with the National Conciliation and Mediation Board
(NCMB) due to unfair labor practice (ULP) in that the Hotel refused to bargain with it and the rank-and-file employees were
being harassed and prevented from joining it.17

Conciliation conferences were immediately conducted by the NCMB on October 6, 13, and 20, 1997 during which the union
insisted on the adoption of a CBA for its members.18

In the meantime, or on or about November 7, 1997, Kimpo filed before the Arbitration Branch a complaint for ULP against
petitioner.19

More conferences took place between petitioner and the union before the NCMB.

In the conference held on November 20, 1997, the union demanded the holding of a consent election to which the Hotel
interposed no objection, provided the union followed the procedure under the law. Petitioner then requested that the election
be held in January 1998.20

The parties agreed to meet again on December 1, 1997.21

In the early morning of November 29, 1997, however, the union suddenly went on strike. The following day, the National
Union of Workers in the Hotel, Restaurant and Allied Industries (NUWHRAIN) joined the strike and openly extended its
support to the union.22 At about this time, Hotel supervisors Vicente T. Agustin (Agustin) and Rowena Junio (Rowena) failed
to report for work and were, along with another supervisor, Mary Grace U. de Leon (Mary Grace), seen participating in and
supporting the strike.23

Petitioner thus filed on December 1, 1997 a petition for injunction before the National Labor Relations Commission (NLRC) to
enjoin further commission of illegal acts by the strikers.24

Mary Grace, who was directed to explain her participation in the strike, alleged that she was merely trying "to pacify the
group."25 Petitioner, finding her explanation "arrogant" and unsatisfactory as her active participation in the strike was
confirmed by an eye witness, terminated her services, by communication sent on December 9, 1997, drawing her to file a
complaint for illegal dismissal against petitioner.26 Agustin, who was also terminated, filed a similar complaint against the
Hotel.27

An NLRC representative who conducted an ocular inspection of the Hotel premises confirmed in his Report that the strikers
obstructed the free ingress to and egress from the Hotel.28

4
By Order of December 8, 1998, the NLRC thus issued a Temporary Restraining Order (TRO) directing the strikers to
immediately "cease and desist from obstructing the free ingress and egress from the Hotel premises." 29

The service upon the strikers of the TRO notwithstanding, they refused to dismantle the tent they put up at the employee’s
entrance to the Hotel, prompting the Hotel’s security guards to, on December 10, 1997, dismantle the same during which the
strikers as well as the guards were hit by rocks coming from the direction of the construction site at the nearby Land Bank
Plaza, resulting to physical injuries to some of them.30

Despite the efforts of the NCMB, which was joined by the Department of Tourism, to conciliate the parties, the same proved
futile.

On January 14, 1998, Rowena, whose services were terminated, also filed a complaint against petitioner for illegal dismissal.

For its part, petitioner filed on January 28, 1998 a petition to declare the strike illegal.

As then DOLE Secretary Cresenciano Trajano’s attempts to conciliate the parties failed, he, acting on the union’s Petition for
Assumption of Jurisdiction, issued on April 15, 1998 an order certifying the dispute to the NLRC for compulsory arbitration,
and directing the striking officers and members to return to work within 24 hours and the Hotel to accept them back under the
same terms and conditions prevailing before the strike.31

On petitioner’s motion for reconsideration, then DOLE Acting Secretary Jose Español, Jr., by Order of April 30, 1998,
modified the April 15, 1998 Order of Secretary Trajano by directing the Hotel to just reinstate the strikers to itspayroll, and
ordering that all cases between the parties arising out of the labor disputes which were pending before different Labor
Arbiters be consolidated with the case earlier certified to the NLRC for compulsory arbitration.32 It appears that the said order
of the Acting Secretary directing the reinstatement of the strikers to the Hotel’s payroll was carried out.

By Resolution of November 19, 1999, the NLRC declared that the strike was illegal and that the
union officers and members who were reinstated to the Hotel’s payroll were deemed to have lost their employment status.
And it dismissed the complaints filed by Mary Grace, Agustin, and Rowena as well as the union’s complaint for ULP.33

On appeal by the union, the Court of Appeals affirmed the NLRC Resolution dismissing the complaints of Mary Grace,
Agustin and Rowena and of the union. It modified the NLRC Resolution, however, by ordering the reinstatement with back
wages of union members. Thus it disposed:

WHEREFORE, in view of the foregoing, the petition is granted only insofar as the dismissal of the union members is
concerned. Consequently, the ruling of the public respondent NLRC to the effect that the union members lost their
employment status with the Hotel is hereby reversed and set aside. Private respondent Hotel is hereby ordered
to immediately reinstate the members with backwages from the time they were terminated. The Court finds no grave
abuse of discretion on the part of the NLRC, and therefore affirms the ruling of the NLRC as follows:

(1) that the strike is illegal;

(2) that the union officers lost their employment status when they formed the illegal strike; and

(3) That the dismissal of Ms. Mary Grace U. de Leon, Vicente C. Agustin and Rowena Junio is valid.

SO ORDERED.34 (Underscoring supplied)

In so ruling, the appellate court noted that petitioner failed to establish by convincing and substantial evidence that the
union members who participated in the illegal strike committed illegal acts, and although petitioner presented photographs of
the striking employees, the strikers who allegedly committed illegal acts were not named or identified. 35

Hence, the present appeal by petitioner faulting the appellate court:

5
IN ORDERING THE REINSTATEMENT AND THE PAYMENT OF BACKWAGES OF THE INDIVIDUAL
RESPONDENTS WHOSE EMPLOYMENT STATUS WERE PREVIOUSLY DECLARED TO HAVE BEEN LOST BY THE
NATIONAL LABOR RELATIONS COMMISSION, THE COURT OF APPEALS HAS IN EFFECT DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW WHICH HAS NOT YET BEFORE BEEN DETERMINED BY THIS HONORABLE
COURT, [AND]

II

IN [THUS] DEVIAT[ING] FROM ESTABLISHED DOCTRINES LONG SETTLED BY CONSISTENT JURISPRUDENCE


ENUNCIATED BY THIS HONORABLE COURT.36 (Underscoring supplied)

Petitioner argues that:

IT WAS THE NLRC WHICH DECLARED THAT THE UNION OFFICERS AND MEMBERS HAVE LOST THEIR
EMPLOYMENT AS A CONSEQUENCE OF THEIR STRIKE WHICH IT ALSO DECLARED AND FOUND TO BE ILLEGAL.

SUCH BEING THE CASE, IN THE EVENT THE NLRC’s DECISION IS NOT UPHELD AS FAR AS THE UNION MEMBERS’
LOSING THEIR EMPLOYMENT IS CONCERNED, PETITIONER SHOULD NOT BE HELD LIABLE TO PAY THEIR
BACKWAGES.

UNDER THE CIRCUMSTANCES, NEITHER CAN PETITIONER BE VALIDLY DIRECTED TO REINSTATE


THEM.37(Emphasis and underscoring supplied)

Respondents, upon the other hand, pray for the dismissal of the petition, they arguing that:

A. Respondent [union members] must be reinstated and paid full backwages because their strike was legal and
done in good faith.

B. Even assuming arguendo, that the strike started as an illegal strike, the union’s unconditional offer to return to
work, coupled with the hotel’s unfair labor practices during the strike, transformed the strike into a legal strike.

C. Even assuming arguendo, that the strike is illegal, the reinstatement of the strikers and the payment of full
backwages is consistent with the ruling in Telefunken Semiconductors Employees Union-FFW v. Secretary, 283
SCRA 145 which states that the individual liability of each of the union officers and members determines whether or
not strikers should be reinstated.

D. Even assuming arguendo, that the strike is illegal, Article 264 of the Labor Code directs the reinstatement of and
payment of full backwages to the respondents.38 (Underscoring supplied)

As did the NLRC and the Court of Appeals, this Court finds the strike illegal.

Article 255 of the Labor Code provides:

ART. 255. EXCLUSIVE BARGAINING REPRESENTATION AND WORKERS’ PARTICIPATION IN POLICY AND
DECISION-MAKING

The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit
shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the
Secretary of Labor and Employment may promulgate, to participate in policy and decision-making process of the
establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For
this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the

6
workers in such labor management councils shall be elected by at least the majority of all employees in said establishment.
(Emphasis and underscoring supplied)

As the immediately quoted provision declares, only the labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit is the exclusive representative of the employees in such unit for the
purpose of collective bargaining.

The union (hereafter referred to as respondent) is admittedly not the exclusive representative of the majority of the
employees of petitioner, hence, it could not demand from petitioner the right to bargain collectively in their behalf.

Respondent insists, however, that it could validly bargain in behalf of "its members," relying on Article 242 of the Labor
Code.39 Respondent’s reliance on said article, a general provision on the rights of legitimate labor organizations, is
misplaced, for not every legitimate labor organization possesses the rights mentioned therein.40Article 242 (a) must be read
in relation to above-quoted Article 255.

On respondent’s contention that it was bargaining in behalf only of its members, the appellate court, affirming the NLRC’s
observation that the same would only "fragment the employees" of petitioner,41 held that "what [respondent] will be achieving
is to divide the employees, more particularly, the rank-and-file employees of [petitioner] . . . the other workers who are not
members are at a serious disadvantage, because if the same shall be allowed, employees who are non-union members will
be economically impaired and will not be able to negotiate their terms and conditions of work, thus defeating the very
essence and reason of collective bargaining, which is an effective safeguard against the evil schemes of employers in terms
and conditions of work."42 This Court finds the observation well-taken.

It bears noting that the goal of the DOLE is geered towards "a single employer wide unit which is more to the broader and
greater benefit of the employees working force."43 The philosophy is to avoid fragmentation of the bargaining unit so as to
strengthen the employees’ bargaining power with the management. To veer away from such goal would be contrary, inimical
and repugnant to the objectives of a strong and dynamic unionism.44

Petitioner’s refusal to bargain then with respondent can not be considered a ULP to justify the staging of the strike.

The second ground alleged by respondent to justify the staging of the strike – that petitioner prevented or intimidated some
workers from joining the union before, during or after the strike – was correctly discredited by the appellate court in this wise:

. . . a careful study of the allegations of petitioners in their petition reveals that it contained general allegations that the
Management of the Hotel committed unfair labor practices by refusing to bargain with the union and by alleged acts of union
interference, coercion and discrimination tantamount to union-busting. Since it is the union who alleges that unfair labor
practices were committed by the Hotel, the burden of proof is on the union to prove its allegations by substantial evidence.

Moreover, while petitioner Union continues to accuse the private respondent Hotel of violating their constitutional right to
organize by busting the Union, this Court cannot overlook the events that transpired prior to the strike that the Union staged
on November 29, 1997. It is beyond argument that a conciliatory meeting was still scheduled to be held on December 1,
1997 before the NCMB. In this conciliatory meeting, petitioner Union could have substantiated and presented additional
evidences. Thus, as held by the Supreme Court in the case of Tiu vs. National Labor Relations Commission:

"The Court is not unmindful of this rule, but in the case at bar the facts and the evidence did not establish events [sic] least a
rational basis why the union would [wield] a strike based on alleged unfair labor practices it did not even bother to
substantiate during the conciliation proceedings. It is not enough that the union believed that the employer committed acts of
unfair labor practice when the circumstances clearly negate even a prima facie [showing to] warrant [such a] belief."

It is also evident from the records of the instant petition, specifically from the Notice of Strike, that their principal ground for
the strike was the "refusal of the Hotel Management to bargain collectively with the Union for the benefit of the latter’s
members." In the instant case, it is not disputed that the petitioner UNION is not a certified bargaining unit to negotiate a
collective bargaining agreement (CBA) with private respondent Hotel . . . 45 (Underscoring supplied)

On top of the foregoing observations, this Court notes that respondent violated Article 264 which proscribes the staging of a
strike on the ground of ULP during the pendency of cases involving the same grounds for the strike.

7
Further, the photographs taken during the strike, as well as the Ocular Inspection Report of the NLRC representative, show
that the strikers, with the use of ropes and footed placards, blockaded the driveway to the Hotel’s points of entrance and
exit,46 making it burdensome for guests and prospective guests to enter the Hotel, thus violating Article 264 (e) of the Labor
Code which provides:

ART. 264 (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free
ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (Emphasis supplied)

Furthermore, the photographs indicate that indeed the strikers held noise barrage47 and threatened guests with bodily
harm.48

Finally, the police reports mention about the strikers’ exploding of firecrackers, causing the guests to panic and transfer to
other areas of the Hotel.49

It is doctrinal that the exercise of the right of private sector employees to strike is not absolute. Thus Section 3 of Article XIII
of the Constitution, provides:

SECTION 3. x x x

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations and peaceful concerted
activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law. (Emphasis and underscoring supplied)

Even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the
employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the rights
to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable
enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance. 50

As the appellate court correctly held, the union officers should be dismissed for staging and participating in the illegal strike,
following paragraph 3, Article 264(a) of the Labor Code which provides that ". . .[a]ny union officer who knowingly participates
in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during
strike may be declared to have lost his employment status . . ."

An ordinary striking worker cannot, thus be dismissed for mere participation in an illegal strike. There must be proof that he
committed illegal acts during a strike, unlike a union officer who may be dismissed by mere knowingly participating in an
illegal strike and/or committing an illegal act during a strike.51

The appellate court found no convincing and substantial proof, however, that the strikers-members of respondent who
participated in the illegal strike committed illegal acts.

In the present case, private respondent Hotel failed to established [sic] by convincing and substantial evidence that these
union members who participated in the illegal strike committed illegal acts. Consequently, they cannot be terminated from
service for their participation in an illegal strike. Moreover, private respondent Hotel presented as evidence photographs of
the striking employees, the question that comes to our mind is: why were these strikers who allegedly participated in illegal
acts not identified or named? Instead the arbitral tribunal found it worthy of credence to summarily dismiss all the union
members without them being named or identified . . . 52

This Court finds otherwise. As reflected above, the photographs show that some of the workers-strikers who joined the strike
indeed committed illegal acts – blocking the free ingress to and egress from the Hotel, holding noise barrage, threatening
guests, and the like. The strikers were, in a list53 attached to petitioner’s Position Paper54 filed with the NLRC, named.

The list failed to specifically identify the ones who actually committed illegal acts, however. Such being the case, a remand of
the case to the Labor Arbiter, through the NLRC, is in order for the purpose only of determining the respective liabilities of the
strikers listed by petitioner. Those proven to have committed illegal acts during the course of the strike are deemed to have

8
lost their employment, unless they have been readmitted by the Hotel, whereas those not clearly shown to have committed
illegal acts should be reinstated.

Whether those ordered reinstated are entitled to backwages is, however, another matter.

For the general rule is that backwages shall not be awarded in an economic strike on the principle that "a fair day’s wage"
accrues only for a "fair day’s labor."55 Even in cases of ULP strikes, award of backwages rests on the court’s discretion and
only in exceptional instances.56

Thus, J.P. Heilbronn Co. v. National Labor Union,57 instructs:

When in case of strikes, and according to the C[ourt of] I[ndustrial] R[elations] even if the strike is legal, strikers may not
collect their wages during the days they did not go to work, for the same reasons if not more, laborers who voluntarily absent
themselves from work to attend the hearing of a case in which they seek to prove and establish their demands against the
company, the legality and propriety of which demands is not yet known, should lose their pay during the period of such
absence from work. The age-old rule governing the relation between labor and capital or management and employee is that
of a "fair day’s wage for a fair day’s labor." If there is no work performed by the employee there can be no wage or pay,
unless of course, the laborer was able, willing and ready to work but was illegally locked out, dismissed or suspended. It is
hardly fair or just for an employee or laborer to fight or litigate against his employer on the employer’s time. (Emphasis and
underscoring supplied)

This Court must thus hearken to its policy that "when employees voluntarily go on strike, even if in protest against unfair
labor practices," no backwages during the strike is awarded.

