RIGHT TO SELF ORGANIZATION

[G.R. No. 102130. July 26, 1994.]

GOLDEN FARMS, INC., petitioner, vs. THE HONORABLE SECRETARY OF LABOR and THE
PROGRESSIVE FEDERATION OF LABOR, respondents.
PUNO, J:

Facts:

Petitioner Golden Farms, Inc., is a corporation engaged in the production and marketing of bananas for export. On February 27, 1992,
private respondent Progressive Federation of Labor (PFL) filed a petition before the Med-Arbiter praying for the holding of a certification
election among the monthly paid office and technical rank-and-file employees of petitioner Golden Farms.

PETITIONER: moved to dismiss the petition on three (3) grounds. First, respondent PFL failed to show that it was organized as a
chapter within petitioner's establishment. Second, there was already an existing collective bargaining agreement between the rank-and-
file employees represented by the National Federation of Labor (NFL) and petitioner. And third, the employees represented by PFL had
allegedly been disqualified by this Court from bargaining with management in Golden Farms, Inc., vs. Honorable Director Pura Ferrer-
Calleja.

RESPONDENT: PFL opposed petitioner's Motion to Dismiss. It countered that the monthly paid office and technical employees should
be allowed to form a separate bargaining unit because they were expressly excluded from coverage in the Collecting Bargaining
Agreement (CBA) between petitioner and NFL. It also contended that the case invoked by petitioner was inapplicable to the present
case.

PETITIONER; REPLY: argued that the monthly paid office and technical employees should have joined the existing collective
bargaining unit of the rank-and-file employees if they are not managerial employees.

MED-ARBITER: granted the petition and ordered that a certification election be conducted.

PET: Appealed, denied: lack of merit. Motion for recon, denied. THUS, certiorari.

Issue:

1. WON the creation of an additional bargaining unit for certain rank and file employees will not only split the existing one but will also
negate the principle of res judicata.

Held:

The monthly paid office and technical rank-and-file employees of petitioner Golden Farms enjoy the constitutional right to
self-organization and collective bargaining. A "bargaining unit” has been defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity
to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law. The community or mutuality of interest is therefore the essential criterion in the grouping. "And this is so because
'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights.’”

In the case at bench, the evidence established that the monthly paid rank-and-file employees of petitioner primarily perform
administrative or clerical work. In contradistinction, the petitioner's daily paid rank-and-file employees mainly work in the cultivation of
bananas in the fields. It is crystal clear the monthly paid rank-and-file employees of petitioner have very little in common with its daily
paid rank-and-file employees in terms of duties and obligations, working conditions, salary rates, and skills.

To be sure, the said monthly paid rank-and-file employees have even been excluded from the bargaining unit of the daily paid rank-
and-file employees. This dissimilarity of interests warrants the formation of a separate and distinct bargaining unit for the monthly paid
rank-and-file employees of the petitioner. To rule otherwise would deny this distinct class of employees the right to self-organization for
purposes of collective bargaining. Without the shield of an organization, it will also expose them to the exploitations of management.

Petitioner next contends that these monthly paid office and technical employees are managerial employees. They allegedly include
those in the accounting and personnel department, cashier, and other employees holding positions with access to classified
information. We are not persuaded. The monthly paid office and technical employees, accountants, and cashiers of the petitioner are
not managerial employees for they do not participate in policy-making but are given cut out policies to execute and standard practices
to observe. In the main, the discharge of their duties does not involve the use of independent judgment.

Our decision in Golden Farms, Inc., vs. Honorable Pura Ferrer-Calleja, op. cit., does not pose any obstacle in holding a certification
election among petitioner's monthly paid rank-and file employees. The issue brought to fore in that case was totally different, i.e.,
whether or not petitioner's confidential employees, considering the nature of their work, should be included in the bargaining unit of the
daily paid rank-and-file employees. In the case at bench, the monthly paid rank-and-file employees of petitioner are being separated as
a bargaining unit from its daily paid rank-and-file and employees, on the ground that they have different interest to protect. The principle
of res judicata is, therefore, inapplicable.

Finally, we note that it was Petitioner Company that filed the motion to dismiss the petition for election. The general rule is that an
employer has no standing to question a certification election since this is the sole concern of the workers. Law and policy demand that
employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free
from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the employees
alone and to no other.

