Progresibong Samahan ng Manggagawa sa ITM, et al v Sec.

of Labor and Imperial national interest, the Secretary of Labor properly and lawfully upheld their
Textile Mills/1990 separation from the service and their exclusion from the return-to-work
FACTS: order. There was no grave abuse of discretion on the part of the Labor
 Sept. 1989 – PSM-ITM filed a Notice of Strike against Imperial Textile Mills, Secretary, as declared by the SC.
citing as grounds: violation of the CBA, dismissal of active union members;
indefinite forced leave; non-remittance of SSS premium and amortizations.
Conciliation efforts were futile and a few days after, the union staged a
mass protest which lasted for several hours.
 One week after, ITM filed a petition before the Regional Arbitration Branch
to declare the mass protest illegal.
 Oct. 1989 – union amended its notice of strike and alleged other issues.
Subsequently, they staged a strike, held picket lines and prevented
company vehicles and non-union employees from going in and out of the
company premises.
 Nov. 1989 – NLRC issued TRO enjoining the union from picketing and
blocking the egress/ingress to the company site; union, however, continued
with the picket.
 Eventually, the Labor Arbiter – acting on the earlier petition to have the
mass protest declared illegal – did so and ruled that the individual
petitioners herein who led that strike were deemed to have lost their
employment status.
 Jan. 22, 1990 – union lifted its picket lines.
 Jan. 26, 1990 – Sec. of Labor issued an order (prescinding from the Labor
Arbiter’s ruling) which noted that ITM being engaged in an undertaking
affected with public interest (since it is one of the country’s largest
manufacturers and exporters of garments), prolonged work stoppage
thereat has an adverse effect on the nation’s economy. Labor Sec thus
certified the labor dispute to the NLRC for compulsory arbitration. Further,
the workers were ordered to return to work within 24 hours. The six
individual petitioners deemed terminated under the LA’s decision were
unable to return to work and filed the present petition for certiorari.
ISSUE: WON the separation from service of the six is valid. Yes.
HELD/RATIO:
 Although the declaration that the mass protest earlier held was illegal was
appealed by the petitioners, supervening events transpired which calls for
an affirmation of the termination of the six; i.e., despite the restraining
order of the NLRC, the operations of ITM were obstructed by the picketers;
the country was then in a state of national emergency in view of the
aborted December 1, 1989 coup d’ etat and the prolonged work stoppage
at ITM cost a heavy toll on the economy.
 Such mass protest could not have materialized without the leadership of
the individual petitioners herein. For those acts which were inimical to the
1
G.R. Nos. 164302-03 January 24, 2007
SANTA ROSA COCA-COLA PLANT EMPLOYEES UNION, DONRICO V. SEBASTIAN,
EULOGIO G. BATINO, SAMUEL A. ATANQUE, MANOLO C. ZABALJAUREGUI,
DIONISIO TENORIO, EDWIN P. RELLORES, LUIS B. NATIVIDAD, MYRNA PETINGCO,
FELICIANO TOLENTINO, RODOLFO A. AMANTE, JR., CIPRIANO C. BELLO, RONALDO
T. ESPINO, EFREN GALAN, and JUN CARMELITO SANTOS, Petitioners, vs. COCA-
COLA BOTTLERS PHILS., INC., Respondent.
Facts:
The Sta. Rosa Coca-Cola Plant Employees Union (Union) is the sole and exclusive
bargaining representative of the regular daily paid workers and the monthly paid
non-commission-earning employees of the Coca-Cola Bottlers Philippines, Inc.
(Company) in its Sta. Rosa, Laguna plant.
Upon the expiration of the CBA, the Union informed the Company of its desire to
renegotiate its terms. The CBA meetings commenced on July 26, 1999, where the
Union and the Company discussed the ground rules of the negotiations. The Union
insisted that representatives from the Alyansa ng mga Unyon sa Coca-Cola be
allowed to sit down as observers in the CBA meetings. The Union officers and
members also insisted that their wages be based
on their work shift rates. For its part, the Company was of the view that the
members of the Alyansa were not members of the bargaining unit. The Alyansa was
a mere aggregate of employees of the Company in its various plants; and is not a
registered labor organization. Thus, an impasse ensued.
On August 30, 1999, the Union, its officers, directors and six shop stewards filed a
“Notice of Strike” with the NCMB. The Company filed a Motion to Dismiss alleging
that the reasons cited by the Union were not valid grounds for a strike. The Union
then filed an Amended Notice of Strike.
Meanwhile, the Union decided to participate in a mass action organized by the
Alyansa in front of the Company’s premises. 106 Union members, officers and
members of the BoD, and shop stewards, individually filed applications for leave of
absence for September 21, 1999. Certain that its operations in the plant would
come to a complete stop since there were no sufficient trained contractual
employees who would take over, the Company disapproved all leave applications
and notified the applicants accordingly. A day before the mass action, some Union
members wore gears, red tag cloths stating "YES KAMI SA STRIKE" as headgears and
on the different parts of their uniform, shoulders and chests.
The Office of the Mayor issued a permit to the Union, allowing it "to conduct a mass
protest action within the perimeter of the Coca-Cola plant on September 21, 1999
from 9:00 a.m. to 12:00 noon." Thus, the Union officers and members held a picket
along the front perimeter of the plant on September 21, 1999. All of the 14
personnel of the Engineering Section of the Company did not report for work, and
71 production personnel were also absent. As a result, only one of the three bottling
lines operated during the day shift. All the three lines were operated during the
2
night shift with cumulative downtime of five (5) hours due to lack of manning,
complement and skills requirement. The volume of production for the day was short
by 60,000 physical cases versus budget.
On October 13, 1999, the Company filed a “Petition to Declare Strike Illegal”.
The NCMB recommended that the Notice of Strike of the Union be converted into a
preventive mediation case. After conciliation proceedings failed, the parties were
required to submit their respective position papers. LA declared the strike illegal.
NLRC affirmed LA. CA dismissed petition.
Issues:
1. W/N the strike, dubbed by petitioner as picketing, is illegal. YES
2. W/N the individual officers and shop stewards of petitioner Union should
be dismissed from their employment. YES
Ratio:
1. Article 212(o) of the Labor Code defines strike as a temporary stoppage of work
by the concerted action of employees as a result of an industrial or labor
dispute. In Bangalisan v. CA, the Court ruled that “the fact that the conventional
term ‘strike’ was not used by the striking employees to describe their common
course of action is inconsequential, since the substance of the situation, and
not its appearance, will be deemed to be controlling.”
Picketing involves merely the marching to and fro at the premises of the
employer, usually accompanied by the display of placards and other signs
making known the facts involved in a labor dispute. As applied to a labor
dispute, to picket means the stationing of one or more persons to observe and
attempt to observe. The purpose of pickets is said to be a means of peaceable
persuasion.
The basic elements of a strike are present in this case. They marched to and fro
in front of the company’s premises during working hours. Thus, petitioners
engaged in a concerted activity which already affected the company’s
operations. The mass concerted activity constituted a strike.
For a strike to be valid, the following procedural requisites provided by Art 263
of the Labor Code must be observed: (a) a notice of strike filed with the DOLE
30 days before the intended date thereof, or 15 days in case of unfair labor
practice; (b) strike vote approved by a majority of the total union membership
in the bargaining unit concerned obtained by secret ballot in a meeting called
for that purpose, (c) notice given to the DOLE of the results of the voting at
least seven days before the intended strike. These requirements are mandatory
and the failure of a union to comply therewith renders the strike illegal. It is
clear in this case that petitioners totally ignored the statutory requirements and
embarked on their illegal strike.
2. The law makes a distinction between union members and union officers. A
worker merely participating in an illegal strike may not be terminated from
employment. It is only when he commits illegal acts during a strike that he may
 be declared to have lost employment status. For knowingly participating in an
illegal strike or participates in the commission of illegal acts during a strike, the
law provides that a union officer may be terminated from employment.
Union officers are duty-bound to guide their members to respect the law. If
instead of doing so, the officers urge the members to violate the law and defy
the duly constituted authorities, their dismissal from the service is just penalty
or sanction for their unlawful acts. The officers’ responsibility is greater than
that of the members.
Here, the law required respondents to follow a set of mandatory procedures
before they could go on with their strike. But obviously, rather than call on their
members to comply therewith, respondents were the first ones to violate the
same.
Finally, the contention of petitioners who were appointed as shop stewards of
the Union that they were mere members and not the officers of petitioner
Union is barren of merit.
We agree with the observation of respondent that under Section 501(a) and (b)
of the Landrum Griffin Act of 1959, shop stewards are officers of the Union:
Sec. 501 (a) The officers, agents, shop stewards, and other representatives of a
labor organization occupy positions of trust in relation to such organization and
its members as a group. It is, therefore, the duty of each such person, taking
into account the special problems and functions of a labor organization, to hold
its money and property solely for the benefit of the organization and its
members and to manage, invest, and expend the same in accordance with its
constitution and bylaws and any resolutions of the governing bodies adopted
thereunder, to refrain from dealing with such organization as an adverse party
in any matter connected with his duties and from holding or acquiring any
pecuniary or personal interest which conflicts with the interest of such
organization, and to account to the organization for any profit received by him
in whatever capacity in connection with transactions conducted by him or
under his direction on behalf of the organization. A general exculpatory
resolution of a governing body purporting to relieve any such person of liability
for breach of the duties declared by this section shall be void as against public
policy.
(b) When any officer, agent, shop steward, or representative of any labor
organization is alleged to have violated the duties declared in subsection (a) of
this section and the labor organization or its governing board or officers refuse
3
or fail to sue or recover damages or secure an accounting or other appropriate
relief within a reasonable time after being requested to do so by any member
of the labor organization, such member may sue such officer, agent, shop
steward, or representative in any district court of the United States or in any
State court of competent jurisdiction to recover damages or secure an
accounting or other appropriate relief for the benefit of the labor
organization.49
Under said Act, Section 3(q) thereof provides, as follows:
(q) "Officer, agent, shop steward, or other representative", when used with
respect to a labor organization, includes elected officials and key administrative
personnel, whether elected or appointed (such as business agents, heads of
departments or major units, and organizers who exercise substantial
independent authority), but does not include salaried non-supervisory
professional staff, stenographic, and service personnel.
Admittedly, there is no similar provision in the Labor Code of the Philippines;
nonetheless, petitioners who are shop stewards are considered union officers.
Officers normally mean those who hold defined offices. An officer is any person
occupying a position identified as an office. An office may be provided in the
constitution of a labor union or by the union itself in its CBA with the employer.
An office is a word of familiar usage and should be construed according to the
sense of the thing.
Irrefragably, under its Constitution and By-Laws, petitioner Union has principal
officers and subordinate officers, who are either elected by its members, or
appointed by its president, including the standing committees each to be
headed by a member of the Board of Directors.
A shop steward is appointed by the Union in a shop, department, or plant
serves as representative of the Union, charged with negotiating and adjustment
of grievances of employees with the supervisor of the employer. He is the
representative of the Union members in a building or other workplace. Black’s
Law Dictionary defines a shop steward as a union official who represents
members in a particular department. His duties include the conduct of initial
negotiations for settlement of grievances. He is to help other members when
they have concerns with the employer or other work-related issues. He is the
first person that workers turn to for assistance or information. If someone has a
problem at work, the steward will help them sort it out or, if necessary, help
them file a complaint. In the performance of his duties, he has to take
 cognizance of and resolve, in the first instance, the grievances of the members
of the Union. He is empowered to decide for himself whether the grievance or
complaint of a member of the petitioner Union is valid, and if valid, to resolve
the same with the supervisor failing which, the matter would be elevated to the
Grievance Committee.

In this case, instead of playing the role of "peacemakers" and grievance solvers,
the petitioners-shop stewards participated in the strike. Thus, like the officers
and directors of petitioner Union who joined the strike, petitioners-shop
stewards also deserve the penalty of dismissal from their employment.

4
CONTINENTAL CEMENT CORPORATION LABOR UNION (NLU) petitioner, vs.
CONTINENTAL CEMENT CORPORATION and the DEPUTY MINISTER OF
LABOR, respondents.
Facts:
 NLRC issued an arbitration award resolving certain demands of Petitioner
respecting the working terms and conditions that should be observed in
the establishment of private respondent. However, due to disagreement on
the interpretation of provisions concerning vacation, sick leaves and
standardization of wages, compliance was delayed.
 Petitioner staged a strike. It was lifted after private respondent agreed to
pay the leaves on installment.
 Meanwhile, private respondent sought clarification from the labor arbiter
on whether a group of 91 workers who were unable to complete 300 days
of work within a 12-month period was entitled to proportionate payment
of vacation and sick leave benefits. Labor Arbiter ruled that they should
make proportional payments. Petitioner filed a notice of strike since CCC
refused to pay. They staged the strike and it was settled when CCC paid for
“humanitarian reasons”.
 The promised installment for VL and SL were not paid.
 Petitioner staged a strike in the early of July 12, 1976, picketing the
entrance of the premises of private respondent. There were officers and
members of petitioner identified.
 Minister of Labor issued order for workers to resume work. Nevertheless
only 11 out of 120 reported to work. Picketing was resumed despite the
presence of military personnel who were called to assist in the
implementation of the return-to-work order.
 Minister of Labor certified to NLRC for compulsory arbitration. Private
respondent filed with the Department of Labor reports on the dismissal of
those who failed to comply with the return-to-work order with copies of
the reports furnished workers affected.
 On July 29, 1976, the president of petitioner and 7 other officers requested
admission to work but were informed that their employment had been
terminated by the company.
 NLRC ruled: Union officers and BoD were considered separated. Union
members suspended. CCC pay the SL and VL.
 Petitioner appealed to NLRC but prior decision was affirmed and MR
denied.
ISSUES:
(1) whether or not the strike staged by petitioner on June 12, 1976 until its lifting
was illegal; and
(2) in the affirmative, whether or not the penalties meted out by the NLRC to the
Union officers and the members are warranted by the circumstances and the law.
5
HELD/RATIO:
(1) Strike was illegal.
Private respondent was engaged in the manufacture of cement which is no doubt a
vital industry in which a strike or lockout is prohibited under the foregoing
aforestated decree. And the strike was not in connection with any unresolved
economic issue in collective bargaining which is the only ground for which a lawful
strike can be held. (Sec 7 of PD 823)
The issue between the petitioner and the private respondent at the time of the
strike concerned merely the implementation of an arbitration award of the NLRC.
The petitioner had a remedy by applying for a writ of execution to enforce that
award. Its resort to a strike was without lawful basis.
Petitioner invokes the right to strike as a measure of self-defense as it had been
driven to the wall by the unjust refusal of private respondent to comply with the
NLRC award.
The non-compliance by the private respondent with the said award did not threaten
the existence of petitioner or that of its members. The dispute did not concern the
right of the Union to organize nor the employees' right to work. It merely involved
the non-payment of the vacation and sick leaves of the employees for the past
years' services.
(2) Yes, penalties warranted.
The strikers in question did not only violate the no-strike policy of the state in regard
to vital industries; instead, they repeatedly defied the orders of the Director of
Labor Relations and the Minister of Labor for them to return to work. Their
dismissal was recommended by the labor arbiter. However, out of compassion, the
NLRC and the Minister of Labor only suspended them.
Petitioner then contends that the separation from work of the officers of the union
is quite severe. The officers had the duty to guide their members to respect the law.
Instead, they urged them to violate the law and defy the duly constituted
authorities. Their responsibility is greater than that of the members. Their dismissal
from the service is a just penalty for their unlawful acts.
It is within the power of the NLRC to order the removal of the officers of petitioner.
This is provided for in the labor law.
Art. 242. Rights and conditions of membership in a labor organization. — The
following are the rights and conditions of membership in a labor organization:
(p) It shall be the duty of any labor organization and its officers to inform its
members on provisions of the constitution and by-laws, collective bargaining
agreement, the prevailing labor relations system and all their rights and
obligations under existing labor laws. For this purpose, registered labor
organizations may assess reasonable dues to finance labor relations seminars
and other labor education activities.
The officers of petitioner misinformed the members and led them into staging an
illegal strike. If the NLRC is to attain the objective of the Labor Code to ensure a
stable but dynamic and just industrial peace 6 the removal of undesirable labor
leaders must be effected.
Petition dismissed.