In Cromwell Commercial Employees and Laborers Union (PTUC) v. Court of Industrial Relations,58 this Court made a
distinction between two types of employees involved in a ULP: those who are discriminatorily dismissed for union activities,
and those who voluntarily go on strike even if it is in protest of an ULP. Discriminatorily dismissed employees were ordered
entitled to backpay from the date of the act of discrimination, that is, from the day of their discharge, whereas employees who
struck as a voluntary act of protest against what they considered a ULP of their employer were held generally not entitled to
backpay.59

Jurisprudential law, however, recognizes several exceptions to the "no backwages rule," to wit: when the employees were
illegally locked to thus compel them to stage a strike; 60 when the employer is guilty of the grossest form of ULP;61 when the
employer committed discrimination in the rehiring of strikers refusing to readmit those against whom there were pending
criminal cases while admitting nonstrikers who were also criminally charged in court; 62 or when the workers who staged a
voluntary ULP strike offered to return to work unconditionally but the employer refused to reinstate them. 63 Not any of these
or analogous instances is, however, present in the instant case.

Respondent urges this Court to apply the exceptional rule enunciated in Philippine Marine Officers’ Guild v. Compañia
Maritima64 and similar cases where the employees unconditionally offered to return to work, it arguing that there was such an
offer on its part to return to work but the Hotel screened the returning strikers and refused to readmit those whom it found to
have perpetrated prohibited acts during the strike.

It must be stressed, however, that for the exception in Philippine Marine Officers’ Guild to apply, it is required that the strike
must be legal.65

Reinstatement without backwages of striking members of respondent who did not commit illegal acts would thus suffice
under the circumstances of the case. If reinstatement is no longer possible, given the lapse of considerable time from the
occurrence of the strike, the award of separation pay of one (1) month salary for each year of service, in lieu of
reinstatement, is in order.66

WHEREFORE, the Decision dated November 21, 2002 of the Court of Appeals is, in light of the foregoing ratiocinations,
AFFIRMED with MODIFICATION in that only those members of the union who did not commit illegal acts during the course
of the illegal strike should be reinstated but without backwages. The case is, therefore, REMANDED to the Labor Arbiter,
through the NLRC, which is hereby directed to, with dispatch, identify said members and to thereafter order petitioner to

9
[G.R. No. 156292. January 11, 2005]

ME-SHURN CORPORATION AND SAMMY CHOU, petitioners, vs. ME-SHURN WORKERS UNION-FSM
AND ROSALINA CRUZ, respondents.
To justify the closure of a business and the termination of the services of the concerned employees, the law
requires the employer to prove that it suffered substantial actual losses. The cessation of a companys operations
shortly after the organization of a labor union, as well as the resumption of business barely a month after, gives
credence to the employees claim that the closure was meant to discourage union membership and to interfere in union
activities. These acts constitute unfair labor practices.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to annul the November 29, 2002
Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 69675, the decretal portion of which reads:

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment must be, as it hereby is, AFFIRMED, and the present
petition DISMISSED for lack of merit. Costs shall be taxed against petitioners.[3]

The affirmed November 29, 2001 Decision [4] of the National Labor Relations Commission (NLRC), Third Division,
disposed as follows:

WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent Me-Shurn Corp. is hereby ordered to pay the
complainants who appeared in the proceedings conducted by the Labor Arbiter their full backwages from the date their wages
were withheld from them to the date of the finality of this decision. [5]

The Facts

On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized Me-Shurn Workers
Union-FSM, an affiliate of the February Six Movement (FSM). [6]Respondent union had a pending application for
registration with the Bureau of Labor Relations (BLR) through a letter dated June 11, 1998. [7]
Ten days later, or on June 17, 1998, petitioner corporation started placing on forced leave all the rank and file
employees who were members of the unions bargaining unit.[8]
On June 23, 1998, respondent union filed a Petition for Certification Election with the Med-Arbitration Unit of the
Department of Labor and Employment (DOLE), Regional Office No. 3. [9]
Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a comment stating that it would
temporarily lay off employees and cease operations, on account of its alleged inability to meet the export quota
required by the Board of Investment.[10]
While the Petition was pending, 184 union members allegedly submitted a retraction/withdrawal thereof on July
14, 1998. As a consequence, the med-arbiter dismissed the Petition. On May 7, 1999, Department of Labor and
Employment (DOLE) Undersecretary Rosalinda Dimapilis-Baldoz granted the unions appeal and ordered the holding
of a certification election among the rank and file employees of the corporation.[11]
Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitioner corporation on the
ground of unfair labor practice (illegal lockout and union busting). This matter was docketed as Case No. NCMB-RO3-
BEZ-NZ-08-42-98.[12]

10
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein) and Raquel Lamayra (the
Filipino administrative manager of the corporation) imposed a precondition for the resumption of operation and the
rehiring of laid off workers. He allegedly required the remaining union officers to sign an Agreement containing a
guarantee that upon their return to work, no union or labor organization would be organized. Instead, the union officers
were to serve as mediators between labor and management.[13] After the signing of the Agreement, the operations of
the corporation resumed in September 1998.[14]
On November 5, 1998, the union reorganized and elected a new set of officers. Respondent Rosalina Cruz was
elected president.[15] Thereafter, it filed two Complaints docketed as NLRC Case Nos. RAB-III-11-9586-98 and RAB-III-
09-0322-99. These cases were consolidated and assigned to Labor Arbiter Henry Isorena for compulsory arbitration.
Respondents charged petitioner corporation with unfair labor practice, illegal dismissal, underpayment of wages and
deficiency in separation pay, for which they prayed for damages and attorneys fees.
The corporation countered that because of economic reversals, it was compelled to close and cease its
operations to prevent serious business losses; that under Article 283 of the Labor Code, it had the right to do so; that
in August 1998, it had paid its 342 laid off employees separation pay and benefits in the total amount
of P1,682,863.88; and that by virtue of these payments, the cases had already become moot and academic. It also
averred that its resumption of operations in September 1998 had been announced and posted at the Bataan Export
Processing Zone, and that some of the former employees had reapplied.
Petitioner corporation questioned the legality of the representation of respondent union. Allegedly, it was not the
latter, but the Me-Shurn Independent Employees Union -- with Christopher Malit as president -- that was recognized as
the existing exclusive bargaining agent of the rank and file employees and as the one that had concluded a Collective
Bargaining Agreement (CBA) with the corporation on May 19, 1999. [16] Hence, the corporation asserted that
Undersecretary Dimapilis-Baldozs Decision ordering the holding of a certification election had become moot and
academic.
On the other hand, respondents contested the legality of the formation of the Me-Shurn Independent Employees
Union and petitioners recognition of it as the exclusive bargaining agent of the employees. Respondents argued that
the pendency of the representation issue before the DOLE had barred the alleged recognition of the aforementioned
union.
Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual and expected losses
justified the closure of petitioner corporation and its dismissal of its employees; (2) the voluntary acceptance of
separation pay by the workers precluded them from questioning the validity of their dismissal; and (3) the claim for
separation pay lacked factual basis.[17]
On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners guilty of unfair labor
practice, the Commission ruled that the closure of the corporation shortly after respondent union had been organized,
as well as the dismissal of the employees, had been effected under false pretenses. The true reason therefor was
allegedly to bar the formation of the union. Accordingly, the NLRC held that the illegally dismissed employees were
entitled to back wages.[18]
After the denial of their Motion for Reconsideration,[19] petitioners elevated the cases to the CA via a Petition for
Certiorari under Rule 65.[20] They maintained that the NLRC had committed grave abuse of discretion and serious
errors of fact and law in reversing the Decision of the labor arbiter and in finding that the corporations cessation of
operations in August 1998 had been tainted with unfair labor practice.
Petitioners added that respondent unions personality to represent the affected employees had already been
repudiated by the workers themselves in the certification election conducted by the DOLE. Pursuant to the Decision of
Undersecretary Dimapilis-Baldoz in Case No. RO3 00 9806 RU 001, a certification election was held on September 7,
2000, at the premises of petitioner corporation under the supervision of the DOLE. The election had the following
results:

Me Shurn Workers Union-FSM 1

No Union 135

Spoiled 2
11
Challenged 52

Total Votes Cast 190[21]

Ruling of the Court of Appeals

The CA dismissed the Petition because of the failure of petitioners to submit sufficient proof of business losses. It
found that they had wanted merely to abort or frustrate the formation of respondent union. The burden of proving that
the dismissal of the employees was for a valid or authorized cause rested on the employer.
The appellate court further affirmed the unions legal personality to represent the employees. It held that (1)
registration was not a prerequisite to the right of a labor organization to litigate; and (2) the cases may be treated as
representative suits, with respondent union acting for the benefit of all its members.
Hence, this Petition.[22]

Issues

In their Supplemental Memorandum, petitioners submit the following issues for our consideration:
(1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an authorized cause,
and
(2) Whether respondents can maintain a suit against petitioners.[23]

The Courts Ruling

The Petition lacks merit.


First Issue:
Validity of the Dismissal

The reason invoked by petitioners to justify the cessation of corporate operations was alleged business losses.
Yet, other than generally referring to the financial crisis in 1998 and to their supposed difficulty in obtaining an export
quota, interestingly, they never presented any report on the financial operations of the corporation during the period
before its shutdown. Neither did they submit any credible evidence to substantiate their allegation of business losses.
Basic is the rule in termination cases that the employer bears the burden of showing that the dismissal was for a
just or authorized cause. Otherwise, the dismissal is deemed unjustified. Apropos this responsibility, petitioner
corporation should have presented clear and convincing evidence [24] of imminent economic or business reversals as a
form of affirmative defense in the proceedings before the labor arbiter or, under justifiable circumstances, even on
appeal with the NLRC.
However, as previously stated, in all the proceedings before the two quasi-judicial bodies and even before the CA,
no evidence was submitted to show the corporations alleged business losses. It is only now that petitioners have
belatedly submitted the corporations income tax returns from 1996 to 1999 as proof of alleged continued losses during
those years.
Again, elementary is the principle barring a party from introducing fresh defenses and facts at the appellate
stage.[25] This Court has ruled that matters regarding the financial condition of a company -- those that justify the
closing of its business and show the losses in its operations -- are questions of fact that must be proven

12
below.[26] Petitioners must bear the consequence of their neglect. Indeed, their unexplained failure to present
convincing evidence of losses at the early stages of the case clearly belies the credibility of their present claim. [27]
Obviously, on the basis of the evidence -- or the lack thereof -- the appellate court cannot be faulted for ruling that
the NLRC did not gravely abuse its discretion in finding that the closure of petitioner corporation was not due to alleged
financial losses.
At any rate, even if we admit these additional pieces of evidence, the circumstances surrounding the cessation of
operations of the corporation reveal the doubtful character of its supposed financial reason.
First, the claim of petitioners that they were compelled to close down the company to prevent further losses is
belied by their resumption of operations barely a month after the corporation supposedly folded up.
Moreover, petitioners attribute their loss mainly to their failure to obtain an export quota from the Garments and
Textile Export Board (GTEB). Yet, as pointed out by respondents, the corporation resumed its business without first
obtaining an export quota from the GTEB. Besides, these export quotas pertain only to business with companies in the
United States and do not preclude the corporation from exporting its products to other countries. In other words, the
business that petitioner corporation engaged in did not depend entirely on exports to the United States.
If it were true that these export quotas constituted the determining and immediate cause of the closure of the
corporation, then why did it reopen for business barely a month after the alleged cessation of its operations?
Second, the Statements of Income and Deficit for the years 1996 and 1997 show that at the beginning of 1996,
the corporation had a deficit of P2,474,505. Yet, the closure was effected only after more than a year from such year-
end deficit; that is, in the middle of 1998, shortly after the formation of the union.
On the other hand, the Statement of Income and Deficit for the year 1998 does not reflect the extent of the losses
that petitioner corporation allegedly suffered in the months prior to its closure in July/August 1998. This document is
not an adequate and competent proof of the alleged losses, considering that it resumed operations in the succeeding
month of September.
Upon careful study of the evidence, it is clear that the corporation was more profitable in 1997 than in 1996. By
the end of 1997, it had a net income of P1,816,397.
If petitioners were seriously desirous of averting losses, why did the corporation not close in 1996 or earlier, when
it began incurring deficits? They have not satisfactorily explained why the workers dismissal was effected only after the
formation of respondent union in September 1998.
We also take note of the allegation that after several years of attempting to organize a union, the employees
finally succeeded on June 7, 1998. Ten days later, without any valid notice, all of them were placed on forced leave,
allegedly because of lack of quota.
All these considerations give credence to their claim that the closure of the corporation was a mere subterfuge, a
systematic approach intended to dampen the enthusiasm of the union members. [28]
Third, as a condition for the rehiring of the employees, the union officers were made to sign an agreement that
they would not form any union upon their return to work. This move was contrary to law.
Fourth, notwithstanding the Petition for Certification Election filed by respondents and despite knowledge of the
pendency thereof, petitioners recognized a newly formed union and hastily signed with it an alleged Collective
Bargaining Agreement. Their preference for the new union was at the expense of respondent union. Moncada Bijon
Factory v. CIR[29] held that an employer could be held guilty of discrimination, even if the preferred union was not
company-dominated.
Fifth, petitioners were not able to prove their allegation that some of the employees contracts had expired even
before the cessation of operations. We find this claim inconsistent with their position that all 342 employees of the
corporation were paid their separation pay plus accrued benefits in August 1998.
Sixth, proper written notices of the closure were not sent to the DOLE and the employees at least one month
before the effectivity date of the termination, as required under the Labor Code. Notice to the DOLE is mandatory to
enable the proper authorities to ascertain whether the closure and/or dismissals were being done in good faith and not
just as a pretext for evading compliance with the employers just obligations to the affected employees. [30] This

13
requirement is intended to protect the workers right to security of tenure. The absence of such requirement taints the
dismissal.
All these factors strongly give credence to the contention of respondents that the real reason behind the shutdown
of the corporation was the formation of their union. Note that, to constitute an unfair labor practice, the dismissal need
not entirely and exclusively be motivated by the unions activities or affiliations. It is enough that the discrimination was
a contributing factor.[31] If the basic inspiration for the act of the employer is derived from the affiliation or activities of
the union, the formers assignment of another reason, no matter how seemingly valid, is unavailing. [32]
Concededly, the determination to cease operations is a management prerogative that the State does not usually
interfere in. Indeed, no business can be required to continue operating at a loss, simply to maintain the workers in
employment. That would be a taking of property without due process of law. But where it is manifest that the closure is
motivated not by a desire to avoid further losses, but to discourage the workers from organizing themselves into a
union for more effective negotiations with management, the State is bound to intervene. [33]

Second Issue:
Legal Personality of Respondent Union

Neither are we prepared to believe petitioners argument that respondent union was not legitimate. It should be
pointed out that on June 29, 1998, it filed a Petition for Certification Election. While this Petition was initially dismissed
by the med-arbiter on the basis of a supposed retraction, note that the appeal was granted and that Undersecretary
Dimapilis-Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate labor organization within the
meaning of the Labor Code. Under this Code, in an unorganized establishment, only a legitimate union may file a
petition for certification election.[34] Hence, while it is not clear from the record whether respondent union is a legitimate
organization, we are not readily inclined to believe otherwise, especially in the light of the pro-labor policies enshrined
in the Constitution and the Labor Code.[35]
Verily, the union has the requisite personality to sue in its own name in order to challenge the unfair labor practice
committed by petitioners against it and its members. [36] It would be an unwarranted impairment of the right to self-
organization through formation of labor associations if thereafter such collective entities would be barred from
instituting action in their representative capacity. [37]
Finally, in view of the discriminatory acts committed by petitioners against respondent union prior to the holding of
the certification election on September 27, 2000 -- acts that included their immediate grant of exclusive recognition to
another union as a bargaining agent despite the pending Petition for certification election -- the results of that election
cannot be said to constitute a repudiation by the affected employees of the unions right to represent them in the
present case.
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against the petitioners.SO
ORDERED.

G.R. No. 82260 July 19, 1989

ASSOCIATED LABOR UNIONS (ALU), petitioner,


vs.
HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR
AND EMPLOYMENT AND NATIONAL FEDERATION OF LABOR (NFL), respondents.

This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of the Decision 1 of the
Director of Bureau of Labor Relations ordering the holding of a certification election among the workers of
Soriano Fruits Corporation.

The antecedent facts of the case are as follows:

14
Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement with the employer
Soriano Fruits Corporation which expired on September 30,1987. Prior to the said date, or on June 22, 1987,
petitioner and the employer signed a collective bargaining agreement which was to take effect on September 1,
1987 and was to remain so until August 31, 1990. The said collective bargaining agreement was unanimously
approved and ratified by the members of the bargaining unit.