UNFAIR LABOR PRACTICES

[G.R. No. 112661. May 30, 2001.]

SIMEON DE LEON, et al., petitioners, vs . NATIONAL LABOR RELATIONS COMMISSION (NLRC), and
FORTUNE TOBACCO CORPORATION and/or MAGNUM INTEGRATED SERVICES, INC. (formerly
FORTUNE INTEGRATED SERVICES, INC.), respondents.
PUNO, J:

Facts:

On August 23, 1980, Fortune Tobacco Corporation (FTC) and Fortune Integrated Services, Inc. (FISI) entered into a contract for
security services where the latter undertook to provide security guards for the protection and security of the former. The petitioners
were among those engaged as security guards pursuant to the contract.

On February 1, 1991, the incorporators and stockholders of FISI sold out lock, stock and barrel to a group of new stockholders by
executing for the purpose a "Deed of Sale of Shares of Stock". On the same date, the Articles of Incorporation of FISI was amended
changing its corporate name to Magnum Integrated Services, Inc. (MISI). A new by-laws was likewise adopted and approved by the
Securities and Exchange Commission on June 4, 1993.

On October 15, 1991, FTC terminated the contract for security services which resulted in the displacement of some five hundred eighty
two (582) security guards assigned by FISI/MISI to FTC, including the petitioners in this case. FTC engaged the services of two (2)
other security agencies, Asian Security Agency and Ligalig Security Services, whose security guards were posted on October 15, 1991
to replace FISI's security guards.

Sometime in October 1991, the Fortune Tobacco Labor Union, an affiliate of the National Federation of Labor Unions (NAFLU), and
claiming to be the bargaining agent of the security guards, sent a Notice of Strike to FISI/MISI. On November 14, 1991, the members of
the union which include petitioners picketed the premises of FTC. The Regional Trial Court of Pasig, however, issued a writ of
injunction to enjoin the picket. On November 29, 1991, Simeon de Leon, together with sixteen (16) other complainants instituted the
instant case before the Arbitration Branch of the NLRC.

PETITIONERS: alleged that they were regular employees of FTC which was also using the corporate names Fortune Integrated
Services, Inc. and Magnum Integrated Services, Inc.

They were assigned to work as security guards at the company's main factory plant, its tobacco redrying plant and warehouse. They
averred that they performed their duties under the control and supervision of FTC's security supervisors. Their services, however, were
severed in October 1991 without valid cause and without due process. Petitioners claimed that their dismissal was part of respondents'
design to bust their newly-organized union which sought to enforce their rights under the Labor Standards law.

RESPONDENT FTC: maintained that there was no employer-employee relationship between FTC and petitioners.

It said that at the time of the termination of their services, petitioners were the employees of MISI which was a separate and distinct
corporation from FTC. Hence, petitioners had no cause of action against FTC.
RESPONDENT FISI: denied the charge of illegal dismissal and unfair labor practice.

It argued that petitioners were not dismissed from service but were merely placed on floating status pending re-assignment to other
posts. It alleged that the temporary displacement of petitioners was not due to its fault but was the result of the pretermination by FTC
of the contract for security services.

LA: respondents liable for the charges. Rejecting FTC's argument that there was no employer-employee relationship between FTC and
petitioners, he ruled that FISI and FTC should be considered as a single employer.

He observed that not long after the stockholders of FISI sold all their stocks to a new set of stockholders, FTC, terminated the contract
of security services and engaged the services of two other security agencies. FTC did not give any reason for the termination of the
contract. The Labor Arbiter gave credence to petitioners' theory that respondents' precipitate termination of their employment was
intended to bust their union.

On Appeal, NLRC: reversed and set aside the decision of the Labor Arbiter.

First, it held that the Labor Arbiter erred in applying the "single employer" principle and concluding that there was an employer-
employee relationship between FTC and FISI on one hand, and petitioners on the other hand. It found that at the time of the termination
of the contract of security services on October 15, 1991, FISI which, at that time, had been renamed Magnum Integrated Services, Inc.
had a different set of stockholders and officers from that of FTC. They also had separate offices. The NLRC held that the principle of
"single employer" and the doctrine of piercing the corporate veil could not apply under the circumstances.