6
G.R. No. 188233 June 29, 2010 modification is meant to correct erroneous conclusions of fact and law. The only
QUERUBIN L. ALBA and RIZALINDA D. DE GUZMAN, Petitioners, vs. ROBERT L. recognized exceptions are the corrections of clerical errors or the making of so-
YUPANGCO, Respondent. called nunc pro tuncentries which cause no prejudice to any party and in cases
where the judgment is void. Said exceptions are not present in the present case.
Facts:
Alba and De Guzman filed separate complaints for illegal dismissal against Y.L. Land
Corporation and Ultra Motors Corporation. Yupangco was impleaded in his capacity
as President of both. In 1999, the labor arbiter ruled in favor of petitioners.

The NLRC denied the appeal for failure to put up a bond. A writ of execution was
then issued. Yupangco questioned the enforcement of the decision of the LA
claiming that the decision does not state that his liability is solidary w/ the 2
corporations. The LA denied his motion to quash hence he appealed to the CA. The
CA ruled in favor of Yupangco.

Issue: W/N Yupangco solidarily liable w/ the 2 corporations

Held / Ratio:
Denied. No, Yupangco is only jointly liable.

There is solidary liability when the obligation expressly so states, when the law so
provides, or when the nature of the obligation so requires.

A corporation may act only through its directors, officers and

employees. Obligations incurred by them, acting as such corporate agents are not
theirs but of the corporation. True solidary liabilities may be incurred but only when
exceptional circumstances warrant:
1. When directors and trustees or, in appropriate cases, the officers of a
corporation:
(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the
corporate affairs;

In labor cases, corporate directors and officers are solidarily liable with the
corporation for the termination of employees done with malice or in bad faith.

From the 1999 Decision of the LA, there is no finding that petitioners’ dismissal was
effected with malice or bad faith. Respondent’s liability could thus only be joint, not
solidary.

By declaring that respondent’s liability is solidary (in the denial of the motion to
quash), the LA modified the already final decision. That is impermissible, even if the
7
GR No. 161690 July 23,2008
S.S. Ventures Int’l v. S.S. Ventures Labor Union
Facts:
SS Ventures is a PEZA-registered export firm located in Mariveles, Bataan. SSVLU is a
labor organization registered with DOLE. On March 21, 2000, the Union filed with
DOLE a petition for certification election in behalf of the rank-and-file employees of
Ventures. 542 signatures were gathered, 82 of which belonged to terminated
employees of Venture.
Ventures filed a petition to cancel the certificate of registration of the Union
because:
1. The Union deliberately and maliciously included the names of more or less
82 former employees no longer connected with Ventures in its list of
members who attended the organizational meeting and in the
adoption/ratification of its constitution and by-laws held on January 9,
2000 in Mariveles, Bataan; and the Union forged the signatures of these 82
former employees to make it appear they took part in the organizational
meeting and adoption and ratification of the constitution;
2. The Union maliciously twice entered the signatures of three persons
namely: Mara Santos, Raymond Balangbang, and Karen Agunos;
3. No organizational meeting and ratification actually took place; and
4. The Union's application for registration was not supported by at least 20%
of the rank-and-file employees of Ventures, or 418 of the total 2,197-
employee complement. Since more or less 82 of the 500 signatures were
forged or invalid, then the remaining valid signatures would only be 418,
which is very much short of the 439 minimum (2197 total employees x 20%
= 439.4) required by the Labor Code.
Union answered the allegations in the following manner:
1. The organizational meeting actually took place on January 9, 2000 at the
Shoe City basketball court in Mariveles;
2. The 82 employees adverted to in Ventures' petition were qualified Union
members for, although they have been ordered dismissed, the one-year
prescriptive period to question their dismissal had not yet lapsed;
3. It had complied with the 20%-member registration requirement since it
had 542 members; and
4. The "double" signatures were inadvertent human error.
The DOLE regional director found for Ventures, however in a subsequent Motion for
Reconsideration, the BLR reversed the DOLE decision. This was affirmed by the CA.
Issue: WON Ventures may have the Union de-certified for violation of Art. 239 (a) of
the Labor Code. NO.
8
Ratio:
The right to form, join, or assist a union is specifically protected by Art. XIII, Section
3of the Constitution and such right shall not be abridged. Once registered with the
DOLE, a union is considered a legitimate labor organization endowed with the right
and privileges granted by law to such organization.
To decertify a union, it is not enough to show that the union includes ineligible
employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the application for
registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of ratification
of the constitution or by-laws, among other documents.
The employees' withdrawal from a labor union made before the filing of the petition
for certification election is presumed voluntary, while withdrawal after the filing of
such petition is considered to be involuntary and does not affect the same.
After a labor organization has filed the necessary registration documents, it
becomes mandatory for the BLR to check if the requirements under Art. 234 of the
Labor Code have been sedulously complied with. If the union's application is
infected by falsification and like serious irregularities, especial those appearing on
the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. The issuance to the Union of
Certificate of necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating irregularities.
The assailed inclusion of the said 82 individuals to the meeting and proceedings
adverted to is not really fatal to the Union's cause for, as determined by the BLR, the
allegations of falsification of signatures or misrepresentation with respect to these
individuals are without basis. The procedure for acquiring or losing union
membership and the determination of who are qualified or disqualified to be
members are matters internal to the union and flow from its right to self-
organization.
The relevancy of the 82 individuals’ active participation in the Union’s organizational
meeting and the signing ceremonies therefore comes in only for purposes of
determining whether or not the Union, even without the 82, would still meet what
Art. 234(c) of the Labor Code requires to be submitted:
Art. 234. Requirements of Registration.—Any applicant labor organization x xx
shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate
of registration based on the following requirements:
x xxx
(c) The names of all its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to operate.
In its union records on file with this Bureau, respondent union submitted the names
of [542] members x xx. This number easily complied with the 20% requirement, be
it 1,928 or 2,202 employees in the establishment. Even subtracting the 82
employees from 542 leaves 460 union members, still within 440 or 20% of the
maximum total of 2,202 rank-and-file employees.
The issue surrounding the involvement of the 82 employees is a matter of
membership or voter eligibility. It is not a ground to cancel union registration.
"[F]or fraud and misrepresentation [to be grounds for] cancellation of union
registration under Article 239 [of the Labor Code], the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a
majority of union members."
The Union points out that for almost seven (7) years following the filing of its
petition, no certification election has yet been conducted among the rank-and-file
employees. If this be the case, the delay has gone far enough and can no longer be
allowed to continue. A certification election is exclusively the concern of employees
and the employer lacks the legal personality to challenge it.

9
UST Faculty Union v. Bitonio employees wish to be represented by a labor organization and, in the
November 16, 1999 affirmative case, by which particular labor organization.

FACTS:  In a certification election, all employees belonging to the appropriate

 Private respondents are duly elected officers of the UST Faculty Union
(USTFU). The union has a subsisting five-year CBA with UST.
 The petitioners on the other hand, questioned before the Med-Arbiter, that
the COMELEC was not constituted in accordance with USTFU’s constitution
and by-laws (CBL) and that no rules had been issued to govern the conduct
of the October 5, 1996 election.
bargaining unit can vote. Therefore, a union member who likewise belongs
to the appropriate bargaining unit is entitled to vote in said election.
However, the reverse is not always true; an employee belonging to the
appropriate bargaining unit but who is not a member of the union cannot
vote in the union election, unless otherwise authorized by the constitution
and by-laws of the union. Verily, union affairs and elections cannot be
decided in a non-union activity.

 Med-Arbiter issued a TRO enjoining the conduct of elections. However, a
general faculty assembly was held as scheduled. The general assembly was
attended by members of the USTFU and, as admitted by the appellants,
also by “non-USTFU members [who] are members in good standing of the
UST Academic Community Collective Bargaining Unit”. On this occasion,
appellants were elected as USTFU’s new set of officers by acclamation and
clapping of hands.
 In both elections, there are procedures to be followed. Thus, the October
4, 1996 election cannot properly be called a union election, because the
procedure laid down in the USTFU’s CBL for the election of officers was
not followed. It could not have been a certification election either, because
representation was not the issue, and the proper procedure for such
election was not followed. The participation of non-union members in the
election aggravated its irregularity.

 On 03 December 1996, appellants and UST allegedly entered into another

CBA covering the period from 01 June 1996 to 31 May 2001. Said CBA was
ratified by a majority of the UST faculty community.

ISSUE: WON the election of the officers was valid.

HOLDING/RATIO:
 NO. The importance of a union’s constitution and bylaws cannot be
overemphasized. They embody a covenant between a union and its
members and constitute the fundamental law governing the members’
rights and obligations. As such, the union’s constitution and by-laws should
be upheld, as long as they are not contrary to law, good morals or public
policy.

 A union election is held pursuant to the union’s constitution and by-laws,

and the right to vote in it is enjoyed only by union members. A union
election should be distinguished from a certification election, which is the
process of determining, through secret ballot, the sole and exclusive
bargaining agent of the employees in the appropriate bargaining unit, for
purposes of collective bargaining. Specifically, the purpose of a
certification election is to ascertain whether or not a majority of the

10
NATIONAL UNION OF BANK EMPLOYEES v. MINISTER OF LABOR
Dec. 14, 1981
FACTS: Petition for Mandamus to compel public respondents (Minister of Labor,
Deputy Minister of Labor, Director of Bureau of Labor Relations) to conduct a
certification election among the rank and file employees of respondent employer
Producers Bank of the Philippines.
Petitioner Union filed a petition to be directly certified as collective bargaining agent
of the rank and file employees of respondent. When required to submit a payroll of
employees, respondent agreed that as soon as the registration certificate of the
local union was issued by the Ministry of labor and that it was shown that the local
union represents the majority of the rank and file, the Bank would recognize said
union and would negotiate accordingly.
The registration certificate was issued, which petitioner submitted together with the
union membership application of 183 members out of 259 rank and file employees
of respondent, authorizing the NUBE to represent them as their sole and exclusive
collective bargaining agent. Respondent, nonetheless, failed to submit the required
payroll and the list of rank and file workers based on said payroll.
Med Arbiter: Ordered the holding of a certification election.
Respondent: Motion to suspend further proceedings in view of a prejudicial issue
consisting of a pending proceeding for cancellation of the registration of petitioner
for allegedly engaging in prohibited and unlawful activities.
Deputy Minister of Labor: Assumed jurisdiction over the certification election case
and the application for clearance to terminate the services of 13 union officers by
respondent. Issued an order directing Chief of the Med-Arbiter Section, Atty. Piezas,
to conduct summary investigations for the purpose of determining the definition of
the appropriate bargaining unit sought to be represented as well as compliacnce
with the 30% mandatory written consent.
Respondent: Pressed for the exclusion of the following personnel from the
bargaining unit: Secretaries, Staff of Personnel Department, Drivers, Telephone
Operators, Accounting Department, Credit Investigators, Collectors, Messengers,
Auditing Department Personnel, Signature Verifiers, Legal Department Personnel,
Loan Security Custodians, and Trust Department Personnel.
Med Arbiter: Ordered the holding of a certification election but sustained the
respondent as to the exclusion of certain employees. Petitioner has substantially
complied with the mandatory and jurisdictional requirement of 30% subscription of
all the employees in the bargaining unit (submission of copies of the application and
membership forms of its members wherein they have duly authorized petitioner as
their sole and exclusive bargaining agent), it appearing that out of the 264 total rank
and file employees, 188 are union members who have authorized petitioner to
represent.
11
Petitioner: Filed a partial appeal to the Director of Bureau of Labor Relations
questioning the exclusions of those employees who are not among those expressly
enumerated under the law to be excluded and urged the holding of certification
elections allowing all those excluded to vote but segregating their votes as
challenged in the meantime.
Respondent: The Minister of Labor, and not the Med-Arbiter, has jurisdiction over
the petition. The order directing the holding of certification election is premature in
view of the fact that petitioner’s union registration was subject of cancellation
proceedings. The bargaining unit was not appropriately defined.
Director of Bureau of Labor Relations: Affirmed Med-Arbiter’s order. Respondent
should not unduly press the jurisdictional issue, as it does not lead nor contribute to
the resolution of the real pressing issue of certification election. What is at stake is
the right of the employees to organize and be represented for collective bargaining
purposes by a union at respondent bank where none existed up to the present time.
The matter of defining the bargaining unit usually presents for determination 3
questions, to wit:
1. the general type of bargaining unit – whether it should be an industrial unit
embracing all the employees in a broad class; or a craft unit that is confined to a
small specialized group within a broad class
2. the scope of the bargaining unit – whether it would embrace all employees in a
given class at only one plant or at several plants of the employer
3. the specific composition of the bargaining unit – whether the unit should include
employees of different occupational groups, like clerks, inspectors, technical
employees, etc.
The petition for certification election, whether filed by a legitimate labor
organization or by an employer in an appropriate case shall contain the description
of the bargaining unit which shall be the employer unit unless circumstances
otherwise require. Thus, the policy under the Labor Code on the matter of fixing the
bargaining unit is to favor larger units, which is sought to be implemented on a 2-
tiered basis. On the lower tier, the law mandates the employer unit as the normal
unit of organization at the company level, thus discouraging fragmentation into
small craft or occupational units. But the Code envisions further consolidation into
larger bargaining units. Thus, on the higher tier, the law mandates the eventual
restructuring of the labor movement along the “one union, one industry” basis.
Applying this rule, the appropriate bargaining unit should embrace all the regular
rank and file employees at the head as well as branch offices of respondent. An
exception is when circumstances otherwise require, which circumstances
respondent has not shown.
The definition of the appropriate unit refers to the grouping or the legal collectivity
of eligible employees for purposes of collective bargaining. The presumption is that
these employees are entitled to rights to self-organization and collective bargaining,
otherwise, they would not be, in the first place, considered at all in the
determination of the appropriate bargaining unit. Therefore, the question of
excluding certain rank and file employees for being allegedly confidential,
managerial or technical does not simply involve a definition of the bargaining unit,
but rather raises the fundamental issue of coverage under or eligibility for the
exercise of the workers’ rights to self-organization and collective bargaining. The
pertinent provisions on coverage and exclusion are Arts. 244 (all persons employed
in commercial, industrial and agricultural enterprises, including religious, charitable,
medical or educational institutions operating for profit shall have the right to self-
organization and to form, join, or assist labor organizations for purposes of collective
bargaining), 245 and 246 (security guards and managerial employees are not eligible
to form, assist or join any labor organization) of the Labor Code. A “managerial
employee” is defined as one who is vested with powers or prerogatives to lay down
and execute management policies, and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered
rank and file employees for purposes of self-organization and collective bargaining.
The Med-Arbiter’s order, insofar as it excludes all managerial and supervisory
employees, etc. should be modified for being either superfluous, discriminatory or
simply contrary to law. Exclusion as managerial employee is not based on the
personality of the occupant but rather on the nature and function of the position.
There was no clear showing that they were managerial employees. The mere fact of
being a supervisor or confidential employee does not exclude him from coverage.
He must strictly come within the category of a managerial employee as defined by
the Code. The Constitution assures to all workers such rights to self-organization and
collective bargaining. Exclusions, being the exception and being in derogation of
such constitutional mandate, should be construed in strictissimi juris.
It is a policy that the exclusion of confidential employees from the bargaining unit is
a matter for negotiation and agreement of the parties. Absent such agreement,
coverage must be observed. In any event, any negotiation and agreement can come
after the representation issue is resolved.
Unless there is an order of cancellation which is final, the union’s certification of
registration remains and its legal personality intact. It is entitled to the rights and
privileges accorded by law.
The rights of workers to self-organization is found in Sec. 7, Art. IV of the 1973
Constitution (the right to form associations or societies for purposes not contrary to
law shall not be abridged) and Sec. 9, Art. II (the State shall assure the rights of
workers to self-organization, collective bargaining, security of tenure and just and
humane conditions of work). A healthy respect for the freedom of association
demands that acts imputable to officers or members be not easily visited with
capital punishments against the association itself.
12
The definition of the appropriate bargaining unit does not call for an actual head
count or identification of the particular employees belonging thereto. That is done
in the pre-election conference. It is sufficient that the bargaining unit is defined such
that the employees who are part thereof may be readily ascertained for purposes of
exclusions and inclusions during the pre-election conference when the list of eligible
voters is determined.
Since 188 of the 264 employees subscribed to the petition, which constitutes 70% of
the total employees in the bargaining unit, the 30% consent requirement has been
more than sufficiently complied with.
ISSUE: Whether a certification election should be held despite the pendency of the
petition to cancel petitioner’s certificate of registration.  YES.
RATIO: The pendency of such proceeding is not a bar to the holding of a certification
election. The pendency of the petition should not suspend the holding of a
certification election because there is no order directing such cancellation. Such
petition was also evidently intended to delay the early disposition of the case for
certification election, considering that it was filed only after the Order directing the
holding of a certification election was issued. Furthermore, the Court observes the
liberal approach as to matters of certification election. The whole democratic
process is geared towards the determination of representation, not only in
government but in other sectors as well, by election. A certification election is
crucial to the institution of collective bargaining, for it gives substance to the
principle of majority rule as one of the basic concepts of a democratic policy.
The institution of collective bargaining is a prime manifestation of industrial
democracy at work. The 2 parties to the relationship, labor and management, make
their own rules by coming to terms. That is to govern themselves in matters that
really count. As labor, however, is composed of a number of individuals, it is
indispensable that they be represented by a labor organization of their choice. It is
the fairest and most effective way of determining which labor organization can truly
represent the working force. The will of the majority, if given expression in an
honest election with freedom on the part of the voters to make their choice, is
controlling. No better device can assure the institution of industrial democracy with
the 2 parties to a business enterprise establishing a regime of self-rule.
Cancellation of the registration certificate is not the only resultant penalty in case of
any violation of the Labor Code. The penalty imposable should be commensurate to
the nature or gravity of the illegal activities conducted and to the number of
members and leaders of the union staging the illegal strike. (The Court cited the
decision of the Director of BLR – see underlined paragraph).
DISPOSITIVE: Writ of mandamus granted.