However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a petition for
certification election questioning the majority status of the incumbent union, pursuant to Executive Order 111 and
its Implementing Rules, there being more than majority of its members who have expressed doubts on the
sincerity of the incumbent union. 2 Acting on the said petition the Med-Arbiter scheduled a hearing on August 21,
1987 to determine the majority status of herein petitioner but the NFL representative failed to appear despite due
notice. Consequently, the hearing was reset to September 8, 1987 to give NFL an opportunity to substantiate its
claim but again, the NFL was not represented. Thereafter, the parties were asked to submit their position papers.
To bolster its claim, ALU submitted several petitions signed by members of the bargaining unit to dismiss any
petition filed by any union which seeks to question the majority status of the incumbent union. The signatories to
the petition also reaffirmed its loyalty to ALU.

On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for certification election on
the ground of failure to prosecute. An appeal to the Bureau of Labor Relations however, proved fruitful. On
December 22, 1987 the respondent Director of the Bureau of Labor Relations held that the Med-Arbiter erred in
dismissing the petition for certification election. The dispositive portion of the decision reads thus:

WHEREFORE in view of the foregoing, the appeal of petitioner, National Federation of Labor is
hereby given due course and the Order of the Med-Arbiter is set aside. Let, therefore a
certification election proceed at Soriano Fruits Corporation, after a pre-election conference to
thresh out the list of eligible voters, with the following choices:

1. National Federation of Labor (NFL);

2. Associated Labor Unions (ALU).

SO ORDERED. 4

ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant petition for certiorari.

Petitioner alleges that in granting the petition for certification election, the respondent Director acted with grave
abuse of discretion amounting to lack or in excess of jurisdiction in that:

I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE 257 AS


AMENDED BY EXECUTIVE ORDER 111.

II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION IS SUPPORTED
BY MORE THAN TWENTY (20%) OF THE RANK AND FILE.

III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING AGREEMENT


RENDERS THE CERTIFICATION ELECTION MOOT AND ACADEMIC.

This Court finds the petition bereft of merit.

Petitioner hinges its claim on Art. 257 of the Labor Code which provides:

15
Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified
bargaining agent, the petition for certification election filed by a legitimate labor organization shall
be supported by the written consent of at least twenty (20%) percent of all the employees in the
bargaining unit. Upon receipt and verification of such petition, the Med-Arbiter shall automatically
order the conduct of a certification election.

But this provision finds no application in the case at bar primarily because it applies to unorganized
establishments. For the said provision to apply, the establishment concerned must have no certified bargaining
agent. This is not the case in the present petition where there was a collective bargaining agreement entered into
by the management of the Soriano Fruits Corporation and ALU, the petitioner, which was then the bargaining
agent. This Court however, finds that it is Article 256 as amended by Executive Order 111 which must be
considered in the resolution of the present petition. The said article states:

Article 256. Representation Issues in Organized Establishments. In organized establishments,


when a petition questioning the majority status of the incumbent bargaining agent is filed before
the Ministry within the sixty (60) day period before the expiration of the collective bargaining
agreement, the Med- Arbiter shall automatically order an election by secret ballot to ascertain the
will of the employees in the appropriate bargaining unit. (Emphasis supplied)

A review of the records of this case would confirm the fact that the petition for certification election filed by NFL
on August 10, 1987 was well within the prescribed sixty (60) day freedom period.

Petitioner however maintains that the respondent Director misconstrued the legal intent behind the above- cited
provision and that it should not have been given a literal interpretation. Petitioner insists further that the light of
the members of the bargaining unit to choose which union should represent them is not an absolute one since a
prior hearing must be had to ascertain the veracity of the allegations contained in the petition.

This argument is untenable.

The provision of Article 256 which provides that the Med-Arbiter shall automatically order an election is clear and
leaves no room for further interpretation. The mere filing of a petition for certification election within the freedom
period is sufficient basis for the respondent Director to order the holding of a certification election. The fact that
NFL did not appear during the hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly
pointed out, there is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands of the
unions. Neither does the law require the same to be held whereby the absence or presence therefrom of any
union representative would affect the petition for certification election. In fact, it is the denial of the petition for
certification election grounded solely on the absence of NFL in the scheduled hearings which is frowned upon by
the law. This is consistent with the principle in labor legislation that "certification proceedings is not a litigation in
the sense in which the term is ordinarily understood, but an investigation of non-adversary and fact finding
character. As such, it is not bound by technical rules of evidence." 5

Petitioner suggests that to grant the petition for certification election would "open the floodgates to unbridled and
scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and stability existing in the
Company." 6 This Court believes however that the workers' choice regarding their representative who inevitably
reflects and works for their common interest is of paramount importance. This policy was lengthily explained in
the concurring opinion of then Chief Justice Fernando in the case of Confederation of Citizens Labor Unions
(CCLU) vs. National Labor Relations Commission 7 where he categorically stated that "the slightest doubt
therefore cannot be entertained that what possesses significance in a petition for certification is that through such
a device the employees are given the opportunity to make known who shall have the right to represent them.
What is equally important is that not only some but all of them should have the right to do so." 8

16
Petitioner next contends that the respondent Director erred in relying upon the claim of the respondent Union that
the petition for certification election is supported by more than twenty percent (20%) of the rank and file
considering that the said petition merely contained the lone signature of the NFL representative.

This averment is likewise unmeritorious.

Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%) requirement. But it
must be reiterated that the said requirement applies only to unorganized establishments. It is Article 256 instead
which must be applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere
in the said provision does it require the written consent of twenty percent (20%) of the employees in the
bargaining unit. Hence, the issue of whether or not the petition for certification election is supported by twenty
percent (20%) of the bargaining unit concerned is immaterial to the case at bar. What is essential is that the
petition was filed during the sixty-day freedom period.

The petition to dismiss the petition for certification elections 9 filed by NFL and signed by some 224 employees
signifying their satisfaction with the services of the incumbent union should not be given any weight at all. The
possibility that the workers were merely coerced to sign the petition such that they did so for fear of reprisal from
the members of ALU is not remote. However, this does not discount the possibility that the workers voluntarily
signed the said petition. Whatever reason the workers may have had for signing the same may be ascertained
once a certification election is held. It is in this democratic process that the workers are given the opportunity to
freely choose, by secret ballot, who they want to represent them. In this manner, the workers are free of any
undue pressure which either competing union may exert upon them.

Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the
collective bargaining agreement renders the certification election moot and academic." 10

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification
elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely
entered into apparently in an attempt to avoid the holding of a certification election. The records show that the old
collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31,
1987. However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the petitioner
renewed the same with the consent and collaboration of management. The renewed agreement was then ratified
by the members of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification.
In the meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining agreement
on August 31, 1987) a petition for certification election was filed by respondent union, NFL. From the foregoing
facts, it is quite obvious that the renewed agreement cannot constitute a bar to the instant petition for certification
election for the very reason that the same was not yet in existence when the petition for certification election was
filed on August 10, 1987 inasmuch as the same was to take effect only on September 1, 1987, after the old
agreement expires on August 31, 1987.

In the case of Associated Trade Unions-ATU vs. Noriel, 11 this Court held that "it is indubitably clear from the facts
heretofore unfolded that management and petitioner herein proceeded with such indecent haste in renewing their
CBA way ahead of the sixty-day freedom period in their obvious desire to frustrate the will of the rank and file
employees in selecting their bargaining representative. To countenance the actuation of the company and the
petitioner herein would be violative of the employees constitutional right to self-organization. 12

The Solicitor General, in his comment, brought the attention of this Court to the fact that petitioner had violated
the provisions of Article 25413 when it renewed the collective bargaining agreement before the commencement of
the sixty-day freedom period. This Court does not subscribe to this view. What the aforecited rule prohibits is
the modification and alteration of the present collective bargaining agreement during its lifetime. In the present
case, the alterations and modifications were to take effect only on September 1, 1987, i.e., after the expiration of
17
the old agreement. It must be noted that the new agreement did not suspend the old one. Neither did it terminate
nor modify the same. Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary
to the allegations of the Solicitor General.

However, it is apparent that certiorari does not lie in the instant petition for this Court does not see any
substantial reason to withhold the primordial right of workers to select their bargaining representative.

WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The temporary
restraining order issued by resolution of this Court of July 11, 1988 is hereby lifted and declared to be of no force
and effect. The decision is immediately executory. No costs.

SO ORDERED.

18
G.R. No. 106830 November 16, 1993

R. TRANSPORT CORPORATION, petitioner,


vs.
HON. BIENVIENIDO E. LAGUESMA. in his capacity as Undersecretary of the Department of Labor and
Employment, CHRISTIAN LABOR ORGANIZATION OF THE PHILIPPINES (CLOP), NATIONAL FEDERATION
OF LABOR UNIONS (NAFLU), and ASSOCIATED LABOR UNIONS (ALU-TUCP), respondents.

This is a petition for certiorari under Rule 65 of the Rules of Court which seeks to set aside the Resolutions of the
Undersecretary of the Department of Labor and Employment (DOLE) dated July 22, 1992, affirming the order of
the Med-Arbiter calling for the conduct of the certification election, and August 25, 1992, denying petitioner's
motion for reconsideration.

On January 4, 1991, respondent Christian Labor Organization of the Philippines (CLOP), filed with the Med-
Arbitration Unit of the DOLE a petition for certification election among the rank and file employees of the
petitioner (NCR-OD-M-91-01-002).

On April 8, 1991, Med-Arbiter A. Dizon dismissed the petition on the ground that the bargaining unit sought to be
represented by respondent did not include all the eligible employees of petitioner but only the drivers, conductors
and conductresses to the exclusion of the inspectors, inspectresses, dispatchers, mechanics and washerboys.

On May 10, 1991, respondent. CLOP rectified its mistake and filed a second petition for certification
election,which included all the rank and file employees of the company, who hold non-managerial. and non-
supervisorial positions.

Petitioner filed a motion to dismiss the second petition and contended that the dismissal of the first petition
constituted res judicata. Petitioner argued that respondent CLOP should have interposed an appeal to the
dismissal of the first petition and its failure to do so barred it from filing another petition for certification election.

On July 3, 1991, Med-Arbiter R. Parungo rendered a decision, which ordered that a certification election among
the regular rank and file workers of petitioner company be conducted (Rollo, pp. 87-91).

On October 16, 1991, the Associated Labor Unions (ALU-TUCP) filed a motion for intervention (NCR OD-M-91-
01-002) and alleged that it has members in the proposed bargaining unit. Subsequently, the National Federation
of Labor Unions (NAFLU) filed a separate petition for certification election (NCR-OD-M-91-10-058) and a motion
to consolidate related cases to avoid confusion.

Dissatisfied with the Decision dated July 3, 1991 rendered by Med-Arbiter R. Parungo, petitioner appealed to the
DOLE Secretary, who, through Undersecretary Bienvenido E. Laguesma, affirmed the Med-Arbiter in its
Resolution dated July 22, 1992 calling for the conduct of the certification election (Rollo, pp. 25-28). The
Resolution, in pertinent part, reads as follows:

The defense of res judicata is not obtaining in the present petition for certification election. It is
settled that for res judicata to apply there must be a final judgment on the merits on matters put in
issue. In the instant case, it could not be said that there is a final judgment on the merits of the
petition simply because the composition of the present proposed bargaining unit is different from
that in the first petition. Moreover, there are now other parties involved, and therefore, it would not
be correct to say that the parties in the said two cases are identical.

With regard however, to the question on propriety of consolidation, there is merit in the argument
of respondent-appellant on the need to consolidate the separate petitions for certification election
because they involve the same bargaining unit. Case No. NCR-OD-M-91-10-058 should be
19
consolidated with that of Case No. NCR- OD-M-91-05-062, where the petition of NAFLU should
be treated as an intervention and resolved by the Med-Arbiter together with the intervention of
ALU-TUCP.

PREMISES CONSIDERED, the Order of the Med-Arbiter calling for the conduct of the
certification election is hereby affirmed subject to the resolution of the Med-Arbiter of the motions
for intervention aforementioned (Rollo, pp. 27-28; emphasis supplied).

On July 31, 1992, petitioner filed a Motion for Reconsideration, again stressing the principle of res judicata.
Petitioner further argued that the second petition for a certification election by respondent CLOP, NAFLU and
ALU-TUCP were barred at least for a period of one year from the time the first petition of CLOP was dismissed
pursuant to Section Rule V, Book V of the Omnibus Rules Implementing the Labor Code as amended.

On August 25, 1991, Undersecretary Laguesma denied the motion for reconsideration (Rollo, pp. 32-34).

On September 3, 1992, petitioner filed a Motion to Suspend Proceedings based on Prejudicial Questions as an
Addendum to the Motion for Reconsideration filed on July 31, 1992. Petitioner argued that the present case must
be indefinitely suspended until the following cases are resolved by the NLRC and the Supreme Court: a) NLRC-
NCR Case No. 00-08-04708-91 entitled "R". Transport Corporation v. Jose S. Torregaza, et. al., wherein Labor
Arbiter de Castro declared the strike staged by respondent CLOP illegal and ordered the strikers to pay petitioner
the amount of P10,000.00 as exemplary damages; b) NLRC-NCR Case No. 06-03415092 filed by respondent
CLOP and its members for illegal dismissal; and NLRC-NCR Case No. 00-08-04389-92 filed by respondent
CLOP in behalf of its affected members for illegal dismissal (Rollo, pp. 139-145).

On September 29, 1992, Undersecretary Laguesma in a resolution denied the motion to suspend the conduct of
the certification election. The pertinent portion of said resolution reads as follows:

The pendency of NLRC-NCR Cases Nos. 00-08- 04708-91, 06-03415092 and 00-08-04389-92
before the NLRC is not a valid ground for the suspension of the already stalled petition for
certification election which must be resolved with dispatch.

This must be so, because the employees subject of the pending cases before the NLRC legally
remain as employees of respondent until the motion to declare them as having lost their
employment status by reason of the illegal strike or their complaint for illegal dismissal is finally
resolved. (Rollo, pp. 181-182; emphasis supplied)

On October 14, 1992, petitioner filed a motion for reconsideration of the Resolution dated September 29, 1992
which was subsequently denied by Undersecretary Laguesma on October 29, 1992 (Rollo, pp. 29-31).

Petitioner filed a Comment and Objection to the Order dated October 29, 1992 with Urgent Motion to Dismiss the
Petition for Certification Election. Without waiting for the resolution of the motion to dismiss, petitioner resorted to
this Court by way of the instant special civil action.

This petition is without merit.

Before the principle of res judicata can be operative, the following requisites must be present: a) the former
judgment or order must be final; b) it must be a judgment ororder on the merits; c) it must have been rendered by
a court having jurisdiction over the subject-matter and the parties; and d) there must be, between the first and
second actions, identity of parties (Nabus v. Court of Appeals, 193 SCRA 732 [1991]).

In the case at bench, it cannot be said that the parties in the first and second actions were identical. The first
action was dismissed by the Med-Arbiter because it excluded parties essential to the bargaining unit such as
20
inspectors, inspectresses, dispatchers and washer boys. The second petition included all the employees who
were excluded in the first petition. Therefore, the Med-Arbiter was correct when he gave due course to the
second petition for certification election after respondent CLOP corrected its mistake.

Likewise untenable is petitioner's contention that the second petition for certification election should have been
filed after one year from the dismissal of the first petition certification election under Section 3, Rule V, Book V of
the Omnibus Rules Implementing the Labor Code as amended. Said section provides as follows:

When to file — In the absence of collective bargaining agreement duly registered in accordance
with Article 231 of the Code, a petition for certification election may be filed any time.
However, no certification election may be held within one year from the date of the issuance of a
final certification election result (Emphasis supplied).

Apparently, petitioner misread the above-mentioned provision of law. The phrase "final certification election
result" means that there was an actual conduct of election i.e. ballots were cast and there was a counting of
votes. In this case, there was no certification election conducted precisely because the first petition was
dismissed, on the ground of a defective petition which did not include all the employees who should be properly
included in the collective bargaining unit.

Devoid of merit is petitioner's contention that the employment status of the members of respondent CLOP who
joined the strike must first be resolved before a certification election can be conducted.

As held in the case of Philippine Fruits and Vegetables Industries, Inc. v. Torres, 211 SCRA 95 (1992):

At any rate, it is now well-settled that employees who have been improperly laid-off but who have
a present, unabandoned right to or expectation of re-employment, are eligible to vote in
certification elections (Rothenberg on Labor Relations, p. 548). Thus, and to repeat, if the
dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or
unfair labor practices was filed, the employees concerned could still qualify to vote in the
elections.