It further ruled that the proximate cause for the displacement of petitioners was the termination of the contract for security services by
FTC on October 15, 1991. FISI could not be faulted for the severance of petitioners' assignment at the premises of FTC. Consequently,
the NLRC held that the charge of illegal dismissal had no basis. As regards the charge of unfair labor practice, the NLRC found that
petitioners who had the burden of proof failed to adduce any evidence to support their charge of unfair labor practice against
respondents.

Issue:

WON respondents were guilty of Unfair Labor Practice

Held:

An examination of the facts of this case reveals that there is sufficient ground to conclude that respondents were guilty of interfering
with the right of petitioners to self-organization which constitutes unfair labor practice under Article 248 of the Labor Code. 8 Petitioners
have been employed with FISI since the 1980s and have since been posted at the premises of FTC — its main factory plant, its
tobacco redrying plant and warehouse. It appears from the records that FISI, while having its own corporate identity, was a mere
instrumentality of FTC, tasked to provide protection and security in the company premises. The records show that the two corporations
had identical stockholders and the same business address. FISI also had no other clients except FTC and other companies belonging
to the Lucio Tan group of companies. Moreover, the early payslips of petitioners show that their salaries were initially paid by FTC.

To enforce their rightful benefits under the laws on Labor Standards, petitioners formed a union which was later certified as bargaining
agent of all the security guards. On February 1, 1991, the stockholders of FISI sold all their participation in the corporation to a new set
of stockholders which renamed the corporation Magnum Integrated Services, Inc. On October 15, 1991, FTC, without any reason,
preterminated its contract of security services with MISI and contracted two other agencies to provide security services for its premises.
This resulted in the displacement of petitioners. As MISI had no other clients, it failed to give new assignments to petitioners. Petitioners
have remained unemployed since then. All these facts indicate a concerted effort on the part of respondents to remove petitioners from
the company and thus abate the growth of the union and block its actions to enforce their demands in accordance with the Labor
Standards laws.

We are not persuaded by the argument of respondent FTC denying the presence of an employer-employee relationship. We find that
the Labor Arbiter correctly applied the doctrine of piercing the corporate veil to hold all respondents liable for unfair labor practice and
illegal termination of petitioners' employment. It is a fundamental principle in corporation law that a corporation is an entity separate and
distinct from its stockholders and from other corporations to which it is connected. However, when the concept of separate legal entity is
used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as an association of
persons, or in case of two corporations, merge them into one. The separate juridical personality of a corporation may also be
disregarded when such corporation is a mere alter ego or business conduit of another person.
In the case at bar, it was shown that FISI was a mere adjunct of FTC. FISI, by virtue of a contract for security services, provided FTC
with security guards to safeguard its premises. However, records show that FISI and FTC have the same owners and business
address, and FISI provided security services only to FTC and other companies belonging to the Lucio Tan group of companies. The
purported sale of the shares of the former stockholders to a new set of stockholders who changed the name of the corporation to
Magnum Integrated Services, Inc. appears to be part of a scheme to terminate the services of FISI's security guards posted at the
premises of FTC and bust their newly-organized union which was then beginning to become active in demanding the company's
compliance with Labor Standards laws. Under these circumstances, the Court cannot allow FTC to use its separate corporate
personality to shield itself from liability for illegal acts committed against its employees. Thus, we find that the termination of petitioners'
services was without basis and therefore illegal.

CERTIFICATION ELECTION

[G.R. No. 121084. February 19, 1997.]

TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner, vs. TOYOTA MOTOR PHILIPPINES
CORPORATION LABOR UNION AND THE SECRETARY OF LABOR AND EMPLOYMENT, respondents.
KAPUNAN, J:

Facts:

On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union (TMPCLU[Respondent]) filed a petition for certification
election with the Department of Labor, National Capital Region, for all rank-and-file employees of the Toyota Motor
Corporation[Petitioner].

PETITIONER: filed a Position Paper on February 23, 1993 seeking the denial of the issuance of an Order directing the holding of a
certification election on two grounds: first, that the respondent union, being "in the process of registration" had no legal personality to
file the same as it was not a legitimate labor organization as of the date of the filing of the petition; and second, that the union was
composed of both rank-and-file and supervisory employees in violation of law.

Attached to the position paper was a list of union members and their respective job classifications, indicating that many of the
signatories to the petition for certification election occupied supervisory positions and were not in fact rank-and-file employees.

MED-ARBITER; Paterno D. Adap: dismissed respondent union's petition for certification election for lack of merit.