[G.R. No. 114974. June 16, 2004] CALLEJO, SR., J.:
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner, vs. The
Honorable MA.NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND
EMPLOYMENT;and the STANDARD CHARTERED BANK, respondents.
Syllabus Topic: Worker Right to Self-Organization; ILO
FACTS:
 After several negotiations over their CBA terms and conditions, the parties
couldn’t agree on the economic provisions, except for signing bonus and
uniforms.
 The Union declared a deadlockand filed a Notice of Strike before the National
Conciliation and Mediation Board (NCMB).
 On the other hand, the Bank filed a complaint for ULP and Damages before the
Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila.
 The SOLE Nieves R. Confesorassumed jurisdiction over the labor dispute at the
Bank and consolidated the complaint for ULP filed by the Bank before the NLRC
with the complaint over which the SOLE assumed jurisdiction. After the parties
submitted their respective position papers, the SOLE issued an Order directing the
parties to execute a CBA incorporating the dispositions stated in the Order.The
SOLE dismissed the charges of ULP of both the Union and the Bank, explaining
that both parties failed to substantiate their claims.
 Dissatisfied, both Union and Bank filed a MR but SOLE issued a Resolution denying
the motions. The Union filed a second MR, which was, likewise, denied.
 The Bank and the Union signed the CBA and immediately thereafter, the wage
increase was effected and the signing bonuses based on the increased wage were
distributed to the employees covered by the CBA.
 Afterwards, the Union filed a petition for certiorari under Rule 65 of the Rules of
Procedure:
(1) The Union alleges that the SOLE acted with GAD amounting to lack or excess
of jurisdiction when it found that the Bank did not commit unfair labor
practice when it interfered with the Union’s choice of negotiator.
(2) The Union, likewise, pointed out that the public respondent failed to rule on
the ULP charges arising from the Bank’s surface bargaining.
13
(3) The Union also accused the Bank of refusing to disclose material and
necessary data, even after a request was made by the Union to validate its
“guestimates.”
ISSUE (relevant):
WON the Union was able to substantiate its claim of unfair labor practice against the
Bank arising from the latter’s alleged “interference” with its choice of negotiator;
surface bargaining; making bad faith non-economic proposals; and refusal to furnish
the Union with copies of the relevant data?
HELD:
No. Petition is bereft of merits. Dismissed.
DISCUSSION:
“Interference” under Article248 (a) of the Labor Code(ditopinasokung ILO)
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF
ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the
Philippines is a signatory, “workers and employers, without distinction whatsoever,
shall have the right to establish and, subject only to the rules of the organization
concerned, to job organizations of their own choosing without previous
authorization.” Workers’ and employers’ organizations shall have the right to draw
up their constitutions and rules, to elect their representatives in full freedom to
organize their administration and activities and to formulate their programs.
Article 2 of ILO Convention No. 98 pertaining to the Right to Organize and Collective
Bargaining, provides:
1. Workers’ and employers’ organizations shall enjoy adequate
protection against any acts or interference by each other or each
other’s agents or members in their establishment, functioning or
administration.
2. In particular, acts which are designed to promote the establishment of
workers’ organizations under the domination of employers or
employers’ organizations or to support workers’ organizations by
financial or other means, with the object of placing such organizations
under the control of employers or employers’ organizations within the
meaning of this Article.
The aforcited ILO Conventions are incorporated in our Labor Code, particularly in
Article 243and Articles 248 and 249 respecting ULP of employers and labor
organizations.
Article 248(a) of the Labor Code, considers it an unfair labor practice when an
employer interferes, restrains or coerces employees in the exercise of their right to
self-organization or the right to form association. The right to self-organization
necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or not put “up for grabs” the entire work of the Union and its predecessors. As can be
coerces the Union to exclude from its panel of negotiators a representative of the gleaned from the Bank’s counter-proposal, there were many provisions which it
Union, and if it can be inferred that the employer adopted the said act to yield proposed to be retained. The revisions on the other provisions were made after the
adverse effects on the free exercise to right to self-organization or on the right to parties had come to an agreement. Far from buttressing theUnion’s claim that the
collective bargaining of the employees, ULP under Article 248(a) in connection with Bank made bad-faith proposals on the non-economic provisions, all these, on the
Article 243 of the Labor Code is committed. contrary, disprove such allegations.
In order to show that the employer committed ULP under the Labor Code, The Union also failed to substantiate its claim that the Bank refused to furnish the
substantial evidence is required to support the claim. Substantial evidence has been information it needed.
defined as such relevant evidence as a reasonable mind might accept as adequate While the refusal to furnish requested information is in itself an unfair labor
to support a conclusion. practice, and also supports the inference of surface bargaining,in the case at bar,
In the case at bar, the Union bases its claim of interference on the alleged Umali, in a meeting dated May 18, 1993, requested the Bank to validate
suggestions of Diokno to exclude Umali from the Union’s negotiating panel. its guestimates on the data of the rank and file. However, Umali failed to put his
The circumstances that occurred during the negotiation do not show that the request in writing as provided for in Article 242(c) of the Labor Code.
suggestion made by Diokno to Divinagracia is an anti-union conduct from which it The Union, did not, as the Labor Code requires, send a written request for the
can be inferred that the Bank consciously adopted such act to yield adverse effects issuance of a copy of the data about the Bank’s rank and file employees. Moreover,
on the free exercise of the right to self-organization and collective bargaining of the as alleged by the Union, the fact that the Bank made use of the
employees. The records show that after the initiation of the collective bargaining aforesaid guestimates, amounts to a validation of the data it had used in its
process, with the inclusion of Umali in the Union’s negotiating panel, the presentation.
negotiations pushed through. The complaint was made only after a deadlock was
declared by the Union. It is clear that such ULP charge was merely an afterthought.
The Duty to Bargain Collectively
The Union alleges that the Bank violated its duty to bargainwhen it engaged in
surface bargaining.
Surface bargaining is defined as “going through the motions of negotiating” without
any legal intent to reach an agreement. The determination of whether a party has
engaged in unlawful surface bargaining is usually a difficult one because it involves,
at bottom, a question of the intent of the party in question, and usually such intent
can only be inferred from the totality of the challenged party’s conduct both at and
away from the bargaining table. It involves the question of whether an employer’s
conduct demonstrates an unwillingness to bargain in good faith or is merely hard
bargaining.
The Union has not been able to show that the Bank had done acts, both at and
away from the bargaining table, which tend to show that it did not want to reach an
agreement with the Union or to settle the differences between it and
the Union. Admittedly, the parties were not able to agree and reached a
deadlock. However, it is herein emphasized that the duty to bargain “does not
compel either party to agree to a proposal or require the making of a
concession.”Hence, the parties’ failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.
In view of the finding of lack of ULP based on Article 248(g), the accusation that the
Bank made bad faith provisions has no leg to stand on. The records show that the
Bank’s counter-proposals on the non-economic provisions or political provisions did
14
 Is "dual unionism" a ground for canceling a union's registration? No.

HELD/RATIO:

Issue 1: The charge of fraud and misrepresentation is a serious one which needs to
be clearly established by evidence. The organizational meeting questioed by the
Hotel ran for twelve hours and it was not implausible that the number of attendees
could have increased from 90 (those who responded to the roll call) to 128 (those
who signed the signature sheet for attendance). There was also nothing mysterious
in only 127 of them ratifying the consti and bylaws, since any member had the right
to refrain from ratifying the same.

Moreover, the bargaining unit that PIGLAS sought to represent consisted of 250
Heritage Hotel Mla. v Pinag- Isang Galing at Lakas ng mga Manggagawa sa employees. Only 20%, or 50 employees, were required to unionize. There was thus
Heritage Mls (Piglas Heritage)/ 2009 more than sufficient compliance with the requirement. The yearning of the hotel's
rank and file to organize should not be frustrated by technicalities, as alleged by the
FACTS: Hotel.

* Heritage Hotel employees formed the Heritage Hotel Employees Union (HHE).
Subsequently, its petition for certification election was granted, despite Hotel's
claim that it was not an independent union - being a mere chapter of the National
Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN). The
Hotel had also petitioned for the cancellation of HHE's registration.
* When case reached the CA, said court issued writ of injunction against the holding
of HHE union's certification election until such time that the petion for cancellation
of its registration had been decided with finality. Said CA decision became final after
the HHE withdrew its petition for review filed with the SC.
Issue 2: That some of PIGLAS' members were also members of HHE is not a ground
for canceling the new union's registration. The right to join an organization also
includes the right to leave the same and join another one. Besides, HHE had ceased
to exist and its registration was already canceled. Allegation of dual unionism is
therefore moot and academic. (Besides, as reasoned by DOLE, dual unionism is not
a ground for cancelling registration. It merely exposed a member to a possible
charge of disloyalty, which is an internal matter.)

* After two years, the PIGLAS was established, and thereafter was able to obtain a
registration certificate. HHE members, meantime, decided to dissolve itself and
accordingly filed for cancellation of its own union registration.

* PIGLAS then filed petition for certification election, which the Hotel opposed,
saying that the new union's officers and members were also those who comprised
the old union and that the organization of PIGLAS was a mere subterfuge for going
around the injunction against the old union from holding a certification election.
The Hotel further moved to cancel the registration of PIGLAS, citing alleged
discrepancies in the documents it submitted for its application for registration.