Therefore, the employees of petitioner who participated in the strike, legally remain as such, until either the
motion to declare their employment status legally terminated or their complaint for illegal dismissal is resolved by
the NLRC.

It should be noted that it is the petitioner, the employer, which has offered the most tenacious resistance to the
holding of a certification election. This must not be so for the choice of a collective bargaining agent is the sole
concern of the employees. The employer has no right to interfere in the election and is merely regarded as a
bystander (Divine Word University of Tacloban v. Secretary of Labor and Employment, 213 SCRA 759 [1992]).

Finally, petitioner's Comment and Objection to the Order dated October 29, 1992 with Urgent Motion to Dismiss
the Petition for Certification Election is still pending with the Undersecretary of Labor. The resort to judicial action
by petitioner is premature. Hence, it is also guilty of forum-shopping in pursuing the same cause of action
involving the same issue, parties and subject matter before two different fora.

WHEREFORE, the Court Resolved to DISMISS the petition.

SO ORDERED.

21
G.R. No. L-67485 April 10, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-


TUCP, petitioner,
vs.
DIR. CRESENCIANO B. TRAJANO, Bureau of Labor Relations, Ministry of Labor and Employment,
Manila, FEDERATION OF UNIONS OF RIZAL (FUR)-TUCP, and CALINOG REFINERY CORPORATION
(NASUREFCO), respondents.

This petition for certiorari seeks to annul and set aside the decision rendered by the respondent Director
Cresenciano B. Trajano of the Bureau of Labor Relations, Ministry of Labor and Employment, dated November
18, 1983 affirming the order of Med-Arbiter Demetrio Correa dated May 2, 1983 giving due course to the petition
for certification election filed by private respondent Federation of Unions of Rizal (FUR)-TUCP; and the order
dated March 21, 1984 denying the motion for reconsideration for lack of merit.

The antecedent facts are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP)-TUCP is the certified
exclusive bargaining representative of the rank and file workers of Calinog Refinery Corporation. Private
respondent Federation of Unions of Rizal (FUR)-TUCP is a labor organization duly registered with the
Department of Labor and Employment while private respondent Calinog Refineries Employees Union (CREU)-
NACUSIP is the certified exclusive bargaining representative of the rank and file workers of the private
respondent Calinog Refinery Corporation by virtue of the certification election held on March 30, 1981.

On June 21, 1982, petitioner union filed a petition for deadlock in collective bargaining with the Ministry of Labor
and Employment (now Department of Labor and Employment). In order to obviate friction and tension, the parties
agreed to submit the petition for deadlock to compulsory arbitration on July 14, 1982 and was docketed as RAB
Case No. VI-0220-82.

On July 21, 1982, private respondent FUR-TUCP filed with the Regional Office No. VI, MOLE (now DOLE), Iloilo
City a petition for certification election among the rank and file employees of private respondent company,
alleging that: (1) about forty-five percent (45%) of private respondent company's employees had disaffiliated from
petitioner union and joined private respondent union; (2) no election had been held for the past twelve (12)
months; and (3) while petitioner union had been certified as the sole collective bargaining agent, for over a year it
failed to conclude a collective bargaining agreement with private respondent company. Petitioner union filed a
motion to intervene in the petition for certification election filed by private respondent union.

By order dated July 23, 1982, the Acting Med-Arbiter Pacifico V. Militante dismissed the petition for certification
election for lack of merit since the petition is barred by a pending bargaining deadlock.

On August 25, 1982, private respondent union filed an appeal to the Bureau of Labor Relations, Manila.

The Bureau of Labor Relations through respondent Director Cresenciano B. Trajano rendered a decision on
September 30, 1982 setting aside the order of the Acting Med-Arbiter and remanding the case to Regional Office
VI, Iloilo City for hearing and reception of evidence.

On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD Case No. 4293 giving due
course to the petition of private respondent FUR-TUCP and ordering that an election be held within 20 days from
receipt of the order.

From the order of Med-Arbiter Correa, petitioner interposed an appeal to the Bureau of Labor Relations.

22
During the pendency of the appeal or on September 10, 1983, a collective bargaining agreement was entered
and executed by the management of the National Sugar Refineries Co., Inc. and petitioner union and was
subsequently ratified by a majority of the rank and file employees. On the basis of the concluded CBA, the
Honorable Executive Labor Arbiter Celerino Grecia II issued an award dated September 12, 1983 adopting the
submitted agreement as the CBA between the parties.

On November 18, 1983, respondent Director Trajano rendered a decision affirming with qualification the order of
Med-Arbiter Correa dated May 2, 1983, the pertinent portions of which provide as follows:

It appears that the Calinog Refinery Employees, Union-NACUSIP-TUCP no longer commands


the support of the majority of the employees. This observation is buttressed by the fact that more
than seventy five percent (75%) of the workers have disaffiliated from the intervenor and joined
the ranks of the petitioner. Thus, intervenor's status as sole and exclusive bargaining
representative is now of doubtful validity.

For the above-mentioned reason, we stand obliged to resort to the most expeditious, practical
and democratic option open to us, that is, the conduct of a certification election. Through this
forum, the true sentiments of the workers as to which labor organization deserves their loyalty
can be fairly ascertained. In any event, it is our view that the 10 September 1983 collective
agreement should be respected by the union that shall prevail in the election not only because it
is an arbitration award but also because substantial benefits are provided thereunder. Otherwise
stated, the winning union shall administer said agreement. In passing, it may be pointed out that
CAREFCO has been included as one of the contending parties in the election. We feel that it is
error for the acting Med-Arbiter to do so considering that the company is a mere bystander in this
representation dispute.

WHEREFORE, as above qualified, the Order dated 2 May 1983 is affirmed.

SO DECIDED. (Rollo, pp. 40-41)

From the decision of respondent Director Trajano, petitioner filed a motion for reconsideration dated December 6,
1983.

The respondent Director in his order dated March 21, 1984 denied the motion for reconsideration for lack of merit
and affirmed the Bureau's decision of November 18, 1983.

Hence, this petition.

This Court in a resolution dated December 10, 1984 resolved to grant the urgent motion of petitioner for the
issuance of a restraining order and issued a temporary restraining order enjoining the respondents from
conducting and holding the certification election on December 17, 1984 among the rank and file employees of
respondent company (see Rollo, p. 99).

Petitioner maintains that respondent Director Trajano committed grave abuse of discretion amounting to lack of
jurisdiction when it rendered a decision affirming the order of Med-Arbiter Correa finding that the deadlock is
"nothing but a mere subterfuge to obstruct the exercise of the workers of their legitimate right to self-organization,
a last minute maneuver to deny the workers the exercise of their constitutional rights" (Rollo, p. 28) and ordering
a certification election among the rank and file workers of respondent company.

Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule has no room for application
in the instant case, runs counter to the provision of Section 3 of the Rules Implementing Batas Pambansa Blg.
130 which prohibits the filing of a petition for certification election during the pendency of a bargaining deadlock.
23
In conformity with the petitioner's contentions, the Solicitor General insists that the respondent Director has acted
arbitrarily in issuing the assailed decision and order. In addition, it argues that the CBA concluded on September
10, 1983 has a life span of three (3) years and constitutes a bar to the petition for certification election pursuant
to Section 3 of the Rules Implementing Batas Pambansa Blg. 130.

The pivotal issue therefore, is whether or not a petition for certification election may be filed during the pendency
of a bargaining deadlock submitted to arbitration or conciliation.

After a careful review of the records of this case, the Court finds the petition meritorious and holds that the
respondent Director gravely abused his discretion when he affirmed the order of Med-Arbiter Correa calling for a
certification election among the rank and file workers of private respondent company.

The law on the matter is Section 3, Book V, Rule V of the Omnibus Rules Implementing the Labor Code, to wit:

Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed at any
time. However, no certification election may be held within one year from the date of issuance of
a final certification election result. Neither may a representation question be entertained if, before
the filing of a petition for certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been submitted to conciliation or arbitration or had
become the subject of valid notice or strike or lockout.

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 clear mandate of the aforequoted section is that a petition for certification election may be filed at any time,
in the absence of a collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for
certification election in the following cases:

(1) during the existence of a collective bargaining agreement except within the freedom period;

(2) within one (1) year from the date of issuance of declaration of a final certification election result; or

(3) during the existence of a bargaining deadlock to which an incumbent or certified bargaining agent is a party
and which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or
lockout.

The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained if there is
no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the
management.

In the case at bar, a bargaining deadlock was already submitted to arbitration when private respondent FUR-
TUCP filed a petition for certification election. The same petition was dismissed for lack of merit by the Acting
Med-Arbiter in an order dated July 23, 1982 on the sole ground that the petition is barred by a pending
bargaining deadlock. However, respondent Director set aside the same order and subsequently affirmed an
order giving due course to the petition for certification election and ordering that an election be held.

The law demands that the petition for certification election should fail in the presence of a then pending
bargaining deadlock.

24
A director of the Bureau of Labor Relations, by the nature of his functions, acts in a quasi-judicial capacity. We
find no reason why his decision should be beyond this Court's review. Administrative officials, like the director of
the Bureau of Labor Relations are presumed to act in accordance with law but this Court will not hesitate to pass
upon their work where there is a showing of abuse of authority or discretion in their official acts or when their
decisions or orders are tainted with unfairness or arbitrariness.

Noteworthy is the fact that a certification was issued by Executive Labor Arbiter Celerino Grecia II on October 21,
1982 certifying that the petition for deadlock in RAB Case No. VI-0220-82 was forwarded to the Executive Labor
Arbiter for compulsory arbitration (see Rollo, p. 19). The respondent Director erred in finding that the order issued
by the Med-Arbiter dismissing the petition for certification election was irregular and was merely based on
information.

All premises considered, the Court is convinced that the assailed decision and order of the respondent Director is
tainted with arbitrariness that would amount to grave abuse of discretion.

ACCORDINGLY, the petition is GRANTED; the decision dated November 18, 1983 and order dated March 21,
1984 of the respondent Director Cresenciano B. Trajano are hereby nullified and the order of Med-Arbiter
Militante dated July 23, 1982 dismissing the petition for certification election is hereby reinstated.

SO ORDERED.

25
G.R. No. 75810 September 9, 1991

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner,


vs.
HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON
GARMENTS MFG., CO., INC., respondents.

The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.

By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of
Labor Unions (NAFLU) was declared the exclusive bargaining representative of all rank-and-file employees of
Viron Garments Manufacturing Co., Inc. (VIRON).

More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino
KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for certification election among the
employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of the
workers at VIRON.

NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a
certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the
requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no
collective bargaining agreement had been executed between it and VIRON.

NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it
was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which
had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for election
in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as
follows:

SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance
with Article 231 of the Code, a petition for certification election may be filed at any time. However, no
certification election may be held within one year from the date of issuance of declaration of a final
certification election result. Neither may a representation question be entertained if, before the filing of a
petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining
agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout.

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.

Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986
setting aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election.
This disposition is justified in the Resolution as follows:

... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its
course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that
NAFLU slept on its right to bargain collectively with the employer. If a closer look was made on the
history of labor management relations in the company, it could be readily seen that the delay in the
negotiations for and conclusion of a collective agreement — the object of the one-year period — could be
attributed first, on the exhaustion of all legal remedies in the representation question twice initiated in the

26
company before the filing of the present petition and second, to management who had been resisting the
representations of NAFLU in collective bargaining.

The one-year period therefore, should not be applied literally to the present dispute, especially
considering that intervenor had to undergo a strike to bring management to the negotiation table. ...

KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the
present certiorari action.

It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the
date of issuance of declaration of a final certification election result' — in this case, from February 27, 1981, the
date of the Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of
VIRON — can have no application to the case at bar. That one-year period-known as the "certification year"
during which the certified union is required to negotiate with the employer, and certification election is
prohibited2 — has long since expired.

Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred
because, before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent,
had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout, in
accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted.

Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such
"bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a
valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to
bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled
promises to bargain collectively;3 but there is no proof that it had taken any action to legally coerce VIRON to
comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it
did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and
compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had
been delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in
VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining
process between it and VIRON.

The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive
bargaining representative of all VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for
certification election or a period of more than four (4) years, no collective bargaining agreement was ever
executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation
proceedings or the filing of a valid strike notice.

The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and
for violation of terms and conditions of employment, which was settled by the parties' agreement, and to another
strike staged on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has
since been certified for compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however,
these activities took place after the initiation of the certification election case by KAMPIL, and it was grave abuse
of discretion to have regarded them as precluding the holding of the certification election thus prayed for.

WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in
the case at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested
Resolution of the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-
7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent.

SO ORDERED

27
G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS,


(CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment;
CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND
CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA CLEMENTE, President, respondents.

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of
public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in
Case No. OS.-A-136-94 1 which dismissed the petition for certification election filed by petitioner for lack of merit
and further directed private respondent hospital to negotiate a collective bargaining agreement with respondent
union, Capitol Medical Center Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's
petition for certification election among the rank-and-file employees of the Capitol Medical Center.2 Respondent
CMC appealed the Order to the Office of the Secretary by questioning the legal status of respondent union's
affiliation with the Alliance of Filipino Workers (AFW). To correct any supposed infirmity in its legal status,
respondent union registered itself independently and withdrew the petition which had earlier been granted.
Thereafter, it filed another petition for certification election.

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.3Respondent CMC again appealed to the Office of the Secretary which affirmed 4 the Order of the Med-
Arbiter granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no
union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz
issued an Order certifying respondent union as the sole and exclusive bargaining representative of the rank and
file employees at CMC. 5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of
Labor which appeal was denied on February 26, 1993.6 A subsequent motion for reconsideration filed by
respondent CMC was likewise denied on March 23, 1993.7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent
union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap
issued an Order dated February 4, 1993 which declared respondent union's certificate of registration as null and
void.8 However, this order was reversed on appeal by the Officer-in-Charge of the Bureau of Labor Relations in
her Order issued on April 13, 1993. The said Order dismissed the motion for cancellation of the certificate of
registration of respondent union and declared that it was not only a bona fide affiliate or local of a federation
(AFW), but a duly registered union as well. Subsequently, this case reached this Court in Capitol Medical Center,
Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December 13, 1993,
dismissing the petition of CMC for failure to sufficiently show that public respondent committed grave abuse of
discretion.9 The motion for reconsideration filed by CMC was likewise denied in our Resolution dated February 2,
1994. 10 Thereafter, on March 23, 1994, we issued an entry of judgment certifying that the Resolution dated
December 13, 1993 has become final and executory. 11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of
respondent CMC by Med-Arbiter Cruz, presented economic proposals for the negotiation of a collective

28
bargaining agreement (CBA). However, respondent CMC contended that CBA negotiations should be suspended
in view of the Order issued on February 4, 1993 by Med-Arbiter Adap declaring the registration of respondent
union as null and void. In spite of the refusal of respondent CMC, respondent union still persisted in its demand
for CBA negotiations, claiming that it has already been declared as the sole and exclusive bargaining agent of
the rank-and-file employees of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1,
1993. After complying with the other legal requirements, respondent union staged a strike on April 15, 1993. On
April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and issued an order certifying the same
to the National Labor Relations Commission for compulsory arbitration where the said case is still pending. 12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the
regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred
thirty one (331) out of the four hundred (400) total rank-and-file employees of respondent CMC signed a petition
to conduct a certification election; and 2) that the said employees are withdrawing their authorization for the said
union to represent them as they have joined and formed the union Capitol Medical Center Alliance of Concerned
Employees (CMC-ACE). They also alleged that a certification election can now be conducted as more that 12
months have lapsed since the last certification election was held. Moreover, no certification election was
conducted during the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet
been concluded between respondent union and respondent CMC despite the lapse of twelve months from the
time the said union was voted as the collective bargaining representative.