In his March 8, 1993 Order, the Med-Arbiter found that the labor organization's membership was composed of supervisory and rank-
and-file employees in violation of Article 245 of the Labor Code, 4 and that at the time of the filing of its petition, respondent union had
not even acquired legal personality yet.

APPEAL; THE OFFICE OF THE SECRETARY OF LABOR: Set aside the Med-Arbiter's Order of March 3, 1993, and directed the
holding of a certification election among the regular rank-and-file employees of Toyota Motor Corporation.

PETITIONER; MOTION FOR RECONSIDERATION: reiterating its claim that as of the date of filing of petition for certification election,
respondent TMPCLU had not yet acquired the status of a legitimate labor organization as required by the Labor Code, and that the
proposed bargaining unit was inappropriate.

SECRETARY OF LABOR; MR: set aside its earlier resolution and remanded the case to the Med-Arbiter concluding that the issues
raised by petitioner both on appeal and in its motion for reconsideration were factual issues requiring further hearing and production of
evidence.

MED-ARBITER; Brigida C. Fodrigon; SEPT. 28, 1994: respondent TMPCLU could not have "acquire[d] legal personality at the time of
the filing of (its) petition."

SECRETARY OF LABOR; APR. 20, 1996: issued a new Resolution, "directing the conduct of a certification election among the regular
rank-and-file employees of the Toyota Motor Philippines Corporation.

Hence, this special civil action for certiorari, where petitioner contends that "the Secretary of Labor and Employment committed grave
abuse of discretion amounting to lack or excess of jurisdiction in reversing, contrary to law and facts the findings of the Med-Arbiters.”

Issue:
WON the inclusion of the prohibited mix of rank-and-file and supervisory employees in the roster of members and officers of the union
cannot be cured by a simple inclusion-exclusion proceeding; YES

WON the respondent union had no legal standing at the time of the filing of its petition for certification election.

Held:

The purpose of every certification election is to determine the exclusive representative of employees in an appropriate bargaining unit
for the purpose of collective bargaining. A certification election for the collective bargaining process is one of the fairest and most
effective ways of determining which labor organization can truly represent the working force. In determining the labor organization
which represents the interests of the workforce, those interests must be, as far as reasonably possible, homogeneous, so as to
genuinely reach the concerns of the individual members of a labor organization.

In Belyca Corporation v. Ferrer Calleja, we defined the bargaining unit as "the legal collectivity for collective bargaining purposes whose
members have substantially mutual bargaining interests in terms and conditions of employment as will assure to all employees their
collective bargaining rights." This in mind, the Labor Code has made it a clear statutory policy to prevent supervisory employees from
joining labor organizations consisting of rank-and-file employees as the concerns which involve members of either group are normally
disparate and contradictory.

Labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or
purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.

The Labor Code, in requiring separate unions among rank-and-file employees on one hand, and supervisory employees on the other,
seeks to avoid. The rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees is that such
employees, while in the performance of supervisory functions, become the alter ego of management in the making and the
implementing of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or mutuality of interests in a
bargaining unit consisting of a mixture of rank-and-file and supervisory employees. And this is so because the fundamental test of a
bargaining unit's acceptability is whether or not such a unit will best advance to all employees within the unit the proper exercise of their
collective bargaining rights.

In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in
Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate
labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election. The foregoing
discussion, therefore, renders entirely irrelevant, the technical issue raised as to whether or not respondent union was in possession of
the status of a legitimate labor organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage of
processing of its application for recognition as a legitimate labor organization. The union's composition being in violation of the Labor
Code's prohibition of unions composed of supervisory and rank-and-file employees, it could not possess the requisite personality to file
for recognition as a legitimate labor organization.

[G.R. No. 135806. August 8, 2002.]

TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION, petitioner, vs. TOYOTA MOTOR
PHILIPPINES CORPORATION EMPLOYEES AND WORKERS UNION, TOYOTA MOTOR PHILIPPINES
CORPORATION, and THE SECRETARY OF LABOR AND EMPLOYMENT, respondents.
BELLOSILLO, J:

In April 1997, when TMPCEWU filed a Petition for Certification Election, TMPCLU was allowed to file a Motion to Intervene on the
ground that the Supreme Court decision holding TMPCLU not a legitimate labor organization and therefore without personality to file a
petition for certification election had not ripened into a final and executory judgment.