ISSUES:
Was there misrepresentation in the Union's application for union registration? No.
15
G.R. No. 84433 June 2, 1992
ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138
others, petitioners, vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of
Labor Relations, Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION,
et al., respondent.
Facts:
The certification election was authorized to be conducted by the Bureau of Labor
Relations among the employees of Tri-Union Industries Cor. The competing unions
were Tri-Union Employees Union-Organized Labor Association in Line Industries and
Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied Services
(TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240
actually took part in the election. Among the 240 employees who cast their votes
were 141 members of the INK.
The ballots provided for three (3) choices: (a) TUPAS and (b) TUEU-OLALIA; and,
conformably with established rule and practice, for (c) a third choice: "NO UNION."
The final tally of the votes showed the following results: TUPAS 1, TUEU-OLALIA 95,
NO UNION 1, SPOILED 1, CHALLENGED 141.
The challenged votes were those cast by the 141 INK members. They were
segregated and excluded from the final count in virtue of an agreement between
the competing unions, reached at the pre-election conference, that the INK
members should not be allowed to vote "because they are not members of any
union and refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of their
votes. They filed a petition to cancel the election alleging that it "was not fair" and
the result thereof did "not reflect the true sentiments of the majority of the
employees." TUEU-OLALIA opposed the petition. It contended that the petitioners
"do not have legal personality to protest the results of the election," because "they
are not members of either contending unit, but of the INK" which prohibits its
followers, on religious grounds, from joining or forming any labor organization."
The Med-Arbiter saw no merit in the INK employees petition, and certified the
TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file
employees.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations.
Trajano, then Officer-in-Charge of the Bureau of Labor Relations, denied the appeal.
He opined that the petitioners are "bereft of legal personality to protest their
alleged disenfrachisement" since they "are not constituted into a duly organized
labor union, hence, not one of the unions which vied for certification as sole and
exclusive bargaining representative." He also pointed out that the petitioners "did
not participate in previous certification elections in the company for the reason that
their religious beliefs do not allow them to form, join or assist labor organizations."
Issue: W/N the INK employees’ votes of “NO UNION” should be excluded from the
certification election. NO
16
Ratio:
Guaranteed to all employees or workers is the "right to self-organization and to
form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining." Article 243 LC provides as follows:
ART. 243. Coverage and employees right to self-organization. — All persons
employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical, or educational institutions whether operating
for profit or not, shall have the right to self-organization and to form, join,
or assist labor organizations of their own choosing for purposes or
collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among
others, to "interfere with, restrain or coerce employees in the exercise of their right
to self-organization." Similarly, Article 249 (a) makes it an unfair labor practice for a
labor organization to "restrain or coerce employees in the exercise of their rights to
self-organization."
The same legal proposition is set out in the Omnibus Rules Implementing the Labor
Code, as amended, as might be expected Section 1, Rule II (Registration of Unions),
Book V (Labor Relations) of the Omnibus Rules provides:
Sec. 1. Who may join unions; exception. — All persons employed in
commercial, industrial and agricultural enterprises, including employees of
government corporations established under the Corporation Code as well
as employees of religious, medical or educational institutions, whether
operating for profit or not, except managerial employees, shall have
the right to self-organization and to form, join or assist labor organizations
for purposes of collective bargaining. Ambulant, intermittent and without
any definite employers people, rural workers and those without any
definite employers may form labor organizations for their mutual aid and
protection.
The right of self-organization includes the right to organize or affiliate with a labor
union or determine which of two or more unions in an establishment to join, and to
engage in concerted activities with co-workers for purposes of collective bargaining
through representatives of their own choosing, or for their mutual aid and
protection.
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate
or resign from a labor organization, is subsumed in the right to join, affiliate with, or
assist any union, and to maintain membership therein. The right to form or join a
labor organization necessarily includes the right to refuse or refrain from exercising
said right.
Section 8 (rule VI, Book V of the Omnibus Rules) entitled "Marketing and canvassing
of votes," provides that:
 . . . (a) The voter must write a cross (X) or a check (/) in the square opposite plainly discernible intendment of the law is to grant the right to vote to all bona
the union of his choice. If only one union is involved, the voter shall make fide employees in the bargaining unit, whether they are members of a labor
his cross or check in the square indicating "YES" or "NO." organization or not.
Withal, neither the quoted provision nor any other in the Omnibus Implementing Neither does the contention that petitioners should be denied the right to vote
Rules expressly bars the inclusion of the choice of "NO UNION" in the ballots. because they "did not participate in previous certification elections in the company
Indeed it is doubtful if the employee's alternative right NOT to form, join or assist for the reason that their religious beliefs do not allow them to form, join or assist
any labor organization or withdraw or resign from one may be validly eliminated labor organizations," persuade acceptance. No law, administrative rule or precedent
and he be consequently coerced to vote for one or another of the competing unions prescribes forfeiture of the right to vote by reason of neglect to exercise the right in
and be represented by one of them. Besides, the statement in the quoted provision past certification elections.
that "(i)f only one union is involved, the voter shall make his cross or check in the
square indicating "YES" or "NO," is quite clear acknowledgment of the alternative
possibility that the "NO" votes may outnumber the "YES" votes — indicating that
the majority of the employees in the company do not wish to be represented by any
union — in which case, no union can represent the employees in collective
bargaining. And whether the prevailing "NO" votes are inspired by considerations of
religious belief or discipline or not is beside the point, and may not be inquired into
at all.
The purpose of a certification election is precisely the ascertainment of the wishes
of the majority of the employees in the appropriate bargaining unit: to be or not to
be represented by a labor organization, and in the affirmative case, by which
particular labor organization. If the results of the election should disclose that the
majority of the workers do not wish to be represented by any union, then their
wishes must be respected, and no union may properly be certified as the exclusive
representative of the workers in the bargaining unit. The minority employees —
who wish to have a union represent them in collective bargaining — can do nothing
but wait for another suitable occasion to petition for a certification election and
hope that the results will be different. They may not and should not be permitted,
however, to impose their will on the majority — who do not desire to have a union
certified as the exclusive workers' benefit in the bargaining unit — upon the plea
that they, the minority workers, are being denied the right of self-organization and
collective bargaining. As repeatedly stated, the right of self-organization embraces
not only the right to form, join or assist labor organizations, but the concomitant,
converse right NOT to form, join or assist any labor union.
That the INK employees, as employees in the same bargaining unit in the true sense
of the term, do have the right of self-organization, is also in truth beyond question,
as well as the fact that when they voted that the employees in their bargaining unit
should be represented by "NO UNION," they were simply exercising that right of
self-organization, albeit in its negative aspect.
The respondents' argument that the petitioners are disqualified to vote because
they "are not constituted into a duly organized labor union" is specious. Neither law,
administrative rule nor jurisprudence requires that only employees affiliated with
any labor organization may take part in a certification election. On the contrary, the
17
PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner, vs. PAN
AMERICAN EMPLOYEES ASSOCIATION, respondent.
[G.R. No. L-16275 February 23, 1961]
FACTS:
This is an appeal to the decision of the Court of Industrial Relations in favor of Pan
Am employees regarding the issues on meal periods and agreement to withdraw a
case.
 Pan American World Airways claim that the one-hour meal period should
not be considered as overtime work (after deducting 15 minutes), because
the evidence showed that complainants could rest completely, and were
not in any manner under the control of the company during that period.
 The court below found, on the contrary, that during the so called meal
period, the mechanics were required to stand by for emergency work; that
if they happened not to be available when called, they were reprimanded
by the leadman; that as in fact it happened on many occasions, the
mechanics had been called from their meals or told to hurry Employees
Association up eating to perform work during this period. Far from being
unsupported by substantial evidence, the record clearly confirms the above
factual findings of the Industrial Court.
ISSUE/HELD: WON the 1 hour was a rest period. NO
RATIO:
On Jurisdiction: Industrial Court may properly take cognizance of such cases if, at
the time of the petition, the complainants were still in the service of the employer,
or, having been separated from such service, should ask for reinstatement;
otherwise, such claims should be brought before the regular courts
On the Rest Period: The meal hour was not one of complete rest, but was actually a
work hour, since for its duration, the laborers had to be on ready call.
On Agreement to withdraw case: this Court is satisfied with the finding that there
was no agreement to withdraw Case No. 1055-V in consideration of the wage
increases obtained by the, union and set forth in the Collective Bargaining
Agreement Exhibit "A". As reasoned out by the court below, such alleged agreement
would have been incorporated in the contract if it existed. The fact that the union
filed a motion to dismiss without prejudice, after the Collective Bargaining Contract
had been signed, did not necessarily mean that it had agreed to withdraw the case
in consideration of the wage increases. The motion itself was expressly based on an
understanding that the company would "formulate a schedule of work which shall
be in consonance with C. A. 444". All in all, there is substantial evidence in the
record to support the finding of the court below that no such agreement was made.
Judgement below affirmed.

18
G.R. No. L-39889 November 12, 1981
UNION OF SUPERVISORS (R.B.) — NATU, petitioner, vs. THE SECRETARY OF LABOR
and REPUBLIC BANK, respondents.
Facts:
In 1970, a Provident Fund was established pursuant to the CBA between the union
and the bank for the benefit of the employees of Republic Bank. The sources of its
fund include contributions from members and of the bank. It is managed by a Board
of Trustees composed of five (5) members, of which three (3), are supposed
designated by the bank, and the other two are the presidents of the Republic Bank
Union of Supervisors and of the Republic Bank Employees' Union. Luna, president of
the petitioner union, became the fund's administrator and secretary.
In 1974, the bank decided to establish a money market department. At the meeting
of the BoT, de Vera (AVP of the bank & member of the BoT) proposed a
reorganization of the fund to carry out the instruction of the Board of Directors (of
the bank), which wants to have control of the fund so as to tie it up with the Money
Market Operations. Luna objected and a heated discussion followed. The
reorganization move was carried by a 3 to 2 vote. It was during the ensuing
discussion that Luna allegedly uttered the libelous remarks as follows:
…The present Board of Trustees decided against giving out a loan to Mr. de
Vera who was considered a poor credit risk. Now how can we expect a person
who cannot be given a loan and who will now have a say in the PF I don't
think the PF will allow that.
As I have said before the personal standing of a trustee is very important so
that if a man has a very poor standing and crooked (sic) at that he will be very
bad for the interest of the PF. I repeat that the trustees had in the past denied
a loan application of Mr. de Vera for the reason that his salary is under
garnishment and for a man to be appointed as trustee when his records show
that his salary was under garnishment, definitely, the intention of the RB is to
appoint unscrupulous people
After which, Luna walked out. Later, the bank asked Luna to turn over the all records
of the fund to the new administrator. Luna refused claiming that the appointment of
a new administrator was invalid. Later, the bank’s BoD suspended Luna as branch
manager pending investigation of Abad’s charges against him for making libelous
remarks. The investigation was held ex-parte and resulted in the dismissal of Luna
for grave misconduct and insubordination.
Petitioner filed a complaint w/ the NLRC against the bank for ULP. The NLRC
Arbitrator ruled in favor of the bank. This was affirmed by the NLRC and the
Secretary of Labor.
19
Issues:
1. WON dismissal was for valid and just cause. NO
2. WON dismissal constitutes ULP. YES
Held / ratio:
Granted, reinstatement proper.
1. No.
ON GRAVE MISCONDUCT (uttering libelous remarks)
The evidence presented does not support the findings. Luna challenged the
accuracy of the stenographic notes of the said meeting on the ground that Mrs.
Unson was not a court stenographer and her notes do not truly reflect all that
transpired during the meeting. Since there is nothing in the records to indicate
that Luna has been changed as secretary, the minutes should have been signed
by him before being officially released. Without such signature, neither
probative value nor credibility could be accorded to such minutes; for the one
who signed, Abad, is also the accuser of, and therefore biased against Luna.
This leaves only the testimonial evidence. It appears, however, that of the seven
witnesses presented only the three (3) positively testified as to the alleged
derogatory statements. This is understandable, considering that Abad is the
accuser, Galicia is the successor, and de Vera was the prime mover of Luna's
ouster. Thus, the weakness of the evidence for respondent bank is easily
discernible.
Even if it were not so, and had the alleged derogatory or libelous statements
been substantially established, still the same will not justify Luna's dismissal.
For one thing, his allegations were never controverted. On the contrary, the
said allegations were confirmed by the takeover by the Central Bank of the
distressed respondent bank which was of public knowledge.
Moreover, Luna's remarks are privileged in nature as a valid exercise of his
constitutional freedom of expression. Luna's remarks were intended to protect
the interests of the members of the Provident Fund. His protests could be
treated as union activity by the Industrial Peace Act, which assures the
employees' right "to self-organization and to form, join or assist labor
organizations of their own choosing and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid and protection ... ".
This is so because Luna's membership in the BoT was by virtue of his being
president of the Union. Luna was therefore acting out his role as protector of
his constituents.
 The joining in protests or demands, even by a small group of employees, if in
furtherance of their interests as such, is a concerted activity protected by the
Industrial Peace Act. It is not necessary that union activity be involved or that
collective bargaining be contemplated.

ON INSUBORDINATION (refusal to turn over records of the fund)

The "order" referred to was not an order but a letter-request. Luna answered in
writing explaining why he feels justified to keep them. The BoT, upon receipt of
such written explanation, should have referred the matter to the grievance
machinery under the CBA. But this was not done. Instead, management
preferred as many charges as it could frame against Luna.

That the respondent bank tried to maneuver Luna's ouster is evident from the
way the investigation was conducted. The testimonies of witnesses — who
were not even under oath — were taken without notice to Luna and without
giving him a chance to cross-examine them. And corporate actions through,
such as filing of charges, suspension and termination, were taken against Luna
just as soon as, and on the very same dates the reports are made.

2. Yes
Luna had more than 21 years of service with respondent bank and for 11 years
the president of the Union. The Union had caused the filing of several cases
against the bank with the NLRC. Some of these cases had been decided or were
settled by the parties.

The respondent bank argues that Luna's union activities had nothing to do with
his dismissal. If Luna's union activism indeed caused his separation, the bank
contends, how come it never took action against Canizares the president of the
RB Employee's Union?

To this, WE may ask the following: Why was not Cañizares cited for dereliction
of duty when he also walked out of the meeting on February 1974? The
answers are obvious: Canizares and the other union officers were not as active
and militant in their defense of union rights, much less did they pose any threat
against the respondent bank's plan to control the Provident Fund. Only Luna
posed such threat.

These circumstances indubitably show that Luna's discharge was discriminatory

and constituted unfair labor practice under paragraph (5) Section 4 of the
Industrial Peace Act

20
Benjamin Victoriano vs. Elizalde Rope Workers’ Union, Elizalde Rope Factory
Facts:
Victoriano, a member of Iglesiani Cristo, had been in the employ of Elizalde Rope
since 1958. As such, he was a member of the Elizalde Rope Workers' Union
(hereinafter referred to as the Union) which had with the Company a collective
bargaining agreement containing a closed shop provision which reads as follows:
Membership in the Union shall be required as a condition of employment for
all permanent employees workers covered by this Agreement.
The collective bargaining agreement expired on March 3, 1964 but was renewed the
following day, March 4, 1964.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by
Republic Act No. 3350, the employer was not precluded "from making an
agreement with a labor organization to require as a condition of employment
membership therein, if such labor organization is the representative of the
employees."
On June 18, 1961, however, Republic Act No. 3350 was enacted, introducing an
amendment to — paragraph (4) subsection (a) of section 4 of Republic Act No. 875,
as follows: ... "but such agreement shall not cover members of any religious sects
which prohibit affiliation of their members in any such labor organization".
The INC, as a religious sect, prohibits the affiliation of its members with any labor
organization, and as a member of the INC, Victoriano therefore presented his
resignation to the Union in 1962, and when no action was taken thereon, he
reiterated his resignation on September 3, 1974. In response, the Union wrote a
formal letter to the Company asking the latter to separate Victorianofrom service in
view of the fact that he was resigning from the Union as a member. The
management of the Company in turn notified Victorianoand his counsel that unless
he could achieve a satisfactory arrangement with the Union, the Company would be
constrained to dismiss him from the service. This prompted Victorianoto file an
action for injunction in the CFI Manila to enjoin the Company and the Union from
dismissing him.
CFI ruled in favor of Victoriano and enjoined the Company from dismissing him, as
well as sentencing the Union to pay attorney’s fees and costs. The Union appealed
to the SC, stating that the CFI erred in NOT ruling that RA 3350 was unconstitutional,
as well as questioning the payment of attorney’s fees.
Issues: WON Victoriano should be dismissed from employment due to the
termination of his membership in the Union. NO.
WON the assailed RA 3350 is unconstitutional. NO.
Ratio:
The SC, in affirming the CFI decision, states that the right to religion prevails over
contractual or legal rights such as the right to self-organization. As such, an INC
member may refuse to join a labor union and despite the fact that there is a closed
21
shop agreement in the factory where he was employed, his employment could not
be validly terminated for his non-membership in the majority therein.
Furthermore, the right to join a union includes the right NOT to join a union. The
law recognizes both the rights of unions and employers to enforce terms of
contracts and at the same time it recognizes the workers’ right to join or not to join
union. But the RA recognizes as well the primacy of a constitutional right over a
contractual right.
A right comprehends at least two broad notions, namely: first, liberty or freedom,
i.e., the absence of legal restraint, whereby an employee may act for himself
without being prevented by law; and second, power, whereby an employee may, as
he pleases, join or refrain from Joining an association. It is, therefore, the employee
who should decide for himself whether he should join or not an association; and
should he choose to join, he himself makes up his mind as to which association he
would join; and even after he has joined, he still retains the liberty and the power to
leave and cancel his membership with said organization at any time.
The right to join associations includes the right not to join or to resign from a labor
organization.The Act has given substance to such right by prohibiting the
compulsion of workers to join labor organizations.
What the exception provides, therefore, is that members of said religious sects
cannot be compelled or coerced to join labor unions even when said unions have
closed shop agreements with the employers; that in spite of any closed shop
agreement, members of said religious sects cannot be refused employment or
dismissed from their jobs on the sole ground that they are not members of the
collective bargaining union.
It is clear, therefore, that the assailed Act, far from infringing the constitutional
provision on freedom of association, upholds and reinforces it. It does not prohibit
the members of said religious sects from affiliating with labor unions. It still leaves
to said members the liberty and the power to affiliate, or not to affiliate, with labor
unions. If, notwithstanding their religious beliefs, the members of said religious
sects prefer to sign up with the labor union, they can do so. If in deference and
fealty to their religious faith, they refuse to sign up, they can do so; the law does not
coerce them to join; neither does the law prohibit them from joining; and neither
may the employer or labor union compel them to join.
Republic Act No. 3350, therefore, does not violate the constitutional provision on
freedom of association.
Kapatiran sa Meat and Canning Division v. Calleja
June 20, 1988

FACTS:
 The petitioner, Kapatiransa Meat and Canning Division has been the sole
collective bargaining representative of Universal Robina Corp. for 3 years.
Thereafter, NEW ULO, composed mostly of Iglesia Ni Cristo members,
registered as a labor union. The new union, claiming that it has “the
majority of the daily wage rank and file employees,” filed a petition for a
certification election at the Bureau of Labor Relations. This was opposed by
the petitioner.