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the
certified bargaining agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary
of Labor and Employment and by this Court. It also alleged that it was not remiss in asserting its right as the
certified bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the
latter's avoidance to bargain collectively. Respondent union was even constrained to strike on April 15, 1993,
where the Secretary of Labor intervened and certified the dispute for compulsory arbitration. Furthermore, it
alleged that majority of the signatories who supported the petition were managerial and confidential employees
and not members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to
petitioner's allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as
more than twelve (12) months had lapsed since respondent union was certified as the exclusive bargaining agent
and no CBA was as yet concluded. It also claimed that the other issues raised could only be resolved by
conducting another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper,
immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It
claimed that CMC employed "legal obstructionism's" in order to let twelve months pass without a CBA having
been concluded between them so as to pave the way for the entry of petitioner union.

On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election
among the rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no certification election
was held within one year from the date of issuance of a final certification election result and there was no
bargaining deadlock between respondent union and the employees that had been submitted to conciliation or
had become the subject of a valid notice of strike or lock out, there is no bar to the holding of a certification
election. 14

Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for
certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules Implementing

29
the Labor Code. 15 It also prayed that the said provision must not be applied strictly in view of the facts in this
case.

Petitioner union did not file any opposition to the appeal.

On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He ratiocinated that
while the petition was indeed filed after the lapse of one year form the time of declaration of a final certification
result, and that no bargaining deadlock had been submitted for conciliation or arbitration, respondent union was
not remiss on its right to enter into a CBA for it was the CMC which refused to bargain collectively. 17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively
with a union since the only issue involved is the determination of the bargaining agent of the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification
election would result in the denial of their substantial rights and interests. Moreover,it contended that public
respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay which was caused by the Hospital,
. . ." was unsupported by the facts and the records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration
hence this petition. 18

The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in
dismissing the petition for certification election, and in directing the hospital to negotiate a collective bargaining
agreement with the said respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against
the holding of a certification election. It further claims that the denial of due process can be gleaned from the
manner by which the assailed resolution was written, i.e., instead of the correct name of the mother federation
UNIFIED, it was referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as
CMCEA-AFLO. Petitioner maintains that such errors indicate that the assailed resolution was prepared with
"indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter
the substance and merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of
the questioned resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking vainly
trying to make a monumental issue out of a negligible error of the public respondent." 19

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which
was caused by the hospital and which resulted in the non-conclusion of a CBA within the certification year.'' 20 It
further argues that the denial of its motion fro a fair hearing was clear case of denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent
union's appeal.

30
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the
Labor Code where a certification election should be conducted, viz: (1) that one year had lapsed since the
issuance of a final certification result; and (2) that there is no bargaining deadlock to which the incumbent or
certified bargaining agent is a party has been submitted to conciliation or arbitration, or had become the subject
of a valid notice of strike or lockout, are present in this case. It further claims that since there is no evidence on
record that there exists a CBA deadlock, the law allowing the conduct of a certification election after twelve
months must be given effect in the interest of the right of the workers to freely choose their sole and exclusive
bargaining agent.

While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification
result, and that there is no collective bargaining deadlock, public respondent did not commit grave abuse of
discretion when it ruled in respondent union's favor since the delay in the forging of the CBA could not be
attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of
CMC, it invited the employer hospital to the bargaining table by submitting its economic proposal for a CBA.
However, CMC refused to negotiate with respondent union and instead challenged the latter's legal personality
through a petition for cancellation of the certificate of registration which eventually reached this Court. The
decision affirming the legal status of respondent union should have left CMC with no other recourse but to
bargain collectively; but still it did not. Respondent union was left with no other recourse but to file a notice of
strike against CMC for unfair labor practice with the National Conciliation and Mediation Board. This eventually
led to a strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the
subject petition for certification election on March 24, 1994, claiming that twelve months had lapsed since the last
certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition
for certification election, which had been submitted to conciliation or had become the subject of a valid notice of
strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had the occasion
to define what a deadlock is, viz:\

A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a


deadlock when there is a complete blocking or stoppage resulting from the action of equal and
opposed forces . . . . The word is synonymous with the word impasse, which . . "presupposes
reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in
agreement between the parties."

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor
"reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals of
respondent union were never answered by CMC. In fact, what happened in this case is worse than a bargaining
deadlock for CMC employed all legal means to block the certification of respondent union as the bargaining
agent of the rank-and-file; and use it as its leverage for its failure to bargain with respondent union. Thus, we can
only conclude that CMC was unwilling to negotiate and reach an agreement with respondent union. CMC has not
at any instance shown willingness to discuss the economic proposals given by respondent union. 22

As correctly ratiocinated by public respondent, to wit:

31
For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and
which resulted in the non-conclusion of a CBA within the certification year, would be to negate
and render a mockery of the proceedings undertaken before this Department and to put an
unjustified premium on the failure of the respondent hospital to perform its duty to bargain
collectively as mandated in Article 252 of the Labor Code, as amended, which states".

"Article 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 grievance 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."

The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt
flowing from the respondent hospital's reluctance and thinly disguised refusal to bargain. 23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to
conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an employer
to the negotiation table by the "no reasonable effort in good faith" on the employer certified bargaining agent,
there was to bargain collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice
Andres R. Narvasa, the factual milieu of which is similar to this case, this Court allowed the holding of a
certification election and ruled that the one year period known as the "certification year" has long since expired.
We also ruled, that:

. . . prior to the filing of the petition for election in this case, there was no such "bargaining
deadlock . . (which) had been submitted to conciliation or arbitration or had become the subject of
a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that
its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's
recalcitrance, and unfulfilled promises to bargain collectively; but there is no proof that it had
taken tiny action to legally coerce VIRON to comply with its statutory duty to bargain
collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have
gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it
to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain
collectively had been delayed by continuing challenges to the resolution pronouncing it the sole
bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it
did in fact prevent initiation of the bargaining process between it and VIRON. 24

Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case,
NAFLU was counselled by this Court on the steps that it should have undertaken to protect its interest, but which
it failed to do so.

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there
was proof that the certified bargaining agent, respondent union, had taken an action to legally coerce the
employer to comply with its statutory duty to bargain collectively, i.e., charging the employer with unfair labor
practice and conducting a strike in protest against the employer's refusal to bargain. 25 It is only just and equitable
that the circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no
certification election could be held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating a
CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be interpreted liberally so as to include a
circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its
duty to bargain collectively.
32
The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the
instant petition is hereby DISMISSED.

33
G.R. No. 107792 March 2, 1998

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners,


vs.
THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND
EXPORTER CORPORATION, respondents.

This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12,
1992, of Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a certification election to be
conducted among the employees of respondent company.

The facts of the case are as follows. On January 15, 1991, a certification election was conducted among
employees of respondent Permex Producer and Exporter Corporation (hereafter referred to as Permex
Producer). The results of the elections were as follows:

National Federation of Labor 235


(NFL)

No Union 466

Spoiled Ballots 18

Marked Ballots 9

Challenged Ballots 7

However, some employees of Permex Producer formed a labor organization known as the Samahang
Manggagawa sa Permex (SMP) which they registered with the Department of Labor and Employment on March
11, 1991. The union later affiliated with the Philippine Integrated Industries Labor Union (PIILU).

On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-
PIILU), wrote the respondent company requesting recognition as the sole and exclusive bargaining
representative of employees at the Permex Producer. On October 19, 1991 Permex Producer recognized SMP-
PIILU and, on December 1, entered into a collective bargaining agreement with it. The CBA was ratified between
December 9 and 10, 1991 by the majority of the rank and file employees of Permex Producer. On December 13,
1991, it was certified by the DOLE.

On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-
Arbiter Edgar B. Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the
Secretary of Labor and Employment. On October 8, 1992, the Secretary of Labor, through Undersecretary
Bienvenido Laguesma, set aside the order of the Med-Arbiter and ordered a certification election to be conducted
among the rank and file employees at the Permex Producer, with the following choices:

1. National Federation of Labor

2. Samahang Manggagawa sa Permex

3. No union

Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence,
this petition.

34
Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized
by the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues
that when a group of employees constituting themselves into an organization and claiming to represent a majority
of the work force requests the employer to bargain collectively, the employer may do one of two things. First, if
the employer is satisfied with the employees' claim the employer may voluntarily recognize the union by merely
bargaining collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining
agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition
the Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for
certification election, the union claiming to represent the employees may submit the petition so that it may be
directly certified as the employees' representative or a certification election may be held.

The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment
filed in behalf of the NLRC, is particularly apropos. There, the union also requested voluntary recognition by the
company. Instead of granting the request, the company petitioned for a certification election. The union moved to
dismiss on the ground that it did not ask the company to bargain collectively with it. As its motion was denied, the
union brought the matter to this Court. In sustaining the company's stand, this Court ruled:

. . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that
files a petition for a certification election if there is no certified bargaining agent for the workers in the
establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative of
the employees — A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the
employees' prerogative (not the employer's) to determine whether they want a union to represent them, and,
if so, which one it should be. (emphasis supplied)

In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-
TUCP when the latter asked for recognition as exclusive collective bargaining agent of the employees of the
company. The company did not have the power to declare the union the exclusive representative of the workers
for the purpose of collective bargaining,

Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of
Executive Order No. 111, which became effective on March 4, 1987, the direct certification previously allowed
under the Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the
workers. 2 Certification election is the most effective and the most democratic way of determining which labor
organization can truly represent the working force in the appropriate bargaining unit of a company. 3

Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for
registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by
542 employees. Petitioner contends that such support by the majority of the employees justifies its finding that
the CBA made by it is valid and binding.

But it is not enough that a union has the support of the majority of the employees. It is equally important that
everyone in the bargaining unit be given the opportunity to express himself. 4

This is especially so because, in this case, the recognition given to the union came barely ten (10) months after
the employees had voted "no union" in the certification election conducted in the company. As pointed out by
respondent Secretary of Labor in his decision, there can be no determination of a bargaining representative
within a year of the proclamation of the results of the certification election. 5 Here the results, which showed that
61% of the employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991
Permex Producer already recognized the union and entered into a CBA with it.

There is something dubious about the fact that just ten (10) months after the employees had voted that they did
not want any union to represent them, they would be expressing support for petitioner. The doubt is compounded
35
by the fact that in sworn affidavits some employees claimed that they had either been coerced or misled into
signing a document which turned out to be in support of petitioner as its collective bargaining agent. Although
there were retractions, we agree with the Solicitor General that retractions of statements by employees adverse
to a company (or its favored union) are oftentimes tainted with coercion and intimidation. For how could one
explain the seeming flip-flopping of position taken by the employees? The figures claimed by petitioner to have
been given to it in support cannot readily be accepted as true.

Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor
Code and Book V, Rule 5, §3 of its Implementing Rules and Regulations, a petition for certification election or
motion for intervention may be entertained only within 60 days prior to the date of expiration of an existing
collective bargaining agreement. The purpose of the rule 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. Excepted from the contract-bar rule are certain
types of contracts which do not foster industrial stability, such as contracts where the identity of the
representative is in doubt. Any stability derived from such contracts must be subordinated to the employees'
freedom of choice because it does not establish the kind of industrial peace contemplated by the law. 6 Such
situation obtains in this case. The petitioner entered into a CBA with Permex Producer when its status as
exclusive bargaining agent of the employees had not been established yet.

WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.

SO ORDERED.

36
G.R. No. L-8138 August 20, 1955

PLDT EMPLOYEES' UNION, petitioner,


vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY FREE TELEPHONE WORKERS' UNION,
(PAPLU),respondents.

On September 30, 1953, the Philippine Long Distance Telephone Company, a public utility corporation locally
organized, filed in the Court of Industrial Relations a petition for certificate under section 12 of Republic Act No.
875. It alleged that, a week before, it received from the Free Telephone Workers' Union notice of its desire to
bargain collectively; that until the receipt of such notice, the Company believed the only legitimate labor
organization existing therein was the PLDT Employees Union with which it had signed a collectively bargaining
agreement still in operation; and that said Company was in no position to determine which of the two Unions
represented the majority of the workers. Therefore it requested that an investigation be conducted for the
purpose of determining the proper collective bargaining agency for its employees, and in the event such
investigation fails to determine the proper agency that an order be issued requiring the holding of a certification
election.

Upon its petition, the PLDT Employees Union was allowed to intervene, and on October 21, 1953 it submitted a
motion to dismiss, which as amended, claimed that it had a collective bargaining agreement in force until
September 14, 1954, and that a favorable action by the Court on the petition would permit another labor
organization in the same establishment to present to the employer another set of demands and compel said
employer to bargain with it during the lifetime of an existing bargaining agreement, thereby infringing the
constitutional provision against impairment of contracts.

The Free Telephone Workers' Union-hereafter designated respondent—asserting that it represented the
preponderant majority of the employees, manifested its willingness to let the investigation proceed; and
answering the Employees' Union's motion to dismiss, it contended that the existing collective bargaining
agreement constituted no legal objection, inasmuch as no certification election had been held within the
preceding twelve months. As to the alleged impairment of the existing collective contract, it argued there was no
such impairment, because 'the contract is between the company and the employees represented by the
intervenor union who are the principals and can change their agent at will" by a majority which it is desired to
ascertain.

After considering the pleadings and the arguments, the Hon. Arsenio Roldan, Presiding Judge, dismissed the
petition in December 1953 principally for the reason that the collective bargaining agreement between the
intervenor and the company will expire on September 14, 1954, and that before such date it may not be changed
nor amended.

The respondent Workers' Union asked for reconsideration, which the intervenor opposed. On August 9, 1954 the
Court of Industrial Relations in banc, by majority vote, set aside the order of dismissal and remanded the case for
"determination of the appropriate collective bargaining unit, (agency) after which the holding of a certification
election in accordance with law should be ordered", (if necessary).

Hence this petition for review—which takes the place of an appeal from the order of the Court of Industrial
Relations.

It is the general rule that only final judgments or orders are appealable to this Court. An interlocutory order may
not be appealed. (Rule 41 sec. 2) "An order or judgment is deemed final when it finally disposes of the pending
action so that nothing more can be done with it in the trial court. In other words, a final order is that which gives
an end to the litigation . . . when the order or judgment does not dispose of the case completely but leaves
something to be done upon the merits, it is merely interlocutory. For instance an order denying a motion of
dismissal founded on lack of jurisdiction . . .is merely interlocutory,"1 and is not appealable.
37
It would seem from the foregoing that this petition for review or appeal of the intervenor is premature, the order
denying its motion to dismiss not being a final order. The Industrial Court still had to determine the proper
bargaining agency or direct a certification election. There was something to be done in the Industrial Court.

We are aware, of course, that the law permitting appeals to this Court from "any order" of the Court of Industrial
Relations does not in any line employ the word "final". But it is reasonable to suppose that Congress did not
intend to disregard such well-known rule of orderly procedure, which is based partly upon the convenience of the
appealing party itself, in the sense of forestalling useless appeals. In this case for example, if instead of
appealing, the intervenor allowed the investigation to continue, and later it is declared to be the proper bargaining
agency, then this appeal would have been useless. If it is not so declared—then perhaps2 it is time to appeal; not
before. Before that time it may not claim to be aggrieved by the order remanding the case for ascertainment of
the labor union which represents the majority.

The assertion that the appealed order impairs petitioner's collective bargaining agreement is unfounded, because
the tenor of the order precisely contemplates that any bargaining agreement between the Telephone Company
and the newly-found bargaining agency will have effect only after September 14, 1954 when the (then) existing
collective agreement could be properly terminated.

On this point petitioner insists the respondent Court could not say the contract would expire on September 14,
1954, in view of the following stipulation in the bargaining agreement:

that it is hereby mutually agreed upon by the parties that the duration of this Agreement shall be for a
period of one year, counting from the date of its signing by said parties, with the understanding that it
shall be considered renewed or extended from year to year thereafter, unless it is terminated by any one
of the parties in writing to the other at least thirty days before it is proposed to expire.

Petitioner takes the position that, far from automatically ceasing on September 14, 1954, the contract is
automatically renewed—unless it is denounced by one of the parties. Yet when the court mentioned September
14, 1954, it merely meant that according to the contract on that date it may be denounced or substituted by one
of the parties; and the Telephone Company by filing the petition obviously and foresightedly manifested its
intention to terminate such contract with petitioner, if and when, it is found that said petitioner no longer
represented the majority of the Company's employees.3 Furthermore, as explained by the Industrial Court.

"If a certification election is not held immediately, the agreement may be renewed with or without modification by
the parties thereto and again it may be used as an argument to bar the subsequent holding of a certification
election. The result would be to deprive entirely the Free Telephone Workers' Union (PAFLU) of an opportunity to
prove that it, and not the PLDT Employees Union, has the majority status and, therefore, entitled to represent all
the employees of the Company for collective bargaining purposes.