The issue now, after the finality of above decision, when TMPCEWU revived its Petition for Certification Election, can TMPCLU again
file its Petition-in-Intervention?

The Court ruled in the negative and reiterates the fact that TMPCLU had no valid certificate of registration and therefore no legal
personality to file a Petition for Certification Election, and in the absence of any attempt on its part to rectify the legal infirmity, likewise
the disputed Petition-in-Intervention. TMPCLU may have alleged an already issued certificate of registration in its favor but the Court
believes the same had already been impugned on the ground that the application is vitiated by irregularities. Rightly therefore, TMPCLU
is denied recognition as a legitimate labor organization.

COLLECTIVE BARGAINING AGREEMENT

[G.R. No. 113907. February 28, 2000.]

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), et al., petitioners
vs. vs. HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD
(B), INC., et al., respondents
PURISIMA, J:

Disclaimer: Mahaba talaga tong case na to, nadigest ko na to for corpo, but yung facts talaga niya is about labor, so yung may ***** sa
facts yun yung start ng labor problem nila hahahaha.

Summary: Pursuant to a union security clause in the CBA between petitioner local union, affiliated with ULGWP, and respondent M. Greenfield (B), Inc.,
the dismissal of several union officers and employees was sought after being expelled from the federation. The company either suspended and
terminated petitioners without any prior administrative investigation. Strikes were thereafter held characterized with violence but attributable to both
management and the employees. In the unfair labor practice case challenging their dismissal, the Labor Arbiter rendered judgment finding the
termination valid and that the act of disaffiliation and declaration of autonomy constitutes disloyalty. This was affirmed on appeal by the NLRC, First
Division. A commissioner from the Third Division was designated when one commissioner from the First Division retired and the other inhibited himself
from sitting on the case. Petitioners moved for reconsideration, but was denied.

Facts:

The labor union or the “local union” is an affiliate of ULGWP or the “federation.” The collective bargaining agreement names its parties
as “M. GREENFIELD, INC. (B)” (the company) and “MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (THE
LABOR UNION)/UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP).”

The CBA contained in Article II:

A Union Security clause:

“SECTION 1. COVERAGE AND SCOPE. All employees who are covered by this Agreement and presently members of the UNION
shall remain members of the UNION for the duration of this Agreement as a condition precedent to continued employment with the
COMPANY.”

“SECTION 4. DISMISSAL. Any such employee mentioned in Section 2 hereof, who fails to maintain his membership in the UNION
for non-payment of UNION dues, for resignation and for violation of UNION’s Constitution and By-Laws and any new employee as
defined in Section 2 of this Article shall upon written notice of such failure to join or to maintain membership in the UNION and upon
written recommendation to the COMPANY by the UNION, be dismissed from the employment by the COMPANY; provided,
however, that the UNION shall hold the COMPANY free and blameless from any and all liabilities that may arise should the
dismissed employee question, in any manner, his dismissal; provided, further that the matter of the employee’s dismissal under this
Article may be submitted as a grievance under Article XIII and, provided, finally, that no such written recommendation shall be made
upon the COMPANY nor shall COMPANY be compelled to act upon any such recommendation within the period of sixty (60) days
prior to the expiry date of this Agreement conformably to law."

On September 12, 1986, a local union election was held under the auspices of the federation wherein petitioner, Beda Magdalena
Villanueva, and the otherunion officers were proclaimed as winners.

On March 21, 1987, a Petition for Impeachment was filed with the federation by the defeated candidates in the local union election.

On June 16, 1987, the federation conducted an audit of the local union funds. The investigation did not yield any unfavorable result and
the local union officers were cleared of the charges of anomaly in the custody, handling and disposition of the union funds.

The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on November 5,
1987. The same was dismissed on March 2, 1988, by Med-Arbiter Renato Parungo for failure to substantiate the charges and to
present evidence in support of the allegations.

On April 17, 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union members
failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-attendance of several
union members in the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By-Laws of the union, which read:
 "Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi o pinuno ay
maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw na nagkulang.”

“Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na pagliban at maparusahan ito ng
alinsunod sa Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na mahuli and dating sa takdang oras ng
di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng salary deduction at higit sa isang
oras ng pagdating ng huli ay ituturing na pagliban.”