 Med-Arbiter ordered the holding of a certification election. BLR dismissed

petitioner’s appeal. SC denied the same. Hence, this petition.

ISSUE: WON the right of the members of the INC not to join a labor union, for being
contrary to their religious beliefs, bars them from forming their own union.

HOLDING/RATIO:
 NO. As held in the case of Victoriano v. Elizalde Rope Workers’ Union,
upholding the right of members of the INC sect not to join a labor union for
being contrary to their religious beliefs, does not bar the members of that
sect from forming their own union. At the same time, NEW ULO was able
to file a timely petition for certification election within the 60 day freedom
period and was able to ascertain the majority of the workers who prefer
their union.

22
PAPER INDUSTRIES CORP. OF THE PHILS. V. LAGUESMA In this case, the job description of the supervisory employees and section heads
April 12, 2000 show that they are not actually managerial but only supervisory employees, since
FACTS: Paper Industries Corporation of the Philippines (PICOP), engaged in the they do not lay down company policies. The contention that they exercise the
manufacture of paper and timber products, has over 9000 employees, 944 of whom authority to hire and fire is ambiguous and quite misleading because such authority
are supervisory and technical staff employees, and more or less 487 of said 944 are is not supreme but merely advisory in character. Theirs is not a final determination
signatory members of PICOP-Bislig Supervisory and Technical Staff Employees Union of the company policies, inasmuch as any action taken by them on matters relative
(respondent). to hiring, promotion, transfer, suspension and termination of employees is still
Respondent instituted a petition for certification election to determine the sole and subject to confirmation and approval by their superior. Thus, where such power,
exclusive bargaining agent of the supervisory and technical staff employees of PICOP which is in effect recommendatory in character, is subject to evaluation, review, and
for CBA purposes. Federation of Free Workers (FFW) and Associated Labor Union final action by the department heads and higher executives of the company, the
(ALU) filed their respective petitions for intervention. same is not effective and not an exercise of independent judgment as required by
Med-Arbiter: Granted petitions for intervention and set the holding of a law.
certification election among PICOP’s supervisory and technical staff employees with There was no denial of due process when the Undersecretary did not allow PICOP to
4 choices, namely: (1) respondent, (2) FFW, (3) ALU, and (4) no union. present additional evidence on the implementation of its program inasmuch as the
Secretary of Labor: Upheld Med-Arbiter’s order. appeal before the former, PICOP even then had already submitted voluminous
PICOP: objected to the inclusion of some section heads and supervisors in the list of supporting documents. What the law prohibits is the lack of opportunity to be
voters, whose positions were reclassified as managerial employees in light of the heard. PICOP only voiced out its objection to the holding of certification election
Revised Organizational Structure effected by PICOP. The company was divided into 4 after the Undersecretary affirmed the holding thereof, which leads to the conclusion
main business groups, namely: Paper Products Business, Timber Products Business, that PICOP raised the issue merely to prevent and thwart the concerned section
Forest Resource Business and Support Services Business. A Vice-President or heads and supervisory employees from exercising a right granted them by law.
Assistant Vice-President heads each of these business groups. A Division Manager DISPOSITIVE: Petition dismissed.
heads the divisions comprising each business group. A Department Manager heads
the departments comprising each division. Section Heads and Supervisors, now
called Section Managers and Unit Managers, head the sections and independent
units, respectively, comprising each department. Considering the present authority
of these section managers and unit managers to hire and fire, they are classified as
managerial employees, and hence, ineligible to form/join any labor organization.
Med-Arbiter: Supervisors and section heads of PICOP are managerial employees
and therefore excluded from the list of voters for purposes of certification election.
Undersecretary of Labor: Reversed. Subject supervisors and section heads are
supervisory employees eligible to vote in the certification election.
ISSUE: Whether the subject section heads and supervisors are managerial
employees ineligible to vote in the certification election.  NO.
RATIO: Managerial Employees are ranked as Top Managers, Middle Managers and
First Line Managers. Top and Middle Managers have the authority to devise,
implement and control strategic and operational policies, while the task of the First-
Line Managers is simply to ensure that such policies are carried out by the rank-and-
file employees. Under this distinction, “managerial employees” fall in 2 categories,
namely, the managers per se composed of Top and Middle Managers, and the
supervisors composed of First-Line Managers. Thus, the mere fact that an employee
is designated as “manager” does not ipso facto make him one, for it is the job
description that determines the nature of employment.
23
 Loss of Confidence. Neither is his dismissal justified on ground of loss of confidence.
[G.R. No. 121036, April 12, 2000] KAPUNAN, J.: As a ground for dismissal, the term "trust and confidence" is restricted to
managerial employees.
RUFINO NORBERTO F. SAMSON, petitioner, vs. Before one may be properly considered a managerial employee, all the following
NLRC, SCHERING-PLOUGH CORPORATION, LEO RICONALLA and JOSE L. conditions must be met:
ESTINGOR, respondents. (1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or sub-division thereof;
(Syllabus Topics: Supervisors, Test; Managerial and Confidential Employees, Test; (2) They customarily and regularly direct the work of two or more
See “Loss of Confidence” as ground for dismissal) employees therein;
FACTS: Petitioner Samson received a letter calling the attention of petitioner’s (3) They have the authority to hire or fire other employees of lower rank; or
conduct during a Sales and Marketing Christmas gathering where Samson allegedly their suggestions and recommendations as to the hiring and firing and as to
made utterances of obscene, insulting and offensive words towards the SPS’s the promotion or any other change of status of other employees are given
Management Committee. Complainant was given two days to explain why no particular weight.
disciplinary action should be taken against him and he was thereafter placed on Further, it is the nature of the employee’s functions, and not the nomenclature or
preventive suspension. Samson replied stating that such utterances were only made title given to his job, which determines whether he has rank-and-file, supervisory or
in reference to a decision taken by the management committee on the Cua Lim Case managerial status.
and not to any specific person. Petitioner was thereafter informed in a letter that his The job description of petitioner does not mention that petitioner possesses the
employment was terminated. The Labor Arbiter rendered a decision declaring the power "to lay down policies nor to hire, transfer, suspend, lay off, recall, discharge,
dismissal of petitioner illegal. Both parties appealed the decision; petitioner filed a assign or discipline employees." Absent this crucial element, petitioner cannot be
partial appeal of the denial of his claim for holiday pay and the cash equivalent considered a managerial employee despite his designation as District Sales
of the rice subsidy; respondent company sought the reversal of the labor arbiter’s Manager.
ruling of illegal dismissal. The NLRC found that dismissal was made for just cause.
ISSUE: W/N petitioner was validly dismissed.
HELD: No.
Misconduct. Petitioner’s dismissal was brought about by utterances made during an
informal Christmas gathering. For misconduct to warrant dismissal, it must be in
connection with the employee’s work. In this case, the alleged misconduct was
neither in connection with the employee’s work, as such utterances of petitioner is
expected in informal gatherings; also, such conduct was not even of such serious
and grave character. Furthermore, petitioner’s outburst was in reaction to the
decision of the management in a certain case and was not intended to malign on
the person of the respondent company’s president and general manager.
Respondent company itself did not seem to consider the offense serious to warrant
an immediate investigation. It is also provided in respondent company’s rules and
regulations that for conduct such as that of the petitioner, a first offense would only
warrant a “verbal reminder” and not dismissal. Petitioner’s position does
not fall within the definition of a managerial employee; and even assuming that he
is, the ground for loss of confidence is without basis as it was not clearly
established. Therefore, there was no just cause for petitioner’s dismissal and thus
was unlawful.

24
Tagaytay Highlands Intl Golf Club, Inc. v Tagaytay Highlands Employees Union/
2003
FACTS:
*1997- THEU (Phil. Transport & General Workers Organization) filed petition for
certification election before the DOLE Med-Arbiter. THIGCI opposed on the geound
that the list of union members submitted by the former was defective since it
allegedly imcluded the names of supervisors, resigned, terminated and AWOL
employees, plus employees of another country club, and that out of 192 signatories
to the petition, only 71 were actual R&F (rank&file) employees of THIGCI.
* THEU asserted its compliance with all the requirements for valid inclusion in the
roster of legitimate labor organizations and, that being so, the legitimacy of its
registration cannot be subject to collateral attack (pursuant to DOLE Dept Order 9, S.
1997). It proceeded to ask the Med Arb to automatically order the conduct of a
certification election.
for cancellation. (The grounds for cancellation of union registration are provided in
Art. 239, LC. It does NOT include the existence of disqualified members in the roster
as a valid ground for cancellation, unless the same is attended by misrepresntation,
false statement or fraud. If these are attendant, the proper procedure to prove
them is by a petition for cancellation of the cert of registration and not by
intervening in a petition for certification election.
* Further, there was lack of evidence to substantiate lack of mutuality of interest.
Although THIGCI submitted a list of its EEs with corresponding ranks, there is no
mention of the supervisors' respective duties, powers, prerogatives as would
indicate their managerial function. As held in Pepsi Cola v Sec of Labor, " The mere
fact that an EE is designated manager does not necessarily make him one. What is
essential is the nature of the EEs function and not the nomenclature given to the job
which determines whether the EE has R&F or managerial status or a supervisory EE.
* Case thus remanded to Med Arb for the conduct of a cert election subject to the
usual pre election conference.

* Med Arb granted the petition for the holding of a cert election, ruling that the
allegations pertaining to inclusion of dubious employees ought to be raised in an
exclusion-inclusion proceeding at the pre-election conference, and that the charges
of fraud in the securing of signatures should be coursed thru an independent
petition for cancellation of the union's registration.

* Upon appeal, the DOLE Secretary set aside Med Arb's decision and declared a
clear absence of communityy/mutuali of interests since THEU sought to represent
two bargaining units: supervisory EEs and R&F EEs, as well as employees from a
different corporate entity.

* Upon MR, DOLE Undersecretary Baldoz - by authority of the DOLE Secretary - held
that rather than disregard the legitimacy of THEU, the names of the alleged
disqualified EEs should simply be removed from the roster of members and that the
issue on terminated, AWOL EEs can be resolved in the concomitant inclusion-
exclusion proceedings. The CAaffirmed this DOLE Resolution.

ISSUE: WON the conduct of cert election is proper, despite the allegations raised
against THEU. Yes.

HELD/RATIO:

* After a certificate of registration is issued to a union, its legal personality cannot

be subject to collateral attack. It may be questioned only in an independent action
25
G.R. No. 122226 March 25, 1998
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs. HON.
BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES,
INC. respondents.
Facts:
Petitioner is a union of supervisory employees. It appears that on March 20, 1995
the union filed a petition for certification election on behalf of the route managers
at Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-
arbiter and, on appeal, by the Secretary of Labor and Employment, on the ground
that the route managers are managerial employees and, therefore, ineligible for
union membership under the first sentence of Art. 245 of the Labor Code, which
provides:
Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their
own.
Petitioner filed a motion for reconsideration, pressing for resolution its contention
that the first sentence of Art. 245 of the Labor Code, so far as it declares managerial
employees to be ineligible to form, assist or join unions, contravenes Art. III, Sec. 8
of the Constitution which provides:
The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary
to law shall not be abridged.
Issues:
1) W/N the route managers at Pepsi-Cola Products Philippines, Inc. are managerial
employees. YES
2) W/N Art. 245, insofar as it prohibits managerial employees from forming, joining
or assisting labor unions, violates Art. III, Sec. 8 of the Constitution. NO
Ratio:
1) The route managers cannot thus possibly be classified as mere supervisors
because their work does not only involve, but goes far beyond, the simple
direction or supervision of operating employees to accomplish objectives set by
those above them. They are not mere functionaries with simple oversight
functions but business administrators in their own right.
Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority
is not merely routinary or clerical in nature but requires the use of independent
judgment." Thus, their only power is to recommend. Certainly, the route
managers in this case more than merely recommend effective management
action. They perform operational, human resource, financial and marketing
26
functions for the company, all of which involve the laying down of operating
policies for themselves and their teams
The term "manager" generally refers to "anyone who is responsible for
subordinates and other organizational resources." Managers constitute three
levels of a pyramid:
FIRST-LINE MANAGERS: The lowest level in an organization at which individuals
are responsible for the work of others is called first-line or first-level
management. First-line managers direct operating employees only; they do not
supervise other managers
MIDDLE MANAGERS: Middle managers direct the activities of other managers
and sometimes also those of operating employees. Middle managers' principal
responsibilities are to direct the activities that implement their organizations'
policies and to balance the demands of their superiors with the capacities of
their subordinates
TOP MANAGERS: Composed of a comparatively small group of executives, top
management is responsible for the overall management of the organization. It
establishes operating policies and guides the organization's interactions with its
environment
In the Case, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola
Products Philippines, Inc., decided on November 13, 1991, the Secretary of
Labor found: we find that only those employees occupying the position of route
manager and accounting manager are managerial employees.
2) The real intent of Art. III, 8 is evident in Lerum’s proposal. The Commission
intended the absolute right to organize of government workers, supervisory
employees, and security guards to be constitutionally guaranteed. By
implication, no similar absolute constitutional right to organize for labor
purposes should be deemed to have been granted to top-level and middle
managers.
Nor is the guarantee of organizational right in Art. III, Sec. 8 infringed by a ban
against managerial employees forming a union. The right guaranteed in Art. III,
Sec. 8 is subject to the condition that its exercise should be for purposes "not
contrary to law." In the case of Art. 245, there is a rational basis for prohibiting
managerial employees from forming or joining labor organizations. In Bulletin
Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:
The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of
evident conflict of interests. The Union can also become company-
dominated with the presence of managerial employees in Union
membership.