It is interesting to note in this regard that in the United States, where we copied the present Industrial Peace Act
an existing collective bargaining contract with a union is a bar to subsequent certification election when . . . it has
a definite and reasonable period to run and has not been in existence for too long a period (history, industry and
customs may affect reasonablesness of the contract term . . ..) (Werne Law of Labor Relations p. 27 citing U. S.
Finishing Co. 63 NLRB 575.) Normally, the National Labor Relations Board is inclined to regard long-term
contracts, which have been in existence for more than two years, as no obstacle to determining bargaining
representatives. (Werne op. cit pp. 28-29 citing several cases.)

A contract which provides for automatic renewal in the absence of notice by one of the contracting parties
of intention to alter, modify or terminate it prior to a specified period preceding the termination date, will
operate as a bar to an election. However, this rule does not apply where a contesting union has given
timely notice to the employer or filed a petition with the Board reasonably prior to the specified date for
automatic renewal. (Werne, op. cit p. 29 citing several Labor Board cases.)

38
Explaining its position in detail, the National Labor Relations Board said in the case of Reed Roller Bit Co. 72 N.
L. R. B. 927:

Whenever a contract is urged as a bar, the Board is faced with the problem of balancing two separate
interests of employees and society which the Act was designed to protect: the interest in such stability as
is essential to encourage effective collective bargaining, and the sometimes conflicting interest in the
freedom of the employees to select and change their representatives. In furtherance of the purposes of
the Act, we have repeatedly held that employees are entitled to change their representatives, if they so
desire, at reasonable intervals; or conversely, that a collective bargaining contract may preclude a
determination of representatives for a reasonable period.

In the light of our experience in administering the Act, we believe that a contract for a term of 2 years
cannot be said to be of unreasonable duration. We have already held that 2-year contracts are
presumptively of reasonable duration. In applying this rule, we have not discovered any compelling
conditons which indicate that such agreements unduly limit the right of employees to change their
representatives. Moreover, in entertaining rival petitions several months before the expiration of the
numerous 1-year contracts which are made, we have found in many instances the contracting parties,
having composed their differences and executed collective bargaining contracts after the expenditure of
much time, effort and money, can feel truly secure in their respective positions only for the brief period of
approximately 8 to 9 months.

For large masses of employees collective bargaining has but recently emerged from a stage of trial and
error, during which its techniques and full potentialities were being slowly developed under the
encouragement and protection of the Act. To have insisted in the past upon prolonged adherence to a
bargaining agent, once chosen, would have been wholly incompatible with this experimental and
transitional period. It was especially necessary, therefore, to lay emphasis upon the right of workers to
select and change their representatives. Now, however, the emphasis, can better be placed elsewhere.
We think that the time has come when stability of industrial relations can be better served, without
unreasonably restricting employees in their right to change representatives, by refusing to interfere with
bargaining relations secured by collective agreements of 2 years' duration. (Mathews, Labor Relations
And The Law (1953) p. 191-192.)

Now then, as this contract between the Company and the petitioner was signed December 1, 1951, it had been
in operation more than two years in August 1954 when the certification election was ordered. It is therefore no
bar to the certification even under American labor views.

By the way, this is not to hold that as a matter of law in this jurisdiction the two-year period is a definite term
within which bargaining contracts are not to be disturbed. Indeed, the statute providing that certification elections
shall not be ordered oftener than once a year, (Sec. 12 (b) R. A. 875) might give ground to the argument that a
collective bargaining agreement between the employer and a labor union representing the majority of the
laborers may be terminated, after a year, by a new majority organization. The quotations are herein made merely
to exhibit some considerations that have influenced or may influence the courts in the exercise of their discretion
in the matter.

Anent the alleged impairment of its contract, petitioner should keep in mind the modern concept embodied in the
New Civil Code, that labor contracts being impressed with common interest are subject to the special laws on
labor unions, collective bargaining, strikes, lockouts etc. (Art. 1700.)

In view of the foregoing, this petition for review should be denied. To avoid misunderstandings however, it should
be made clear that the next step is for the court a quo to determine after a speedy and appropriate hearing upon
notice, the labor union that represents the majority of the such majority, then said court may order a cetification
election in accordance with legal provisions.

39
G.R. No. 97020 June 8, 1992

CALIFORNIA MANUFACTURING CORPORATION, petitioner,


vs.
THE HONORABLE UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA, ABD FEDERATION OF
FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION CHAPTER
(CALMASUCO), respondents.

This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining order
seeking to annul and set aside the (a) resolution * of the Department of Labor and Employment dated October
16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095) entitled "In Re: Petition for Certification Election Among the
Supervisors of California Manufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp.
Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing Corporation, employer-
appellant" which denied herein petitioner's appeal and affirmed the order of Med-Arbiter Arsenia Q. Ocampo
dated August 22, 1990 directing the conduct of a certification election among the supervisory employees of
California Manufacturing Corporation, and (b) the Order ** of the same Department denying petitioner's motion
for reconsideration.

As culled from the records, the following facts appear undisputed:

On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing
Corporation (CMC for brevity) was filed by the Federation of Free Workers (FFW) — California Manufacturing
Corporation Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly registered federation
with registry certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is a duly registered chapter with
registry certificate no. 1-AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC
employs one hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the
company; that the petition is filed in accordance with Article 257 of the Labor Code, as amended by Republic Act
No. 6715; and that the petition is nevertheless supported by a substantial member of signatures of the
employees concerned (Annexes "E" and "F", Ibid., pp. 28-29).

In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a certification
election should be denied as it is not supported by the required twenty-five percent (25%) of all its supervisors
and that a big number of the supposed signatories to the petition are not actually supervisors as they have no
subordinates to supervise, nor do they have the powers and functions which under the law would classify them
as supervisors (Annex "D", Ibid., P. 25).

On July 24. 1990, FFW—CALMASUCO filed its reply maintaining that under the law, when there is no existing
unit yet in a particular bargaining unit at the time a petition for certification election is filed, the 25% rule on the
signatories does not apply; that the "organized establishment" contemplated by law does not refer to a
"company"per se but rather refers to a "bargaining unit" which may be of different classifications in a single
company; that CMC has at least two (2) different bargaining units, namely, the supervisory (unorganized) and the
rank-and-file (organized); that the signatories to the petition have been performing supervisory functions; that
since it is CMC which promoted them to the positions, of supervisors. it is already estopped from claiming that
they are not supervisors; that the said supervisors were excluded from the coverage of the collective bargaining
agreement of its rank-and-file employees; and that the contested signatories are indeed supervisors as shown in
the "CMC Master List of Employees" of January 2, 1990 and the CMS Publication (Annex "G", Ibid., p 30).

On August 12, 1990, the Med-Arbiter issued an order, the decretal portion of which reads:

WHEREFORE, premises considered, it is hereby ordered that a certification election be


conducted among the supervisory employees of California Manufacturing Corporation within twenty (20)
days from receipt hereof with the usual pre-election conference of the parties to thresh out the mechanics

40
of the election The payroll of the company three (3) months prior to the filing of the petition shall be used as
the basis in determining the list of eligible voters.

The choices are:

1. Federation of Free Workers (FFW) California Manufacturing Corporation


Supervisors Union Chapter (CALMASUCO); and

2. No union.

SO ORDERED. (Annex "H" Ibid., p. 33).

CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above order
in its assailed resolution dated October 16, 1990 (Annex, "B", Ibid, a 18) CMC's subsequent motion for
reconsideration was also denied in its order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence, his
petition.

a) whether or not the term "unorganized establishment' in Article 257 of the tabor Code refers to a
bargaining unit or a business establishment;

b) whether or not non-supervisors can participate in a supervisor's certification election; and

c) whether or not the two (2) different and separate plants of herein petitioner in Parañaque and
Las Piñas can be treated as a single bargaining unit.

The petition must be denied.

The Court has already categorically ruled that Article 257 of the Labor code is applicable to unorganized labor
organizations and not to establishments where there exists a certified bargaining agent which had previously
entered into a collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja,
G.R. No. 85085, November 6, 1989, 179 SCRA 127) (Emphasis supplied). Otherwise stated, the establishment
concerned must have no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja G.R. No. 82260,
July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMC which
constitute a bargaining unit separate and distinct from that of the rank-and-file, have no such agent. thus they
correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate
labor organization. CMC's insistence on the 25% subscription requirement, is clearly immaterial. The same has
been expressly deleted by Section 24 of Republic Act No. 6715 and is presently prescribed only in organized
establishments, that is, those with existing bargaining agents. Compliance with the said requirement need not
even be established with absolute certainty. The Court has consistently ruled that "even conceding that the
statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not been strictly
compiled with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the
purpose of ascertaining which of the contending labor organizations shall be the exclusive collective bargaining
agent (Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA
565). The requirement then is relevant only when it becomes mandatory to conduct a certification election. In all
other instances, the discretion, according to the rulings of this Tribunal, ought to be ordinarily exercised in favor
of a petition for certification (National Mines and Allied Workers Union (NAMAWU-UIF) v. Luna, et al., G.R. No.
L-46722, June 15, 1978, 83 SCRA 607).

In any event, CMC as employer has no standing to question a certification election (Asian Design and
Manufacturing Corporation v. Calleja, et al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole
concern of the workers. The only exception is where the employer has to file the petition for certification election
pursuant to Article 259 (now 258) of the Labor Code because it was requested to bargain collectively. Thereafter,
41
the role of the employer in the certification process ceases. The employer becomes merely a bystander. Oft-
quoted is the pronouncement of the Court on management interference in certification elections, thus:

On matters 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 purely internal affair of labor. (Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano. G.R. No. L-61153 January 17, 1983, 120 SCRA
64 citing Consolidated Farms, Inc. v. Noriel, G.R No. L-47752 July 31, 1978, 84 SCRA 469, 473).

PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.

SO ORDERED.

42
G.R. No. 102350 June 30, 1994

TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES WORLD FEDERATION OF TRADE
UNIONS (TUPAS-WFTU), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, in his capacity as Undersecretary of Labor & Employment and
NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), respondents.

The records reveal that the rank-and-file employees of the Philippine Development and Industrial Corporation
(PDIC), represented by petitioner Trade Unions of the Philippines and Allied Services (TUPAS), entered into a
collective bargaining agreement with said company. The CBA expired on April 31, 1991.

On March 8, 1991, PDIC received a letter from the president of petitioner’s local chapter union. The company
was informed that the union had resolved to disaffiliate from petitioner and affiliate with private respondent
National Federation of Labor Unions (NAFLU). PDIC entertained reservations about the validity of the
disaffiliation. It was not clear whether the union’s board resolution to disaffiliate was ratified by the majority of its
members. Furthermore, PDIC had received reports that some employees were coerced to support the
disaffiliation.

On April 24, 1991, within the 60-day freedom period, PDIC and private respondent NAFLU filed separate
petitions for certification election with the Department of Labor and Employment (DOLE), Regional Office No. 3 in
San Fernando, Pampanga. Both petitions prayed for the holding of a certification election between NAFLU and
petitioner TUPAS, to determine the collective bargaining agent of the rank-and-file employees in PDIC’s plant
and quarry. The two petitions were consolidated and docketed as Case No. R033-9104-RU-006, with petitioner
TUPAS as compulsory intervenor.

On May 14, 1991, petitioner TUPAS filed an Urgent Motion To Refer Case To LACC Fraternal Relations
Committee, citing paragraph 1(b) of the LACC (Labor Advisory Consultative Council) Code of Ethics which
provides:

1. Non-Union raiding

xxx xxx xxx

b. Where company is organized.

All organized local affiliates or unions of any LACC member must be discouraged
from disaffiliating from their incumbent labor federations/national union affiliation. However, LACC recognizes
the ultimate authority and right of the local unions to decide for themselves during the freedom period. In the
event that said local unions intend to disaffiliate from any LACC member and to affiliate with another member,
the latter must inform the former about the intention of their said local union and to settle the matter by
themselves. If not so settled, the matter will be brought to the attention of the Fraternal Relations Committee of
the LACC for final determination or settlement. 1

Said Code of Ethics was adopted and signed by four base organizations, namely: Kilusang Mayo Uno (KMU), to
which private respondent NAFLU is affiliated; Federation of Free Workers (FFW); Lakas ng Manggagawa Labor
Center (LMLC); and Philippine World Federation of Trade Unions (WFTU) Affiliates, which includes petitioner
TUPAS. 2 Petitioner urged the DOLE to "give its imprimatur and uphold the binding effect of the Code among the
LACC members." 3

Despite the Urgent Motion, Med-Arbiter Antonio R. Cortez, on June 3, 1991, issued an Order with the following
dispositive portion:
43
ACCORDINGLY, let a certification election be conducted among the regular rank-and-file
employees of the Philippine Development and Industrial Corporation, with the following choices, to wit:

1. National Federation of Labor Unions (NAFLU);

2. Trade Unions of the Philippines Allied Services


(TUPAS); and

3. No Union.

The January 1991 payrolls shall be used as the basis to determine the qualified voters in this
election.

A pre-election conference intended to thresh out the mechanics of the aforesaid election will be
called by this Office after ten (10) days from receipt hereof.

SO ORDERED.

The Order was appealed to the Secretary of Labor and Employment, and the case was docketed as OS-MA-A-7-
212-91. On August 15, 1991, the Secretary of Labor and Employment affirmed the Order. Labor Undersecretary
Laguesma held, viz.:

The Code of Ethics being invoked by TUPAS is internal to the Labor Advisory and Consultative
Council (LACC). In other words, it behooves on the signatories to the Code to comply and respect
its provisions. This Office, therefore, can only take cognizance of the Code and recognize its
provisions if the parties thereto fully and mutually respect the same Otherwise, we are left with no
other recourse but to dispose of the instant case on the basis of existing and applicable laws and
rules.

It appears that total reliance on the Code of Ethics is misplaced. It must be pointed out that no
less than the aforequoted provision of the Code of Ethics recognizes the "ultimate authority and
right of the local unions to decide for themselves during the freedom period." Necessarily, the
Code of Ethics itself does not sanction any act that would curtail the right of the workers to
institute petitions for certification election during the freedom period, as in the case at bar.

The emphasis given by the Code of Ethics on the right of the local unions to decide for
themselves during the freedom period is in accordance with the provision of the Labor Code
which allows another union to question the majority status of the incumbent bargaining agent
within the sixty-day freedom period. This is embodied in Article 256 of the Labor code, as
amended by RA 6715, to wit:

"Art. 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 per cent (25%) of all the employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit."

It being not disputed that the petition of NAFLU is sufficient in form and in substance, a
certification election is indeed warranted. 4

44
On October 7, 1991, respondent undersecretary denied petitioner’s motion for reconsideration.

On October 27, 1991, a certification election was conducted among the rank-and-file workers of PDIC at Iba,
Meycauayan, Bulacan. One hundred eighteen (118) of the one hundred thirty-six (136) qualified voters
participated in the elections. Petitioner garnered six (6) votes, while private respondent got one hundred twelve
(112). On November 5, 1991, Med-Arbiter Antonio R. Cortez issued an Order certifying private respondent as the
sole and exclusive bargaining agent of all rank-and-file workers of PDIC. 5

Thus, on November 6, 1991, petitioners filed this original action for Certiorari and Mandamus with Prayer for the
Issuance of Temporary Restraining Order and/or Preliminary Injunction, "seeking to ANNUL the questioned
Resolution dated August 15, 1991, and the Order dated October 7, 1991." 6

On November 18, 1991, we issued a temporary restraining order enjoining respondents from enforcing the
impugned Resolution and Order.

We find no merit in the petition.

Public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction in
affirming the Med-Arbiter’s Order, dated June 3, 1991. The order for the holding of a certification election among
the rank-and-file employees of PDIC finds legal warrant in Art. 256 of the amended Labor Code, as earlier
quoted. Under said provision, the Med-Arbiter shall automatically order a certification election by secret ballot in
an organized establishment such as PDIC, provided the following requisites are met: (1) that a petition
questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the sixty-day
freedom period; (2) that such petition is verified; and (3) that the petition is supported by the written consent of at
least twenty-five (25%) per cent of all employees in the bargaining unit. It is undisputed that all these
requirements were met by private respondent NAFLU in its petition before the DOLE Regional Office No. 3, in
San Fernando, Pampanga. Thus, Med-Arbiter Cortez, acting in accordance with Art. 256 of the Labor Code, as
amended, had no recourse but to automaticallyorder the holding of a certification election at PDIC.