On June 27, 1988, the local union wrote the company a letter requesting it to deduct the union fines from the wages/salaries of those
union members who failed to attend the general membership meeting.

The Secretary General of the national federation disapproved the resolution of the local union imposing the P50.00 fine. The local union
officers protested such action by the Federation.

On July 11, 1988, the Federation wrote the company a letter advising the latter not to deduct the fifty-peso fine from the salaries of the
union members requesting that: "x x x any and all future representations by [the local union] affecting a number of members be first
cleared from the federation before corresponding action by the Company."

The following day, the company sent a reply to the local union’s request in a letter, stating that it cannot deduct fines from the
employees’ salary without going against certain laws. The company suggested that the union refer the matter to the proper government
office for resolution in order to avoid placing the company in the middle of the issue.

The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union culminating in the
latter’s declaration of general autonomy from the former through Resolution No. 10 passed by the local executive board and ratified by
the general membership on July 16, 1988.

In retaliation, the federation asked the company to stop the remittance of the local union’s share in the education funds effective August
1988.

This was objected to by the local union which demanded that the education fund be remitted to it in full.

The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the Med-Arbitration
Branch of the Department of Labor and Employment.

The Med-Arbiter ruled:

1. That the [Federation] through its local union officers shall administer the [CBA].

2. That [the company] shall remit the P10,000.00 monthly labor education program fund to the [federation] subject to the
condition that it shall use the said amount for its intended purpose.

3. That the Treasurer of the [local union] shall be authorized to collect from the 356 union members the amount of P50.00 as
penalty for their failure to attend the general membership assembly on April 17, 1988. However, if petitioner-labor union
Officers could present the individual written authorizations of the 356 union members, then the company is obligedto deduct
from the salaries of the 356 union members the P50.00 fine.

On appeal, Director Pura-Ferrer Calleja modified the Med-Arbiter’s ruling: “the company should remit the amount of five thousand
pesos (P5,000.00) of the P10,000.00 monthly labor education program fund to [the Federation] and the other P5,000.00 to [the local
union], both unions to use the same for its intended purpose."

Meanwhile, on September 2, 1988, several local unions filed a Petition for Audit and Examination of the federation and education funds
of [the Federation] which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988.

On September 30, 1988, the officials of [the Federation] called a Special National Executive Board Meeting at Nasipit, Agusan del Norte
where a Resolution was passed placing the [local union] under trusteeship and appointing Cesar Clarete as administrator.

On October 27, 1988, Clarete as administrator wrote the company informing the latter of its designation of a certain Alfredo Kalingking
as local union president and "disauthorizing" the incumbent union officers from representing the employees.

Petitioners protested this action by the national federation in a letter to the company dated November 11, 1988.
On November 13, 1988, the petitioner union officers received identical letters from the administrator requiring them to expla in within 72
hours why they should not be removed from their office and expelled from union membership.

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged National Executive Board Resolution placing their union under trusteeship;

(b) Justifying the action of their union in declaring a general autonomy from [the federation] due to the latter’s inability to give
proper educational, organizational and legal services to its affiliates and the pendency of the audit of the federation funds;

(c) Advising that their union did not commit any act of disloyalty as it has remained an affiliate of [the federation];

(d) Giving [the federation] a period of five (5) days to cease and desist from further committing acts of coercion, intimidation
and harassment.

However, as early as November 21, 1988, the officers were expelled from the [federation].

On the same day, the federation advised the company of the expulsion of the 30 union officers and demanded their separation from
employment pursuant to the Union Security Clause in their CBA. This demand was reiterated twice, through letters dated February 21
and March 4, 1989, respectively, to the company.

Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the company to effect
the immediate termination of the expelled union officers.

*****On March 7, 1989, under the pressure of a threatened strike, the company terminated the 30 union officers from employment,
serving them identical copies of the termination letter.

On that same day, the expelled union officers assigned in the first shift were physically or bodily brought out of the company premises
by the company’s security guards. Likewise, those assigned to the second shift were not allowed to report for work. This provoked
some of the members of the local union to demonstrate their protest for the dismissal of the said union officers. Some union members
left their work posts and walked out of the company premises.

The Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB.

On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila, alleging the following grounds for the strike:

(a) Discrimination

(b) Interference in union activities

(c) Mass dismissal of union officers and shop stewards

(d) Threats, coercion and intimidation

(e) Union busting

The following day, March 9, 1989, a strike vote referendum was conducted and out of 2, 103 union members who cast their votes,
2,086 members voted to declare a strike.