FILOIL REFINERY CORPORATION, petitioner, vs. FILOIL SUPERVISORY &
CONFIDENTIAL EMPLOYEES ASSOCIATION AND COURT OF INDUSTRIAL
RELATIONS, respondents.
TEEHANKEE, J.: [G.R. No. L-26736 August 18, 1972]
right of supervisors and confidential employees to organize the respondent labor
association and to bargain collectively with their employer
FACTS:
 Respondent association is a labor organization duly registered with the
Department of Labor. It is composed exclusively of the supervisory and
confidential employees of petitioner corporation. There exists another
entirely distinct labor association composed of the corporation's rank-and-
file employees, the Filoil Employees & Workers Association (FEWA) with
which petitioner executed a collective bargaining agreement. This
collective bargaining agreement expressly excluded from its coverage
petitioner's supervisory and confidential employees, who in turn organized
their own labor association, respondent herein.
 February 18, 1965 Filoil Supervisory & Confidential Employees Assoc filed
its petition for certification as the sole and exclusive collective bargaining
agent of all of petitioner's supervisory and confidential employees working
at its refinery in Rosario, Cavite.
 Corp filed a MTD on grounds of lack of cause of action claiming supervisors
are not employees in the Industrial Peace Act since they are part of
management, they do not have the right to bargain collectively although
they may organize an organization of their own.
 CIR denied MTD. It ruled that under the express provisions of section 3 of
the Industrial Peace Act, "(I)ndividuals employed as supervisors shall not be
eligible for membership in a labor organization of employees under their
supervision but may form separate organizations their own.” CIR Ruled in
favor of Filoil S&C Emp Assoc.
ISSUE: WON supervisors are part of management and not considered as employees
entitled to bargain collectively. NO
RATIO:
Petitioner's contentions are untenable, prescinding from the fact of its failure to
appeal in due course respondent court's en banc resolution of September 7, 1965
upholding the right of the supervisors and confidential employees to organize
respondent association and to compel petitioner to negotiate and bargain
collectively with it. Petitioner's argument that since supervisors form part of
management, to allow them to bargain collectively would be tantamount to
27
management bargaining with itself may be a well-turned phrase but ignores the
dual status of a supervisor as a representative of management and as an employee.
As stated for the Court by the now Chief Justice in AG & P Co. of Manila, Inc. vs.
C.I.R., 8 section 3 of the Industrial Peace Act "explicitly provides that "employees" —
and this term includes supervisors — "shall have the right to self-organization, and
to form, join or assist labor organizations of their own choosing for the purpose of
collective bargaining through representations of their own choosing and to engage
in concerted activities for the purpose of collective bargaining and other mutual aid
or protection" and that "individuals employed as supervisors ... may form separate
organizations of their own". Indeed, it is well settled that "in relation to his
employer," a foreman or supervisor "is an employee within the meaning of the
Act" ... For this reason, supervisors are entitled to engage in union activities and any
discrimination against them by reason thereof constitutes an unfair labor practice."
Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace
Act which expressly grants supervisors the right to organize and bargain collectively,
which are beyond the Court's power of review.
So with petitioner's thesis that "(T)o then give supervisors the right to compel
employers to bargain would in effect align labor and management together against
stockholders and bondholders (capital) and inexorably tilt the balance of power in
favor of these hitherto confliction forces. This is contrary to the nature and
philosophy of free enterprise." This further serves to point up the validity and
rationale of the Industrial Peace Act's provision, since the supervisors and
confidential employees, even though they may exercise the prerogatives of
management as regards the rank and file employees are indeed employees in
relation to their employer, the company which is owned by the "stockholders and
bondholders (capital)" in petitioner's own words, and should therefore be entitled
under the law to bargain collectively with the top management with respect to their
terms and conditions of employment.
Petitioner's argument that the express provisions of section 3 of our Industrial
Peace Act must give way to the intendment of the Taft-Hartley Act which exempts
employers from the legal obligation to recognize and negotiate with supervisors is
tenuous and groundless. The language of our own statute is plain and unambiguous
and admits of no other interpretation.
The other principal ground of petitioner's appeal questioning the confidential
employees' inclusion in the supevisors bargaining unit is equally untenable.
Respondent court correctly held that since the confidential employee are very few
in number and are by practice and tradition identified with the supervisors in their
role as representives of management vis-a-vis the rank and file employee such
identity of interest has allowed their inclusion in the bargaining unit of supervisors-
managers for purposes of collective bargaining in turn as employees in relation to
the company as their employer.
Judgement affirmed.

G.R. No. 91902 May 20, 1991
MANILA ELECTRIC COMPANY, petitioner, vs. THE HON. SECRETARY OF LABOR AND
EMPLOYMENT, STAFF AND TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO,
and FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY
EMPLOYEES,respondents.
Facts:
On November 1988, the Staff and Technical Employees Association of MERALCO
("STEAM") a labor organization of staff and technical employees, filed a petition for
certification election seeking to represent regular employees of MERALCO who are:
(a) non-managerial employees with Pay Grades VII and above;
(b) non-managerial employees in the Patrol Division, Treasury Security
Services Section, Secretaries who are automatically removed from the
bargaining unit; and
(c) employees within the rank and file unit who are automatically
disqualified from becoming union members of any organization within the
same bargaining unit.
The petition was premised on the disqualification of certain MERALCO employees
pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA.
Before Med-Arbiter Parungo, MERALCO contended that employees from Pay Grades
VII and above are classified as managerial employees who, under the law, are
prohibited from forming, joining or assisting a labor organization of the rank and
file. As regards those in the Patrol Division and Treasury Security Service Section,
MERALCO maintains that since these employees are tasked with providing security
to the company, they are not eligible to join the rank and file bargaining unit,
pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and
Regulations of the Labor Code (1988) which reads as follows:
Sec. 2. Who may file petition. — The employer or any legitimate labor
organization may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxx xxx xxx
28
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require, and provided, further: that the appropriate
bargaining unit of the rank and file employees shall not include security
guards (As amended by Sec. 6, Implementing Rules of EO 111)
The Med-Arbiter ruled that having been excluded from the existing CBA for rank and
file employees, these employees have the right to form a union of their own, except
those employees performing managerial functions. The Secretary of Labor affirmed
the assailed order of the Med-Arbiter.
Issue: W/N security guards may join the union of rank-and-file employees. YES
Held / ratio: Dismissed, certification election ordered conducted.
MERALCO has questioned the legality of allowing them to join either the rank and
file or the supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule II,
Book V of the Implementing Rules of RA 6715, which states as follows:
Sec 1. Who may join unions. . . .
Supervisory employees and security guards shall not be eligible for
membership in a labor organization of the rank-and-file employees but
may join, assist or form separate labor organizations of their own; . . .
Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of
the implementing rules of RA 6715:
Rule V.
REPRESENTATION CASES AND
INTERNAL-UNION CONFLICTS
Sec. 1. . . .
Sec. 2. Who may file.—Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor-organization shall contain,
among others:
(a) . . .
(b) . . .
(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require; and provided further, that the
appropriate bargaining unit of the rank-and-file employees shall not
include supervisory employees and/or security guards;
Both rules, barring security guards from joining a rank and file organization, appear
to have been carried over from the old rules which implemented then Art. 245 of
the Labor Code:
 Art. 245. Ineligibility of security personnel to join any labor organization.—
Security guards and other personnel employed for the protection and
security of the person, properties and premises of the employer shall not be
eligible for membership in any labor organization.
In 1986, Pres. Aquino issued E.O. No. 111 which eliminated the above-cited
provision on the disqualification of security guards. What was retained was the
disqualification of managerial employees, renumbered as Art. 245 (previously Art.
246), as follows:
Art. 245. Ineligibility of managerial employees to joint any labor
organization.—Managerial employees are not eligible to join, assist or
form any labor organization.
With the elimination, security guards were thus free to join a rank and file
organization.
In 1989, the Congress passed RA 6715. Section 18 thereof amended Art. 245, to
read as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization;
right of supervisory employees.—Managerial employees are not eligible to
join, assist or form any labor organization.Supervisory employees shall not
be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist, or form separate labor organizations of their
own.
organization, whether rank and file or supervisory, in recognition of their
constitutional right to self-organization.
The law is apt to produce divided loyalties in the faithful performance of their
duties. Economic reasons would present the employees concerned with the
temptation to subordinate their duties to the allegiance they owe the union of
which they are members, aware as they are that it is usually union action that
obtains for them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect
or outrightly abandon their duties, such as protection of property of their employer
and the persons of its officials and employees, the control of access to the
employer's premises, and the maintenance of order in the event of emergencies
and untoward incidents.
It is hoped that the corresponding amendatory and/or suppletory laws be passed by
Congress to avoid possible conflict of interest in security personnel.

The second sentence of Art. 245 embodies an amendment disqualifying supervisory

employees from membership in a labor organization of the rank-and-file employees.
It does not include security guards in the disqualification.

The implementing rules of RA 6715, therefore, insofar as they disqualify security

guards from joining a rank and file organization are null and void, for being not
germane to the object and purposes of EO 111 and RA 6715.

The rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it has been enacted. The power cannot be
extended to amending or expanding the statutory requirements or to embrace
matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned.

under RA 6715, they may now freely join a labor organization of the rank and file or
that of the supervisory union, depending on their rank. By accommodating
supervisory employees, the Secretary of Labor must likewise apply the provisions of
RA 6715 to security guards by favorably allowing them free access to a labor
29
Standard Chartered Employees Union v. Standard Chartered Bank
Facts:
The Union and the Bank began negotiations for a new Collective Bargaining
Agreement in May 2000 due to the expiration of the 1998-2000 CBA. However, the
negotiations went into deadlock, prompting the Union to file a Notice of Strike,
prompting the assumption of jurisdiction of the Labor Secretary. The Labor
Secretary subsequently issued an order stating that the Bank and Union are directed
to execute the CBA agreement effective April 1, 2001 until March 2003,
incorporating the agreements and dispositions reached over the course of
negotiations. Motions to reconsider from both parties were denied. The CA also
dismissed their petition for certiorari.
[RELEVANT TO THE ISSUE] It was brought forth by the Court that the CBA provisions
in dispute consisted of:
 Exclusion of certain employees from the appropriate bargaining unit
 Adjustment of remuneration for employees serving in an acting capacity for
one month.
The Union sought the exclusion of only the following employees from the
appropriate bargaining unit – all managers who are vested with the right to hire and
fire employees, confidential employees, those with access to labor relations
materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and
one Human Resources (HR) staff.
In the previous 1998-2000 CBA, the excluded employees are as follows:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branches
2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new
recruits.
C. Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other
branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as
amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff
30
The Secretary of Labor maintained the previous exclusions from the 1998-2000 CBA
as the Union failed to show that the employee sought to be removed from the list
qualify for exclusion.
Issue: WON managerial and confidential employees should be excluded from the
appropriate bargaining unit. YES.
Ratio:
The Court held that disqualification of managerial and confidential employees from
joining a bargaining unit for rank and file employees is already well-entrenched in
jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join,
form and assist any labor organization to managerial employees, jurisprudence has
extended this prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
The Court held that:
A. Bank Cashiers are considered as confidential employees, citing National
Association of Trade Unions (NATU) – Republic Planters Bank Supervisors
Chapter v. Torres. The Court stated that such employees have control,
custody and/or access to confidential matters, e.g., the branch's cash
position, statements of financial condition, vault combination, cash codes
for telegraphic transfers, demand drafts and other negotiable instruments.
Therefore, they were held to be disqualified from joining or assisting a
union, or any other labor organization.
B. Radio and Telegraph operators, citing Golden Farms, Inc. v. Ferrer-Calleja,
were also held to be confidential employees, who, having access to
confidential information, may become the source of undue advantage in
that they may act as spy or spies of either party to a collective bargaining
agreement.
C. Personnel staff were also said to be confidential employees since, by the
very nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.
In general, the test of whether or not an employee should be considered as a
confidential employee should be whether or not the employee, by the nature of his
or her position, has control, custody or access to confidential matters, such that
they may become a source of undue advantage to either party in the negotiating
table.
The Union was unable to buttress and substantiate its claims that bank cashiers,
radio and telegraph operators, and personnel staff were not confidential employees.
As stated by the CA:
“…petitioner failed to show that the employees sought to be removed from the
list of exclusions are actually rank and file employees who are not managerial or
confidential in status and should, accordingly, be included in the appropriate
bargaining unit.”
“Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the
Telex department and one (1) HR Staff have mutuality of interest with the other
rank and file employees, then they are rightfully excluded from the appropriate
bargaining unit.”

31
San Miguel Corp. Supervisors and Exempt Union v. Laguesma
August 15, 1997
FACTS:
 Petitioner union filed before DOLE a Petition for Direct Certification or
Certification Election among the supervisors and exempt employees of the
SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
 Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of
certification election among the abovementioned employees of the
different plants as one bargaining unit.
 San Miguel Corporation filed a Notice of Appeal with Memorandum on
Appeal, pointing out, among others, the Med-Arbiter’s error in grouping
together all three (3) separate plants, into one bargaining unit, and in
including supervisory levels 3 and above whose positions are confidential
in nature.
 The public respondent, Undersecretary Laguesma, granted respondent
company’s Appeal and ordered the remand of the case to the Med-Arbiter
of origin for determination of the true classification of each of the
employees sought to be included in the appropriate bargaining unit.
 Upon petitioner-union’s motion, Undersecretary Laguesma granted the
reconsideration prayed for and directed the conduct of separate
certification elections among the supervisors ranked as supervisory levels 1
to 4 (S1 to S4) and the exempt employees in each of the three plants at
Cabuyao, San Fernando and Otis.
ISSUE:
1. WON the Supervisory employees 3 and 4 and the exempt employees of the
company are considered confidential employees, hence ineligible from
joining a union. NO
2. WON the employees of the three plants constitute an appropriate single
bargaining unit, if they are not confidential employees. YES
HOLDING/RATIO:
WON the Supervisory employees 3 and 4 and the exempt employees of the
company are considered confidential employees, hence ineligible from joining a
union.
32
 NO. On the first issue, this Court rules that said employees do not fall
within the term “confidential employees” who may be prohibited from
joining a union.
 They are not qualified to be classified as managerial employees who, under
Article 245 of the Labor Code, are not eligible to join, assist or form any
labor organization. In the very same provision, they are not allowed
membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own.
 Confidential employees are those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. The two criteria are
cumulative, and both must be met if an employee is to be considered a
confidential employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations.
 The exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies relating to
labor relations is a principal objective sought to be accomplished by the
”confidential employee rule.” The broad rationale behind this rule is that
employees should not be placed in a position involving a potential conflict
of interests. “Management should not be required to handle labor relations
matters through employees who are represented by the union with which
the company is required to deal and who in the normal performance of
their duties may obtain advance information of the company’s position
with regard to contract negotiations, the disposition of grievances, or other
labor relations matters.”
 The Court held that “if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty to
the Union in view of evident conflict of interest. The Union can also
become company-dominated with the presence of managerial employees
in Union membership.”
 An important element of the “confidential employee rule” is the
employee’s need to use labor relations information. Thus, in determining
the confidentiality of certain employees, a key question frequently
considered is the employee’s necessary access to confidential labor
relations information.
WON the employees of the three plants constitute an appropriate single bargaining
unit.

 YES. The fact that the three plants are located in three different places,
namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San
Fernando, Pampanga is immaterial. Geographical location can be
completely disregarded if the communal or mutual interests of the
employees are not sacrificed.

 An appropriate bargaining unit may be defined as “a group of employees of

a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.”