It bears stressing that no obstacle must be placed to the holding of certification elections, 7 for it is a statutory
policy that should not be circumvented. 8 We have held that whenever there is doubt as to whether a particular
union represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding of
a certification election is the most democratic method of determining the employees’ choice of their bargaining
representative. It is the appropriate means whereby controversies and disputes on representation may be laid to
rest, by the unequivocal vote of the employees themselves. 9 Indeed, it is the keystone of industrial democracy.

Art. 256 of the Labor Code cannot be supplanted by the Code of Ethics of the LACC. Said Code cannot amend
or repeal a law. And, as correctly observed by the Office of the Solicitor General, it merely provides for a
voluntary mechanism to settle intra-union disputes. It only applies when both parties to the dispute seek the
mediation of said Committee. However, when one of the parties decides to avail of the remedy provided for
under Art. 256 of our Labor Code and files the proper petition with the DOLE, jurisdiction over the dispute is
exclusively acquired by and cannot be wrenched away from the Med-Arbiter. It is familiar learning that jurisdiction
is vested by law, and not by agreement between or among the parties. Moreover, labor disputes involve public
interest, and hence any private agreement on their settlement cannot prevail over what is provided for by our
laws.

The court also recognizes the fact that the certification election sought to be stopped by petitioner is now fait
accompli, and the rank-and-file employees of PDIC have articulated their choice as to who shall be their
collective bargaining agent in no uncertain terms. In the certification election legally held before we issued our
temporary restraining order in the case, the PDIC workers voted, 112 to 6 (with 18 qualified voters not
participating in the election), to make private respondent their sole and exclusive bargaining agent. This
democratic decision deserves utmost respect, especially since it was not attended by any legal infirmity. Again, it

45
bears stressing that labor legislation seeks in the main to protect the interest of the members of the working
class. It should never be used to subvert their will.

IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. The Resolution dated August 15, 1991, and
the Order dated October 7, 1991 of respondent Department of Labor and Employment Undersecretary
Bienvenido E. Laguesma in OS-MA-A-7-212-91 is hereby AFFIRMED IN TOTO.

SO ORDERED.

46
G.R. No. 97020 June 8, 1992

CALIFORNIA MANUFACTURING CORPORATION, petitioner,


vs.
THE HONORABLE UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA, ABD FEDERATION OF
FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION CHAPTER
(CALMASUCO), respondents.

This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining order
seeking to annul and set aside the (a) resolution * of the Department of Labor and Employment dated October
16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095) entitled "In Re: Petition for Certification Election Among the
Supervisors of California Manufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp.
Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing Corporation, employer-
appellant" which denied herein petitioner's appeal and affirmed the order of Med-Arbiter Arsenia Q. Ocampo
dated August 22, 1990 directing the conduct of a certification election among the supervisory employees of
California Manufacturing Corporation, and (b) the Order ** of the same Department denying petitioner's motion
for reconsideration.

As culled from the records, the following facts appear undisputed:

On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing
Corporation (CMC for brevity) was filed by the Federation of Free Workers (FFW) — California Manufacturing
Corporation Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly registered federation
with registry certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is a duly registered chapter with
registry certificate no. 1-AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC
employs one hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the
company; that the petition is filed in accordance with Article 257 of the Labor Code, as amended by Republic Act
No. 6715; and that the petition is nevertheless supported by a substantial member of signatures of the
employees concerned (Annexes "E" and "F", Ibid., pp. 28-29).

In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a certification
election should be denied as it is not supported by the required twenty-five percent (25%) of all its supervisors
and that a big number of the supposed signatories to the petition are not actually supervisors as they have no
subordinates to supervise, nor do they have the powers and functions which under the law would classify them
as supervisors (Annex "D", Ibid., P. 25).

On July 24. 1990, FFW—CALMASUCO filed its reply maintaining that under the law, when there is no existing
unit yet in a particular bargaining unit at the time a petition for certification election is filed, the 25% rule on the
signatories does not apply; that the "organized establishment" contemplated by law does not refer to a
"company"per se but rather refers to a "bargaining unit" which may be of different classifications in a single
company; that CMC has at least two (2) different bargaining units, namely, the supervisory (unorganized) and the
rank-and-file (organized); that the signatories to the petition have been performing supervisory functions; that
since it is CMC which promoted them to the positions, of supervisors. it is already estopped from claiming that
they are not supervisors; that the said supervisors were excluded from the coverage of the collective bargaining
agreement of its rank-and-file employees; and that the contested signatories are indeed supervisors as shown in
the "CMC Master List of Employees" of January 2, 1990 and the CMS Publication (Annex "G", Ibid., p 30).

On August 12, 1990, the Med-Arbiter issued an order, the decretal portion of which reads:

WHEREFORE, premises considered, it is hereby ordered that a certification election be


conducted among the supervisory employees of California Manufacturing Corporation within
twenty (20) days from receipt hereof with the usual pre-election conference of the parties to

47
thresh out the mechanics of the election The payroll of the company three (3) months prior to the
filing of the petition shall be used as the basis in determining the list of eligible voters.

The choices are:

1. Federation of Free Workers (FFW) California Manufacturing Corporation


Supervisors Union Chapter (CALMASUCO); and

2. No union.

SO ORDERED. (Annex "H" Ibid., p. 33).

CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above order
in its assailed resolution dated October 16, 1990 (Annex, "B", Ibid, a 18) CMC's subsequent motion for
reconsideration was also denied in its order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence, his
petition.

a) whether or not the term "unorganized establishment' in Article 257 of the tabor Code refers to a
bargaining unit or a business establishment;

b) whether or not non-supervisors can participate in a supervisor's certification election; and

c) whether or not the two (2) different and separate plants of herein petitioner in Parañaque and
Las Piñas can be treated as a single bargaining unit.

The petition must be denied.

The Court has already categorically ruled that Article 257 of the Labor code is applicable to unorganized labor
organizations and not to establishments where there exists a certified bargaining agent which had previously
entered into a collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja,
G.R. No. 85085, November 6, 1989, 179 SCRA 127) (Emphasis supplied). Otherwise stated, the establishment
concerned must have no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja G.R. No. 82260,
July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMC which
constitute a bargaining unit separate and distinct from that of the rank-and-file, have no such agent. thus they
correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate
labor organization. CMC's insistence on the 25% subscription requirement, is clearly immaterial. The same has
been expressly deleted by Section 24 of Republic Act No. 6715 and is presently prescribed only in organized
establishments, that is, those with existing bargaining agents. Compliance with the said requirement need not
even be established with absolute certainty. The Court has consistently ruled that "even conceding that the
statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not been strictly
compiled with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the
purpose of ascertaining which of the contending labor organizations shall be the exclusive collective bargaining
agent (Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA
565). The requirement then is relevant only when it becomes mandatory to conduct a certification election. In all
other instances, the discretion, according to the rulings of this Tribunal, ought to be ordinarily exercised in favor
of a petition for certification (National Mines and Allied Workers Union (NAMAWU-UIF) v. Luna, et al., G.R. No.
L-46722, June 15, 1978, 83 SCRA 607).

In any event, CMC as employer has no standing to question a certification election (Asian Design and
Manufacturing Corporation v. Calleja, et al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole
concern of the workers. The only exception is where the employer has to file the petition for certification election
pursuant to Article 259 (now 258) of the Labor Code because it was requested to bargain collectively. Thereafter,
48
the role of the employer in the certification process ceases. The employer becomes merely a bystander. Oft-
quoted is the pronouncement of the Court on management interference in certification elections, thus:

On matters 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 purely internal affair of labor. (Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano. G.R. No. L-61153 January 17, 1983, 120 SCRA
64 citing Consolidated Farms, Inc. v. Noriel, G.R No. L-47752 July 31, 1978, 84 SCRA 469, 473).

PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.SO ORDERED

49
G.R. No. L-24993 December 18, 1968

UNITED RESTAUROR'S EMPLOYEES & LABOR UNION-PAFLU, petitioner,


vs.
HON. GUILLERMO E. TORRES, as Presiding Judge of Branch VIII, Court of First Instance of Rizal, 7th
Judicial District, and the DELTA DEVELOPMENT CORPORATION, respondents.

Certiorari to annul the writ of preliminary injunction issued by the Court of First Instance of Rizal ordering United
Restauror's Employees & Labor Union-PAFLU (Union, for short), its attorneys, representatives, agents and any
person assisting it to "REFRAIN from picketing on the property of plaintiff Delta Development Corporation within
the Makati Commercial Center."

The case arose from a verified complaint for injunction with prayer for preliminary injunction filed by Delta
Development Corporation (Delta), against the Union on January 16, 1965.1 It is there averred that: Delta is the
owner of the Makati Commercial Center situated at Makati, Rizal. It is in the business of leasing portions thereof.
The center has its own thoroughfares, pedestrian lanes, parking areas for the benefit of customers and clients of
its lessees. On the other hand, the Union is an association of some employees of Sulo Restaurant, a lessee of
Delta. On January 8, 1965, the Union sought permission from Delta to conduct picketing activities "on the private
property of plaintiff surrounding Sulo Restaurant." On January 11, Delta denied the request because it "may be
held liable for any incident that may happen in the picket lines, since the picketing would be conducted on the
private property owned by plaintiff." Despite the denial, the Union picketed on Delta's property surrounding Sulo
Restaurant on January 16 and continued to conduct said activity. Such act of the Union is violative of the
property rights of, and would cause great and irreparable injury to, Delta. No employer-employee relationship
exists between Delta and the Union members. Delta then prayed that a writ of preliminary injunction issue and
that, after hearing, such injunction be made permanent.

As aforesaid, respondent judge issued a writ of preliminary injunction. The Union's move to reconsider was
denied on January 26, 1965.

On January 19, 1965, the Union filed a motion to dismiss on the ground, inter alia, that the court had no
jurisdiction to try the case.

Without awaiting resolution of its motion to dismiss the Union commenced in this Court the present original
petition for certiorari on September 18, 1965, claiming that respondent judge acted without or in excess of his
jurisdiction in issuing the injunctive writ "as no restraining order could be validly issued against the right to picket
as part of freedom of speech"; that respondent judge issued the questioned writ "without the benefit of a previous
hearing"; that it was issued in violation of Section 9(d) of Republic Act 875; that jurisdiction over the case rests
with the Court of Industrial Relations (CIR) "for the same involves acts of unfair labor practice under Sec. 4(a) of
Republic Act 875 in connection with Sec. 5(a) thereof"; and that there is no appeal nor any plain, speedy and
adequate remedy in the ordinary course of law.

On September 29, 1965, this Court issued a writ of preliminary injunction upon the Union's P1,000.00-bond.

On October 12, 1965, Delta answered. It alleged, amongst others, that respondent judge validly issued the
injunctive writ in question because the same "never enjoined petitioner from picketing against the Sulo-D & E,
Inc. but only from doing their picketing on the private property of respondent who is not in any way privy to the
relationship between Sulo-D & E, Inc. and petitioner"; that Republic Act 875 is not applicable to the case
involving as it does an action to protect Delta's property rights; that it has no labor relation or dispute of any kind
with the Union; and that the injunctive writ was issued after due hearing on January 19, 1965. Delta asked that
the present petition be denied.

50
After the submission of the parties' memoranda in lieu of oral argument, Delta moved to dismiss the proceeding
at bar on the ground that it has become moot and academic. It averred that the Union lost in the consent election
conducted by the Department of Labor on October 4, 1965 in CIR Cases 1455-MC and 1464-MC, and thereby
also lost its right to picket; and that in said election cases, a rival union — Sulo Employees Labor Union (SELU,
for short) was — certified by CIR as the exclusive bargaining representative of all the employees of Sulo
Restaurant pursuant to CIR's order of December 23, 1965.

The Union opposed. It argued that the picketing was conducted on or about January 16, 1965, that is, around 8
months before the consent election on October 4, 1965; and that the issues that triggered the Union's labor strike
of January 16, 1965 are entirely distinct and foreign to the issues in Cases 1455-MC and 1464-MC.

The petition must be dismissed. Really, the case before us has become moot and academic.

When the Union struck and picketed on January 16, 1965, it might have been true that the Union commanded a
majority of Sulo's employees. Without need of certification, it could, under such circumstances, conclude a
collective bargaining agreement with Sulo.2 But it is not disputed that on October 4, 1965, i.e., shortly after this
case was filed on September 18, 1965, a consent election was held. Not controverted, too, is the fact that, in that
consent election, SELU defeated the Union, petitioner herein. Because of this, SELU was certified to the Sulo
management as the "collective bargaining representative of the employees ... for collective bargaining purposes
as regards wages, hours of work, rates of pay and/or such other terms and conditions of employment allowed
them by law."3

The consent election, it should be noted, was ordered by CIR pursuant to the Union's petition for direct
certification docketed as Case 1455-MC and a similar petition for certification filed by SELU docketed as Case
1464-MC. Verily, the Union can no longer demand collective bargaining. For, it became the minority union. As
matters stand, said right properly belongs to SELU, which commands the majority. By law, the right to be the
exclusive representative of all the employees in an appropriate collective bargaining unit is vested in the labor
union "designated or selected" for such purpose "by the majority of the employees" in the unit concerned. 4 SELU
has the right as well as the obligation to hear, voice out and seek remedies for the grievances of all Sulo
employees, including employees who are members of petitioner Union, regarding the "rates of pay, wages, hours
of employment, or other conditions of employment."

Indeed, petitioner Union's concerted activities designed to be recognized as the exclusive bargaining agent of
Sulo employees must come to a halt.5 Collective bargaining cannot be the appropriate objective of petitioning
Union's continuation of their concerted activities. The record before us does not reveal any other legitimate
purpose. To allow said Union to continue picketing for the purpose of drawing the employer to the collective
bargaining table would obviously be to disregard the results of the consent election. To further permit the Union's
picketing activities would be to flaunt at the will of the majority.

The outcome of a consent election cannot be rendered meaningless by a minority group of employees who had
themselves invoked the procedure to settle the dispute. Those who voted in the consent election against the
labor union that was eventually certified are hidebound to the results thereof. Logic is with this view. By their very
act of participating in the election, they are deemed to have acquiesced to whatever is the consequence of the
election. As to those who did not participate in the election, the accepted theory is that they "are presumed to
assent to the expressed will of the majority of those voting."6

Adherence to the methods laid down by statute for the settlement of industrial strife is one way of achieving
industrial peace; one such method is certification election.7 It is the intent and purpose of the law that this
procedure, when adopted and availed of by parties to labor controversies, should end industrial disputes, not
continue them.8 Pertinent is the following observation to which we fully concur: "Before an election is held by the
Board9 to determine which of two rival unions represents a majority of the employees, one of the unions may call
a strike and demand that the employer bargain with it. A labor dispute will then exist. Nothing in the statute
makes it illegal for a minority to strike and thereby seek to obtain sufficient strength so as to become the sole
51
bargaining agent. But after the Board certifies the bargaining representative, a strike by a minority union to
compel an employer to bargain with it is unlawful. No labor dispute can exist between a minority union and an
employer in such a case."10

Upon the law then, the Union's right to strike and consequently to picket ceased by its defeat in the consent
election. That election occurred during the pendency before this Court of this original petition for certiorari lodged
by the Union the thrust of which is to challenge the power of the Court of First Instance to enjoin its picketing
activities. The Union may not continue to picket. The object of the case before us is lost.

WE, ACCORDINGLY, vote to dismiss the petition for certiorari as moot and academic, and to dissolve the writ of
preliminary injunction we heretofore issued herein, for being functus oficio.

No costs. So ordered.

52
G.R. No. L-56902 September 21, 1982

CONFEDERATION OF CITIZENS LABOR UNIONS (CCLU) and REDSON EMPLOYEES AND LABORERS
ASSOCIATION, petitioners,
vs.
Hon. CARMELO C. NORIEL, Officer-in-Charge of the Bureau of Labor Relations, MARGARITA C.
ENRIQUEZ, Election Supervisor of the Ministry of Labor and Employment, ASSOCIATED LABOR UNIONS
(ALU) and REDSON TEXTILE MANUFACTURING CORPORATION, respondents.