 A unit to be appropriate must effect a grouping of employees who have

substantial, mutual interests in wages, hours, working conditions and other
subjects of collective bargaining.

33
SUGBUANON RURAL BANK, INC. v. LAGUESMA
Feb. 2, 2000
FACTS: Petitioner Sugbuanon Rural Bank, Inc. (SRBI) is a duly registered banking
institution while respondent SRBI-Association of Professional, Supervisory, Office
and Technical Employees Union is a legitimate labor organization affiliated with the
Trade Unions Congress of the Philippines (TUCP).
DOLE Regional Office granted a Certificate of Registration to respondent. Then
respondent filed a petition for a certification election of the supervisory employees
of SRBI, alleging that SRBI employed 5 or more supervisory employees, a majority of
which supported the petition; there was no existing CBI between any union and
SRBI; and no certification election had been held in SRBI during the past 12 months
prior to the petition.
Med-Arbiter: Gave due course to the petition.
SRBI: Motion to Dismiss. The members of respondent were in fact managerial or
confidential employees disqualified from forming, joining or assisting any labor
organization (attached job descriptions). Moreover, the ALU-TUCP was representing
the union. Since it also sought to represent the rand-and-file employees of SRBI,
there was a violation of the principle of separation of unions.
Respondent Union: Its members were not managerial employees but merely
supervisory (attached affidavits describing the nature of their respective duties). Art.
245 of the Labor Code expressly allowed supervisory employees to form, join or
assist their own unions.
Med-Arbiter: Denied motion to dismiss.
Secretary of Labor and Employment: Denied SRBI’s appeal.
Med-Arbiter: The following SRBI personnel are voting supervisory employees in the
election: Cashier of the Main Office, Cashier of the Mandaue Branch, Accountant of
the Mandaue Branch, and the Acting Chief of the Loans Department.
DOLE UNDERSECRETARY: Denied appeal. Respondent was a legitimate labor
organization fully entitled to all the rights and privileges granted by law, including
the right to file a petition for certification election. Until and unless a final order is
issued cancelling the union’s registration certificate, it had the legal right to
represent its members for collective bargaining purposes.
ISSUE: Whether the union members should be considered as managerial or
confidential employees.  NO.
RATIO: Art. 212(m) of the Labor Code defined “managerial employee” as one who is
vested with powers or prerogatives to lay down and execute management policies
and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees; “supervisory employees” are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is
34
not merely routinary or clerical in nature but requires the use of independent
judgment.
SRBI: The functions are responsibilities of the employees involved constitute the
very core of the bank’s business – lending of money to clients and borrowers,
evaluating their capacity to pay, approving the loan and its amount, scheduling the
terms of repayment, and endorsing delinquent accounts to counsel for collection –
hence, they must be deemed managerial employees.
SC: In Tabacalera v. NLRC, the court classified a credit and collection supervisor by
management as a managerial/supervisory personnel, because they had the power
to recommend the hiring and appointment of his subordinates, as well as the power
to recommend any promotion and/or increase. SRBI failed to show that the
employees concerned were vested with similar powers. At best, they only had
recommendatory powers subject to evaluation, review and final decision by the
bank’s management. Their job descriptions show that they cannot transfer, suspend,
lay-off, recall, discharge, assign or discipline employees; nor do they formulate and
execute management policies which are normally expected of management officers.
In Panday v. NLRC, a branch accountant was considered a managerial employee
because said employee had managerial powers, including recommending the hiring
and appointment of his subordinates and the power to recommend any promotion
and/or increase. Subject employees in this case do not possess managerial powers
and duties. They are not managerial employees.
Confidential employees are those who (1) assist or act in a confidential capacity, in
regard (2) to persons who formulate, determine and effectuate management
policies (specially in the field of labor relations). The 2 criteria are cumulative and
both must be met if an employee is to be considered a confidential employee – that
is, the confidential relationship must exist between the employee and his superior
officer; and that officer must handle the prescribed responsibilities relating to labor
relations.
Although Art. 245 of the Labor Code does not directly prohibit confidential
employees from engaging in union activities, under the doctrine of necessary
implication, the disqualification of managerial employees equally apply to
confidential employees. The confidential-employee rule justifies exclusion of
confidential employees because in the normal course of their duties, they become
aware of management policies relating to labor relations. However, when the
employee does not have access to confidential labor relations information, there isn
o legal prohibition against confidential employees from forming, assisting or joining
a union.
SRBI: It has only 5 officers running its day-to-day affairs. They assist in confidential
capacities and have complete access to the bank’s confidential data. They form the
core of the bank’s management team.
SC: SRBI’s explanation does not state who among them has access to information
specifically relating to its labor relations policies. Although the Board of Directors is
responsible for corporate policies, the exercise of corporate powers, and the general
management of the business and affairs of the corporation, the secretary of the
bank’s governing body could not be deemed to have access to confidential
information specifically relating to SRBI’s labor relations policies.
ISSUE: Whether the Med-Arbiter may validly order the holding of a certification
election upon the filing of a petition for certification election despite SRBI’s appeal
pending before the DOLE Secretary against the issuance of the union’s registration.
 YES.
RATIO: One of the rights of a legitimate labor organization under Art. 242(b) is the
right to be certified as the exclusive representative of all employees in an
appropriate bargaining unit for purposes of collective bargaining. Having complied
with the requirements of Art. 234, respondent is a legitimate labor union. Art. 257
mandates that a certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization. Nothing
prohibits such automatic conduct of certification election if the management
appeals on the issue of the validity of the union’s registration.
A local union maintains its separate personality despite affiliation with a larger
national federation.
The law frowns on a union where the membership is composed of both supervisors
and rank-and-file employees, for fear that conflicts of interest may arise in the areas
of discipline, collective bargaining and strikes.

35
G.R. No. 108855. February 28, 1996 Kapunan, J.
METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-
CONFESOR, in her capacity as SOLE and METRO DRUG CORPORATION EMPLOYEES
ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.
Syllabus Topic: Managerial and Confidential Employees; Prohibition and Rationale
FACTS:
The Collective Bargaining Agreement (CBA) between Metrolab and the Union
expired. The negotiations for a new CBA, however, ended in a
deadlock.Consequently, on 23 August 1991, the Union filed a notice of strike against
Metrolab and Metro Drug Inc. The parties failed to settle their dispute despite the
conciliation efforts of the NCMB so the SOLE took over the case.
The SOLE issued an Omnibus Resolution, with an order, among others,directing the
parties to incorporate in their respective CBA the clarifications contained in said
Omnibus Resolution. In the assailed Omnibus Resolution, Labor Secretary Confesor
also ruled that executive secretaries are excluded from the closed-shop provision of
the CBA, but not from the bargaining unit.
ISSUE: W/N the SOLE committed GAD in including the executive secretaries as part
of the bargaining unit of rank and file employees.
HELD:YES.
Metrolab maintained that executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager, Product Development
Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and
Production Manager, who are all members of the company’s Management
Committee should not only be exempted from the closed-shop provision but should
be excluded from membership in the bargaining unit of the rank and file employees
as well on grounds that their executive secretaries are confidential employees,
having access to “vital labor information.”
The Court concurred with Metrolab.
Although Article 245 of the Labor Codelimits the ineligibility to join, form and assist
any labor organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their positions or
nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential records.
The rationale behind the exclusion of confidential employees from the bargaining
unit of the rank and file employees and their disqualification to join any labor
organization was discussed in a lot of cases:
Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez:
x x x The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter
might not be assured of their loyalty to the Union in view of evident conflict of
36
interests. The Union can also become company-dominated with the presence
of managerial employees in Union membership.”
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale
applicable to confidential employees:
This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s)
may act as a spy or spies of either party to a collective bargaining
agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow the confidential employees to join the existing Union
of the rank-and-file would be in violation of the terms of the Collective
Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.”
National Association of Trade Union - Republic Planters Bank Supervisors Chapter v.
Torres we declared:
. . . As regards the other claim of respondent Bank that Branch
Managers/OICs, Cashiers and Controllers are confidential employees, having
control, custody and/ or access to confidential matters, e.g., the branch’s cash
position, statements of financial condition, vault combination, cash codes for
telegraphic transfers, demand drafts and other negotiable instruments,
pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody,
this claim is not even disputed by petitioner. A confidential employee is one
entrusted with confidence on delicate matters, or with the custody, handling,
or care and protection of the employer’s property. While Art. 245 of the Labor
Code singles out managerial employees as ineligible to join, assist or form any
labor organization, under the doctrine of necessary, implication, confidential
employees are similarly disqualified. . . .
xxx xxx xxx.
. . .(I)n the collective bargaining process, managerial employees are supposed
to be on the side of the employer, to act as its representatives, and to see to it
that its interest are well protected. The employer is not assured of such
protection if these employees themselves are union members. Collective
bargaining in such a situation can become one-sided. It is the same reason
that impelled this Court to consider the position of confidential employees as
included in the disqualification found in Art. 245 as if the disqualification of
confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves,
then they could be governed by their own motives rather than the interest of
the employers. Moreover, unionization of confidential employees for the
purpose of collective bargaining would mean the extension of the law to
persons or individuals who are supposed to act “in the interest of the
 employers. It is not farfetched that in the course of collective bargaining, they
might jeopardize that interest which they are duty-bound to protect. . . .
Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, we ruled that:
Upon the other hand, legal secretaries are neither managers nor
supervisors. Their work is basically routinary and clerical. However, they
should be differentiated from rank-and-file employees because they are tasked
with, among others, the typing of legal documents, memoranda and
correspondence, the keeping of records and files, the giving of and receiving
notices, and such other duties as required by the legal personnel of the
corporation. Legal secretaries therefore fall under the category of confidential
employees. . . .
The Union on the other hand makes the assurancesthat there would be no danger
of espionage or that the executive secretaries will not be participating in the
decision making of the Union. But the Court said that the dangers sought to be
prevented, particularly the threat of conflict of interest and espionage, are not
eliminated by non-membership of Metrolab’s executive secretaries or confidential
employees in the Union. Forming part of the bargaining unit, the executive
secretaries stand to benefit from any agreement executed between the Union and
Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal
interests and their duty as confidential employees to act for and in behalf of
Metrolab. They do not have to be union members to affect or influence either side.
Finally, confidential employees cannot be classified as rank and file. As previously
discussed, the nature of employment of confidential employees is quite distinct
from the rank and file, thus, warranting a separate category. Excluding confidential
employees from the rank and file bargaining unit, therefore, is not tantamount to
discrimination.
DISPOSITIVE:
WHEREFORE, premises considered, the petition is partially GRANTED. The
resolutions of public respondent Secretary of Labor dated 14 April 1992 and 25
January 1993 are hereby MODIFIED to the extent that executive secretaries of
petitioner Metrolab’s General Manager and the executive secretaries of the
members of its Management Committee are excluded from the bargaining unit of
petitioner’s rank and file employees.SO ORDERED.

37
G.R. No. 79025. December 29, 1989.
BENGUET ELECTRIC COOPERATIVE, INC., petitioner, vs. HON. PURA FERRER-
CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES
LABOR UNION, respondents.
Facts:
Beneco Worker's Labor Union-Association of Democratic Labor Organizations
(BWLU- ADLO) filed a petition for direct certification as the sole and exclusive
bargaining representative of all the rank and file employees of Benguet Electric
Cooperative, Inc. (BENECO) alleging that BENECO has in its employ 214 rank and file
employees; that 198 or 92.5% of these employees have supported the filing of the
petition; that no certification election has been conducted for the last 12 months;
that there is no existing collective bargaining representative of the rank and file
employees sought to represented by BWLU- ADLO; and, that there is no collective
bargaining agreement in the cooperative.
An opposition to the petition was filed by the Beneco Employees Labor Union
(BELU) contending that it was certified as the sole and exclusive bargaining
representative of the subject workers pursuant to an order issued by the med-
arbiter; that pending resolution by the NLRC are two cases it filed against BENECO
involving bargaining deadlock and unfair labor practice; and, that the pendency of
these cases bars any representation question.
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is
a non-profit electric cooperative engaged in providing electric services to its
members and patron-consumers; and, that the employees sought to be represented
by BWLU-ADLO are not eligible to form, join or assist labor organizations of their
own choosing because they are members and joint owners of the cooperative.
The med-arbiter issued an order giving due course to the petition for certification
election. However, the med-arbiter limited the election among the rank and file
employees of BENECO who are non-members thereof and without any involvement
in the actual ownership of the cooperative. The med-arbiter found that there are 37
employees who are not members and without any involvement in the actual
ownership of the cooperative.
BELU and BENECO appealed but the same was dismissed for lack of merit. So
BENECO filed with the SC a petition for certiorari which the SC dismissed for lack of
merit in a minute resolution dated April 1986.
The ordered certification election was held in October 1986. Prior to the conduct
thereof BENECO's counsel verbally manifested that "the cooperative is protesting
that employees who are members-consumers are being allowed to vote when they
are not eligible to be members of any labor union for purposes of collective
bargaining; much less, to vote in this certification election." BENECO submitted a
certification showing that only 4 employees are not members of BENECO and
insisted that only these employees are eligible to vote in the certification election.
Canvass of the votes showed that BELU garnered 49 of the 83 "valid" votes cast.
38
Thereafter BENECO formalized its verbal manifestation by filing a Protest. The med-
arbiter dismissed the protest. BLR director Calleja affirmed the med-arbiter's order
and certified BELU as the sole and exclusive bargaining agent of all the rank and file
employees of BENECO.
Issue: W/N employees of a cooperative are qualified to form or join a labor
organization for purposes of collective bargaining. NO
Ratio:
Under Article 256 LC, to have a valid certification election, "at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining agent of
all workers in the unit." BENECO asserts that the certification election held was null
and void since members-employees who are not eligible to form and join a labor
union for purposes of collective bargaining were allowed to vote therein.
The issue has already been resolved and clarified in the case of Cooperative Rural
Bank of Davao City, Inc. vs. Ferrer Calleja, et al. and reiterated in the cases of
Batangas-Electric Cooperative Labor Union v. Young, et al. and San Jose City Electric
Service Cooperative, Inc. v. Ministry of Labor and Employment, et al. wherein the
Court had stated that the right to collective bargaining is not available to an
employee of a cooperative who at the same time is a member and co-owner
thereof. With respect, however, to employees who are neither members nor co-
owners of the cooperative they are entitled to exercise the rights to self-
organization, collective bargaining and negotiation as mandated by the Constitution
and applicable statutes.
Calleja argues that to deny the members of petitioner cooperative the right to form,
assist or join a labor union of their own choice for purposes of collective bargaining
would amount to a patent violation of their right to self-organization.
The above contention is untenable. Contrary to respondents' claim, the fact that the
members-employees of BENECO do not participate in the actual management of the
cooperative does not make them eligible to form, assist or join a labor organization
for the purpose of collective bargaining with petitioner. The Court's ruling in the
Davao City case that members of cooperative cannot join a labor union for purposes
of collective bargaining was based on the fact that as members of the cooperative
they are co-owners thereof. As such, they cannot invoke the right to collective
bargaining for "certainly an owner cannot bargain with himself or his co-owners." It
is the fact of ownership of the cooperative, and not involvement in the management
thereof, which disqualifies a member from joining any labor organization within the
cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a
labor organization for the purpose of collective bargaining.
Respondent union further claims that if nominal ownership in a cooperative is
"enough to take away the constitutional protections afforded to labor, then there
would be no hindrance for employers to grant, on a scheme of generous profit
sharing, stock bonuses to their employees and thereafter claim that since their
employees are stockholders, albeit in a minimal and involuntary manner, they are
now also co-owners and thus disqualified to form unions."
The above contention is based on the erroneous presumption that membership in a
cooperative is the same as ownership of stocks in ordinary corporations. While
cooperatives may exercise some of the rights and privileges given to ordinary
corporations provided under existing laws, such cooperatives enjoy other privileges
not granted to the latter. Similarly, members of cooperatives have rights and
obligations different from those of stockholders of ordinary corporations. It was
precisely because of the special nature of cooperatives, that the Court held in the
Davao City case that members-employees thereof cannot form or join a labor union
for purposes of collective bargaining. The Court held that:
A cooperative is by its nature different from an ordinary business concern
being run either by persons, partnerships, or corporations. Its owners
and/or members are the ones who run and operate the business while the
others are its employees. As above stated, irrespective of the number of
shares owned by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. An employee therefore of such
a cooperative who is a member and co-owner thereof cannot invoke the
right to collective bargaining for certainly an owner cannot bargain with
himself or his co-owners.
Article 256 of the Labor Code provides, among others, that:
To have a valid, election, at least a majority of all eligible voters in the unit
must have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent of all
workers in the unit.
In this case it cannot be determined whether or not respondent union was duly
elected by the eligible voters of the bargaining unit since even employees who are
ineligible to join a labor union within the cooperative because of their membership
therein were allowed to vote in the certification election. Considering the foregoing,
the Court finds that respondent director committed grave abuse of discretion in
certifying respondent union as the sole and exclusive bargaining representative of
the rank and file employees of petitioner cooperative.

39
G.R. No. 94045 September 13, 1991 corporations. Its owners and/or members are the ones who run and
CENTRAL NEGROS ELECTRIC COOPERATIVE, INC. (CENECO), petitioner, vs. operate the business while the others are its employees.
HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, and  An employee therefore of such a cooperative who is a member and co-
CENECO UNION OF RATIONAL EMPLOYEES (CURE), respondents. owner thereof cannot invoke the right to collective bargaining for certainly
FACTS: an owner cannot bargain with himself or his co-owners. Employees of
 On August 15, 1987, CENECO entered into a collective bargaining cooperatives who are themselves members of the cooperative have no
agreement with CURE, a labor union representing its rank-and-file right to form or join labor organizations for purposes of collective
employees, providing for a term of three years retroactive to April 1, 1987 bargaining for being themselves co-owners of the cooperative.
and extending up to March 31, 1990. On December 28, 1989, CURE wrote  However, in so far as it involves cooperatives with employees who are not
CENECO proposing that negotiations be conducted for a new collective members or co-owners thereof, certainly such employees are entitled to
bargaining agreement (CBA). exercise the rights of all workers to organization, collective bargaining,
 On January 18, 1990, CENECO denied CURE’s request on the ground that, negotiations and others as are enshrined in the Constitution and existing
under applicable decisions of the Supreme Court, employees who at the laws of the country.
same time are members of an electric cooperative are not entitled to form
or join a union.
 Prior to the submission of the proposal for CBA renegotiation, CURE
members, in a general assembly held on December 9, 1989, approved
Resolution No. 35 whereby it was agreed that ‘tall union members shall
withdraw, retract, or recall the union members’ membership from Central
Negros Electric Cooperative, Inc. in order to avail (of) the full benefits
under the existing Collective Bargaining Agreement entered into by and
between CENECO and CURE, and the supposed benefits that our union may
avail of under the renewed CBA.
 However, the withdrawal from membership was denied by CENECO on
February 27, 1990 under Resolution No. 90.
ISSUE: WON the employees of CENECO who withdrew their membership from the
cooperative are entitled to form or join CURE for purposes of the negotiations for a
collective bargaining agreement proposed by the latter.

Held:
The right of the employees to self-organization is a compelling reason why their
withdrawal from the cooperative must be allowed. As pointed out by CURE, the
resignation of the member- employees is an expression of their preference for union
membership over that of membership in the cooperative. The avowed policy of the
State to afford fall protection to labor and to promote the primacy of free collective
bargaining mandates that the employees’ right to form and join unions for purposes
of collective bargaining be accorded the highest consideration.
Thus, member employees of a cooperative may withdraw as members of the
cooperative in order to join labor union. Membership in a cooperative is voluntary;
inherent in it is the right not to join.
 A cooperative, therefore, is by its nature different from an ordinary
business concern being run either, by persons, partnerships or
40
G.R. No. 172101 November 23, 2007
REPUBLIC OF THE PHILIPPINES, represented by the SOCIAL SECURITY
COMMISSION and SOCIAL SECURITY SYSTEM, Petitioners, vs. ASIAPRO
COOPERATIVE, Respondent.
Facts:
Asiapro, as a cooperative, is composed of owners-members. Under its by-laws,
owners-members are of two categories: (1) regular member, who is entitled to all
the rights and privileges of membership; and (2) associate member, who has no
right to vote and be voted upon. Its primary objectives are to provide savings and
credit facilities and to develop other livelihood services for its owners-members.
Respondent entered into Service Contracts with Stanfilco - a division of DOLE
Philippines, Inc. The owners-members do not receive compensation or wages from
the cooperative. Instead, they receive a share in the service surplus which the
cooperative earns from different areas of trade it engages in, such as the Service
Contracts with Stanfilco. The owners-members get their income from the service
surplus generated by the quality and amount of services they rendered, which is
determined by the Board of Directors of the cooperative.
In order to enjoy the benefits under the Social Security Law of 1997, the owners-
members of the cooperative who were assigned to Stanfilco requested the services
of the latter to register them with petitioner SSS as self-employed and to remit their
contributions as such.
On September 2002, SSS informed the cooperative that based on the Service
Contracts it executed with Stanfilco, the cooperative is actually a manpower
contractor supplying employees to Stanfilco and for that reason, it is an employer of
its owners-members. Thus, the cooperative should register itself as an employer and
make the corresponding remittance of premium contributions in accordance with
the Social Security Law. Respondent asserted that it is not an employer because its
owners-members are the cooperative itself; hence, it cannot be its own employer.
SSS filed a Petition before SSC against the respondent cooperative and Stanfilco
praying that the respondent cooperative or, in the alternative, Stanfilco be directed
to register as an employer and to remit the necessary contributions. Respondent
filed a Motion to Dismiss alleging that no employer-employee relationship exists
between it and its owners-members, thus, petitioner SSC has no jurisdiction.
SSC denied the Motion to Dismiss. Respondent then filed a Petition for Certiorari
before the Court of Appeals. On January 2006, the Court of Appeals rendered a
Decision granting the petition filed by the respondent cooperative.
41
Issues:
1. WON SSC has jurisdiction over the petition-complaint
2. WON EE-ER relationship exists
Held / ratio:
Granted, orders of the SSC reinstated.
1. Yes
SSC’s jurisdiction is stated in Section 5 of Republic Act No. 8282 as well as in
Section 1, Rule III of the 1997 SSS Revised Rules of Procedure.
Section 5 of Republic Act No. 8282 provides:
SEC. 5. Settlement of Disputes. – (a) Any dispute arising under this Act with
respect to coverage, benefits, contributions and penalties thereon or any
other matter related thereto, shall be cognizable by the Commission, x x x.
(Emphasis supplied.)
Section 1, Rule III of the 1997 SSS Revised Rules of Procedure states:
Section 1. Jurisdiction. – Any dispute arising under the Social Security Act
with respect to coverage, entitlement of benefits, collection and settlement
of contributions and penalties thereon, or any other matter related
thereto, shall be cognizable by the Commission after the SSS through its
President, Manager or Officer-in-charge of the
Department/Branch/Representative Office concerned had first taken action
thereon in writing. (Emphasis supplied.)
Any issue regarding the compulsory coverage of the SSS is well within the
exclusive domain of the petitioner SSC. The mandatory coverage under the SSS
Law is premised on the existence of an employer-employee relationship except
in cases of compulsory coverage of the self-employed.
The allegations in the complaint, not the defenses set up in the Answer or in
the Motion to Dismiss, determine which court has jurisdiction over an action;
otherwise, the question of jurisdiction would depend almost entirely upon the
defendant. Moreover, it is well-settled that once jurisdiction is acquired by the
court, it remains with it until the full termination of the case. The said principle
may be applied even to quasi-judicial bodies.
Based on the allegations in the petition-complaint filed before the petitioner
SSC, the case clearly falls within its jurisdiction. Although the Answer with
Motion to Dismiss filed by the respondent cooperative challenged the
jurisdiction of the petitioner SSC on the alleged lack of employer-employee
 relationship between itself and its owners-members, the same is not enough to
deprive the petitioner SSC of its jurisdiction over the petition-complaint filed
before it.
2. In determining the existence of an employer-employee relationship, the
following elements are considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever means; (3) the power of
dismissal; and (4) the power to control the worker’s conduct, with the latter
assuming primacy in the overall consideration.
All the aforesaid elements are present in this case.
First. It is provided in the Service Contracts that it is the cooperative which has
the exclusive discretion in the selection and engagement of the owners-
members as well as its team leaders who will be assigned at Stanfilco.
Second. Wages are defined as "remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained, on
a time, task, piece or commission basis, or other method of calculating the
same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for service
rendered or to be rendered." In this case, the weekly stipends or the so-called
shares in the service surplus given by the cooperative to its owners-members
were in reality wages, as the same were equivalent to an amount not lower
than that prescribed by existing labor laws, rules and regulations, including the
wage order applicable to the area and industry; or the same shall not be lower
than the prevailing rates of wages. It cannot be doubted then that those
stipends or shares in the service surplus are indeed wages, because these are
given to the owners-members as compensation in rendering services to
respondent cooperative’s client, Stanfilco.
Third. It is also stated in the Service Contracts that it is the cooperative which
has the power to investigate, discipline and remove the owners-members and
its team leaders who were rendering services at Stanfilco.
Fourth, in the case at bar, it is the cooperative which has the sole control over
the manner and means of performing the services under the Service Contracts
with Stanfilco as well as the means and methods of work. Also, the cooperative
is solely and entirely responsible for its owners-members, team leaders and
other representatives at Stanfilco.
42
It is true that the Service Contracts provide that there shall be no employer-
employee relationship between the respondent cooperative and its owners-
members. This Court cannot give the said provision force and effect.
The existence of an employer-employee relationship cannot be negated by
expressly repudiating it in a contract, when the terms and surrounding
circumstances show otherwise. The employment status of a person is defined
and prescribed by law and not by what the parties say it should be.
*** DISCUSSION IN RE: SYLLABUS TOPIC STARTS HERE***
This Court is not unmindful of the pronouncement it made in Cooperative Rural
Bank of Davao City, Inc. v. Ferrer-Calleja wherein it held that:
A cooperative, is by its nature different from an ordinary business concern,
being run either by persons, partnerships, or corporations. Its owners
and/or members are the ones who run and operate the business while the
others are its employees x x x.
An employee therefore of such a cooperative who is a member and co-owner
thereof cannot invoke the right to collective bargaining for certainly an owner
cannot bargain with himself or his co-owners. Employees of cooperatives who
are themselves members of the cooperative have no right to form or join labor
organizations for purposes of collective bargaining for being themselves co-
owners of the cooperative.
However, in so far as it involves cooperatives with employees who are not
members or co-owners thereof, certainly such employees are entitled to
exercise the rights of all workers to organization, collective bargaining,
negotiations and others as are enshrined in the Constitution and existing laws
of the country.
The situation in the aforesaid case is different from the present case. In the
instant case, there is no issue regarding an owner-member’s right to bargain
collectively with the cooperative. The question involved here is whether an
employer-employee relationship can exist between the cooperative and an
owner-member.
A cooperative acquires juridical personality upon its registration with the
Cooperative Development Authority. It has its Board of Directors, which directs
and supervises its business. With that, a cooperative can be likened to a
corporation with a personality separate and distinct from its owners-members.
 Consequently, an owner-member of a cooperative can be an employee of the
latter and an employer-employee relationship can exist between them.

It is not disputed that the respondent cooperative had registered itself with the
Cooperative Development Authority. In its by-laws, its Board of Directors
directs, controls, and supervises the business and manages the property of the
respondent cooperative. Therefore, it is completely logical that the respondent
cooperative, as a juridical person represented by its Board of Directors, can
enter into an employment with its owners-members.

43
Mactan Worker’s Union, Tomas Ferrer, President, MWU vs Don Ramon Aboitiz, more specifically the working men and women, not labor organizations. Labor
President, Cebu Shipyard & Engineering Works, Association Labor Union organizations, as the Court stated, are merely the instrumentalities through which
Facts: the welfare of employees may be promoted and fostered, and thereforeare
Cebu Shipyard was found to have been employing laborers and employees the raisonsd'etre of labor unions. Utmost care should be taken to avoid having an
belonging to rival labor unions Mactan Workers Union or MWU (which has 72 of its intransigent attitude towards rival labor unions which may result in injustices done
members working for Cebu Shipyard) and Associated Labor Union or ALU. On to fellow employees.
November 1964, ALU entered into a CBA, with one of the provisions being an
agreement where the Company agrees to give a profit-sharing bonus to its laborers
and employees, to be taken from 10% of its net profits derived from its operations
in Lapulapu City, to be delivered in two installments payable in March and in June.
Also, it must be noted that there was also a clause in the agreement, stating that if a
laborer or employee of the Company does not want to accept the profit-sharing
bonus which the said employee or laborer is entitled under the agreement, it shall
be the duty of the ALU to return the money received by it as profit-sharing bonus to
the Company within 60 days from the receipt by the ALU from the Company of the
said profit-sharing bonus.'
In compliance to the agreement, the Company delivered the bonuses to the ALU for
distribution to the employees and laborers on March 1965. However, on June 1965,
the MWU members failed to receive the second installment of their bonus as it was
stated that “they did not like to go to the office of the ALU to collect their shares”.
Therefore, according to the terms of the agreement, the uncollected shares
amounting to PHP4,035.82 was returned to Cebu Shipyard. Further to this, the ALU
advised Cebu Shipyard to not give MWU their uncollected share, otherwise the ALU
will take steps to “protect the interests of its members”. As such, the Company did
not pay MWU but deposited the amount with the Labor Adminstrator.
A case was filed by MWU with the lower court, which decided in favor of MWU’s
receipt of the PHP4,035.82, hence the appeal by ALU to the SC.
Issue: W/N MWU is entitled to the terms and conditions bargained for by ALU. YES.
Ratio:
The Court, in affirming the lower court’s ruling, held that it is a well-settled doctrine
that the benefits of a collective bargaining agreement extend not just to the
laborers and employees in the collective bargaining unit, but also to those who do
not belong to the chosen bargaining labor organization. The labor union that gets
the majority vote as the exclusive bargaining representative does not act for its
members alone. It represents all the employees in such a bargaining unit. It is not to
be indulged in any attempt on its part to disregard the rights of non-members,
which the Court found was what ALU was doing to the members of MWU. With the
rights of the MWU being clear, the enforcement of the same was all that was
needed to be done.
The Court then discusses that, while it is understandable for labor unions to
campaign for ascendancy in a shop, plant or industry, resulting in bitter feuds, it
should not be forgotten that what is entitled to constitutional protection is labor, or
44