These special civil actions of certiorari and prohibition deal with the alleged irregular holding of a certification
election.

Petitioner Confederation of Labor Unions (CCLU) was one of the four unions wanting to be certified as the
collective bargaining representative of the employees in the Redson Textile Manufacturing Corporation with
place of business at Brixton Hill Street, Capitolyo, Pasig, Metro Manila. Its co-petitioner, the Redson Employees
and Laborers Association, is a CCLU local in the said corporation.

The other unions aspiring to become the collective bargaining representative were the National Union of
Garments Textile and General Workers of the Philippines (GATCORD) the National Trade Union (NATU) and the
Associated Labor Unions (ALU).

On August 7, 1980, a certification election was held in the premises of the corporation from eight-twenty in the
morning to five-thirty in the afternoon. Out of the 831 votes cast, CCLU garnered 356 votes; ALU 338 votes;
NATU, 82 votes and GATCORD 42 votes. Eight votes were spoiled and five votes were challenged or
segregated.

As no union obtained a majority vote, CCLU and ALU, which had the two largest number of votes, agreed in a
pre-election conference on September 2, 1980 that a run-off election would be held on November 6, 1980 from
six o'clock in the morning to six o'clock in the evening. CCLU requested that the certification election be
conducted for two days but ALU objected to that request.

On November 6, 1980, Margarita C. Enriquez, Reynaldo F. de Luna and one Francisco, three election
supervisors from the Ministry of Labor and Employment, arrived at around seven o'clock in the morning near the
Redson Textile compound but they were not allowed by the security guard to enter the company premises in
spite of the heavy rain. So, after consulting through the phone with their chief, a certain Attorney Padilla. the said
election supervisors decided to hold the certification election "outside the premises of the company in a small
store outside of the annex building" (Annex C, Rollo, p. 27). They used as ballot box "an improvised carton box."
The union representatives did not object to the improvised polling place and ballot box.

Voting started at eleven o'clock. During the election and just before it was closed at six-thirty in the evening, the
ALU representative, Sebastian P. Taneo, executed a written protest or manifestation, alleging that the
management of Redson Textile did not allow the run-off election to be held within its premises; that the company
prevented fifty percent of the workers from voting by not allowing them to get out of the company premises and
inducing them to work overtime; that its security guards "manhandled" the ALU vice-president and that their
"active intervention" caused "chaos and confusion" for around thirty minutes; that the company refused to furnish
election paraphernalia like the polling place and the ballot box and that the election supervisors declared the
election closed in spite of ALU's objection.

Taneo prayed that the votes should not be counted, that another day be scheduled for the continuation of the
election and that the company be ordered to allow its workers to vote (Rollo pp. 29-35).

53
At around seven-thirty in the evening, the votes cast were canvassed. Of the 692 votes cast, ALU got 366 votes
as against CCLU's 313 votes, or a margin of 53 votes. There were 1,010 voters. Because ALU won, its
representative, Taneo, withdrew his protest or manifestation by writing on the minutes of the proceeding that his
protest or manifestation was withdrawn "before the close of the proceedings". On the other hand, the CCLU
representatives refused to sign the minutes of the election.

On the following day, November 7, CCLU through its representative, Juan L. Fresnoza filed with the Bureau of
Labor Relations a protest wherein he prayed that the November 6 certification election as well as the
"continuation of the election" on November 7 be annulled.

Fresnoza alleged that the previous day's certification election was irregular and disorderly because (a) no booths
were provided for by the company; (b) the election started much later than the hour agreed upon by the parties,
and (c) ALU distributed white T-shirts printed with "ALU TAYO", gave free tricycle rides to ALU voters and hired
around fifteen husky men and around twenty-five women who "forced" voters to vote for ALU.

According to Fresnoza, when he and Oscar Sanchez, the acting president of Redson Employees and Laborers
Association (RELA-CCLU), protested against those activities before election supervisor Margarita C, Enriquez,
the latter allegedly retorted, "Wala akong magagawa, magagalit na naman si Mr. Taneo" (,Rollo, pp. 36-37).

On November 10, 1980, Fresnoza and Sanchez filed with the Bureau of labor Relations a joint affidavit attesting
to what transpired during the certification election as alleged in the aforesaid protest and added therein that when
they protested before the election supervisors, the latter told them to "place their protest in writing so that they
(supervisors) could consolidate the protests in their election report" (Rollo, pp. 38-39).

On February 19, 1981, CCLU informed the Bureau of Labor Relations that the election was conducted without
regard to the provisions of section 6, Rule VI, Book V of the Rules and Regulations Implementing the Labor
Code.

Carmelo C. Noriel, Officer-in-Charge of the Bureau of Labor Relations, in his resolution of February 26, 1981,
dismissed CCLU's protest for lack of merit. He observed that CCLU failed to submit the pleadings and evidences
required in the hearing on January 19, 1981 and that CCLU failed to file a protest either "before or during the
election proceeding" and, therefore, pursuant to section 3, Rule VI, Book V of the aforementioned rules, CCLU is
deemed to have waived its right to protest.

Noriel in his resolution of March 26, 1981, denying CCLU's motion for reconsideration, certified ALU as the
exclusive bargaining representative of the employees in Redson Textile Manufacturing Corporation.

On June 6, 1981 CCLU and RELA-CCLU filed the instant petition for certiorari and prohibition to annul the
certification election. They complained that the certification election was conducted in violation of the following
provisions of Rule VI, Book V of the Rules and Regulations Implementing the Labor Code:

SEC. 6. Duties of representation officer.— Before the actual voting commences the
representation officer shall inspect the polling place, the ballot boxes, and the polling booths to
insure secrecy of balloting. The parties shall be given opportunity to witness the inspection
proceedings. After the examination of the ballot box, the representation officer shall lock it with
three keys one of which he shall keep and the rest forthwith given one each to the employer's
representative and the representative of the labor organization. If more than one union is
involved, the holder of the third shall be determined by drawing of lots. The key shall remain in
the possession of the representation officer and the parties during the entire proceedings and
thereafter until all the controversies concerning the conduct of the election shall have been
definitely resolved.

54
The Solicitor General in his comment contends that the certification election should be upheld because CCLU, by
not filing a protest with the election supervisor before the close of the election proceeding, waived its right to
protest (Sec. 3, Rule VI, Book V of Implementing Rules and Regulations).

We hold that the certification election is invalid because of certain irregularities such as that (1) the workers on
the night shift (ten p.m. to six a.m.) and some of those in the afternoon shift were not able to vote, so much so
that out of 1,010 voters only 692 voted and about 318 failed to vote (p. 88, Rollo); (2) the secrecy of the ballot
was not safeguarded; (3) the election supervisors were remiss in their duties and were apparently "intimidated"
by a union representative and (4) the participating unions were overzealous in wooing the employees to vote in
their favor by resorting to such tactics as giving free tricycle rides and T-shirts.

The purpose of a certification election is to give the employees "true representation in their collective bargaining
with an employer" (51 C.J.S. 969). That purpose was not achieved in the run-off election because many
employees or union members were not able to vote and the employer, through apathy or deliberate intent, did
not render assistance in the holding of the election.

It should be noted that ALU's written protest (later withdrawn) was based on the same grounds invoked by CCLU
in its protest. That fact alone should have alerted Noriel to disregard the technicality that CCLU's protest was not
filed on time.

WHEREFORE, the resolutions of the Officer-in-Charge of the Bureau of Labor Relations dated February 26 and
March 19, 1981 are hereby set aside. Another run-off certification election should be conducted inside the
premises of Redson Textile Manufacturing Corporation. The management is ordered to allow all its employees to
participate in the certification election and to assist in the holding of an orderly election. The election supervisors
or representation officers are also enjoined to fulfill their duties under the Labor Code and the rules and
regulations implementing the same.

SO ORDERED

55
G.R. No. 104556 March 19, 1998

NATIONAL FEDERATION OF LABOR (NFL), petitioner,


vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC.,
(HPI), respondents.

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the
Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20,
1989. Protests filed by the company and three other unions against the results of the election were denied by the
Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company
(HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE
subsequently denied petitioner NFL's motion for reconsideration.

The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August
29, 1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be
conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated
February 14, 1991 dismissing the election protests of private respondent and the unions.

The facts of the case are as follows:

On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company
intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification
election and ordered a new one to be held.

The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City
with the following results:

Total Votes cast 1,012

Associated Trade Unions (ATU) 39

RUST KILUSAN 5

National Federation of Labor (NFL) 876

Southern Philippines Federation of Labor 4

SANDIGAN 6

UFW 15

No Union 55

Invalid 13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General
Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of
the results of the certification election on the ground that it was conducted despite the pendency of the appeals
filed by Hijo Labor Union and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their
motion for intervention. On the other hand, HPI claimed that it was not informed or properly represented at the
pre-election conference. It alleged that, if it was represented at all in the pre-election conference, its
56
representative acted beyond his authority and without its knowledge. Private respondent also alleged that the
certification election was marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913,
representing 54% of the rank-and-file workers of private respondent, were not able to vote, resulting in a failure
of election.

On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to
investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification
election.

In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of
confusion caused by the announcement of the company that the election had been postponed in view of the
appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition,
the election was held on a Sunday which was non-working day in the company.

2. There were irregularities committed in the conduct of the election. It was possible that some people could have
voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the
ballot had been violated. Management representatives were not around to identify the workers.

3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page
listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled
(indicating that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but
according to the representation officer the total votes cast in the election was 1,012.

Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote
and who were surprised to know that their names had been checked to indicate that they had voted.

But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the
investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-
Arbiter was directed by the Labor Secretary to hear interested parties.

The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the
results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's
appeal, adopting as its own the documentary evidence presented by the company, showing fraud in the election
of August 20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal
personality to file an appeal because it was not a party to the election but was only a bystander which did not
even extend assistance in the election. Petitioner denied that private respondent HPI was not represented in the
pre-election conference, because the truth was that a certain Bartolo was present on behalf of the management
and he in fact furnished the DOLE copies of the list of employees, and posted in the company premises notices
of the certification election.

Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692
qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting
to all kinds of manipulation to frustrate the election and make the "Non Union" win.

In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With
respect to claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo
Labor Union from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1

. . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo
Labor Union filed a motion for interventions. The same was however, denied for being filed
57
unseasonably, and as a result it was not included as one of the choices in the said election. After it has
been so disqualified thru an order which has become final and executory, ALU filed a second motion for
intervention when a second balloting was ordered conducted. Clearly, said second motion is proforma
and intended to delay the proceedings. Being so, its appeal from the order of denial did not stay the
election and the Med-Arbiter was correct and did not violate any rule when he proceeded with the
election even with the appeal. In fact, the Med-Arbiter need not rule on the motion as it has already been
disposed of with finality.

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election
on September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for
intervention filed before the conduct of a second balloting where the choices has already been pre-
determined.

Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid
orders that have become final and executory even before the first certification election was conducted.
Consequently, they may not be allowed to disrupt the proceeding through the filing of nuisance motions.
Much less are they possessed of the legal standing to question the results of the second election
considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive
fraud and irregularities. Although affidavits were submitted showing that the election was held outside the
company premises and private vehicles were used as makeshift precincts, the DOLE found that this was
because respondent company did not allow the use of its premises for the purpose of holding the election,
company guards were allegedly instructed not to allow parties, voters and DOLE representation officers to enter
the company premises, and notice was posted on the door of the company that the election had been postponed.

Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because
the NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding
and, second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of
the interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the
persons investigated, the questions asked and the answers given. The DOLE held that the report was "totally
baseless."

The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive
bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed
during the election, the contending unions should have been the first to complain considering that they are the
ones which have interest that should be protected." 2

Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN,
HLU and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the
rank-and-file employees of private respondent HPI.

However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14,
1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December
26, 1991. Petitioner's second motion for reconsideration was likewise denied in another order dated February 17,
1992. Hence, this petition.

First. Petitioner contends that certification election is the sole concern of the employees and the employer is a
mere bystander. The only instance wherein the employer may actively participate is when it files a petition for
certification election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner
says that this is not the case here and so the DOLE should not have given due course to private respondent's
petition for annulment of the results of the certification election.
58
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because
"workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively
expressing their wish to have a new certification election conducted" and that as a result "the firm position we
held regarding the integrity of the electoral exercise had been somewhat eroded by this recent declaration of the
workers, now speaking in their sovereign capacity."

It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition
of the employer but the letter-appeals that the employees sent to his office denouncing the irregularities
committed during the August 20, 1989 certification election. The petition of private respondent was simply the
occasion for the employees to voice their protests against the election. Private respondent HPI attached to its
Supplemental Appeal filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who
claimed that they had been disfranchised, as a result of which they were not able to cast their votes at the August
20, 1989 election. It was the protests of employees which moved the DOLE to reconsider its previous resolution
of February 14, 1991, upholding the election.

Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and
industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of
the certification election for the purpose of influencing its outcome. But certainly an employer has an abiding
interest in seeing to it that the election is clean, peaceful, orderly and credible.

Second. The petitioner argues that any protest concerning the election should be registered and entered into the
minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by
filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an
appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of
the Implementing Rules and Regulations of the Labor Code:

Sec. 3. Representation officer may rule on any on-the-spot question. — The Representation officer may
rule on any on-the-spot question arising from the conduct of the election. The interested party may
however, file a protest with the representation officer before the close of the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the
proceedings.

Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before the
med-arbiter within five (5) days after the close of the election proceedings, the med-arbiter shall decide
the same within twenty (20) working days from the date of its formalization. If not formalized within the
prescribed period, the protest shall be deemed dropped. The decision may be appealed to the Bureau in
the same manner and on the same grounds as provided under Rule V.

In this case, petitioner maintains that private respondent did not make any protest regarding the alleged
irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions
for reconsideration of private respondent HPI should have been dismissed summarily.

The complaint in this case was that a number of employees were not able to cast their votes because they were
not properly notified of the date. They could not therefore have filed their protests within five (5) days. At all
events, the Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality
which should not be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures,
Inc. v. Phil. Musicians Guild, 4 it is essential that the employees must be accorded an opportunity to freely and
intelligently determine which labor organization shall act in their behalf. The workers in this case were denied this
opportunity. Not only were a substantial number of them disfranchised, there were, in addition, allegations of
fraud and other irregularities which put in question the integrity of the election. Workers wrote letters and made

59
complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these
allegations found the allegations of fraud and irregularities to be true.

In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in
the voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in
both the Constitution and Labor Code would be rendered nugatory if their right to choose their collective
bargaining representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification
election as the most conclusive way of choosing the labor organization to represent workers in a collective
bargaining unit. 6 In case of doubt, the doubt should be resolved in favor of the holding of a certification election.

Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of
Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct
of the election and they are now estopped from questioning the election.

In its comment, ATU-TUCP states,

. . . The representative of the Association of Trade Unions really attest to the fact that we cannot really
identify all the voters who voted on that election except some workers who were our supporters in the
absence of Hijo Plantation representatives. We also attest that the polling precinct were not conducive to
secrecy of the voters since it was conducted outside of the Company premises. The precincts were (sic)
the election was held were located in a passenger waiting shed infront of the canteen across the road; on
the yellow pick-up; at the back of a car; a waiting shed near the Guard House and a waiting shed infront
of the Guard House across the road. Herein private respondents also observed during the election that
there were voters who dictated some voters the phrase "number 3" to those who were casting their votes
and those who were about to vote. Number 3 refers to the National Federation of Labor in the official
ballot.

ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the
conduct of the election would file their protest since it was in their interests that they do so.

Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear
the same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of
intelligent acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals
were obtained through duress by the company.

We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989,
employees already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General
says in his Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and
Annexes "DD" to "DD-33" to private respondent's Supplemental Petition of September 5, 1989 — just 16 days
after the August 20, 1989 election. It is not true therefore that the employees slept on their rights.

As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were
prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is
plain speculation which petitioner has not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.

The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier
letters 9 of the workers already gave details of what they had witnessed during the election, namely the open
balloting (with no secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea
of the irregularities of the certification election. Similarly, the letters containing the signatures of those who were

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not able to vote are sufficient. They indicate that the writers were not able to vote because they thought the
election had been postponed, especially given the fact that the two unions had pending appeals at the time from
orders denying them the right to intervene in the election.

WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.

SO ORDERED.

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