On March 10, 1989, the 30 dismissed union officers filed an urgent petition with the Office of the Secretary of the Department of Labor
and Employment praying for the suspension of the effects of their termination from employment. However, the petition was dismissed
by then Secretary Franklin Drilon on April 11, 1989: "At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-
union matter. No mass lay-off is evident as the terminations have been limited to those allegedly leading the secessionist group leaving
PETITIONER-LABOR UNION-THE FEDERATION to form a union under the KMU. xxx"

On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by the company. This
prompted the local union members to again stage a walk-out and resulted in the official declaration of strike at around 3:30 in the
afternoon of March 14, 1989. The strike was attended with violence, force and intimidation on both sides resulting to physical injuries to
several employees, both striking and non-striking, and damage to company properties.
The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive suspe nsion by
the company. The company also sent return-to-work notices to the home addresses of the striking employees thrice successively, on
March 27, April 8 and April 31, 1989, respectively. However, the company admitted that only 261 employees were eventually accepted
back to work. Those who did not respond to the return-to- work notice were sent termination letters dated May 17, 1989.

On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE, Manila,
charging private respondents of unfair labor practice which consists of union busting, illegal dismissal, illegal suspension, interference in
union activities, discrimination, threats, intimidation, coercion, violence, and oppresion.

After the filing of the complaint, the lease contracts on the company’s office and factory at Merville Subdivision, Parañaque expired and
were not renewed. Upon demand of the owners of the premises, the company was compelled to vacate its office and factory.
Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial Park in Taguig,
Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and manufacturing operations, the company
was constrained to move the said departments to Tacloban, Leyte. Hence, on April 16, 1990, the company accordingly notified its
employees of a temporary shutdown in operations. Employees who were interested in relocating to Tacloban were advised to enlist on
or before April 23, 1990.

On December 15, 1992, finding the termination to be valid in compliance with the union security clause of the collective bargaining
agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.

Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo Putong retired from the service, leaving only two
commissioners, Commissioner Vicente Veloso III and Hon. Chairman Bartolome

Carale in the First Division. When Commissioner Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third
Division was temporarily designated to sit in the First Division for the proper disposition of the case. The First Division affirmed the
Labor Arbiter’s disposition and denied the MR.

Petitioners contend that

 their dismissal from work was effected in an arbitrary, hasty, capricious and illegal manner because it was undertaken by the
company without any prior administrative investigation;
 had the company conducted prior independent investigation it would have found that their expulsion from the union was
unlawful similarly for lack of prior administrative investigation;
 the federation cannot recommend the dismissal of the union officers because it was not a principal party to the collective
bargaining agreement between the company and the union;
 public respondents acted with grave abuse of discretion when they declared petitioners’ dismissals as valid and the union
strike as illegal and in not declaring that respondents were guilty of unfair labor practice.

Private respondents, on the other hand, maintain that

 the thirty dismissed employees who were former officers of the federation have no cause of action against the company, the
termination of their employment having been made upon the demand of the federation pursuant to the union security clause
of the CBA;
 the expelled officers of the local union were accorded due process of law prior to their expulsion from their federation;
 the strike conducted by the petitioners was illegal for noncompliance with the requirements; that the employees who
participated in the illegal strike and in the commission of violence thereof were validly terminated from work;
 petitioners were deemed to have abandoned their employment when they did not respond to the three return to work notices
sent to them;
 petitioner labor union has no legal personality to file and prosecute the case for and on behalf of the individual employees as
the right to do so is personal to the latter; and
 the officers of the company cannot be liable because as mere corporate officers, they acted within the scope of their
authority.

Issue:

WON respondent company was justified in dismissing petitioner employees merely upon the labor federation's demand for the
enforcement of the union security clause embodied in their collective bargaining agreement

Held:
Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and
that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason
behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one's right to due
process.

In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly committing acts of disloyalty and/or
inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation, the company
terminated the petitioners without conducting a separate and independent investigation. Respondent company did not inquire into the
cause of the expulsion and whether or not the federation had sufficient grounds to effect the same. Relying merely upon the
federation's allegations, respondent company terminated petitioners from employment when a separate inquiry could have revealed if
the federation had acted arbitrarily and capriciously in expelling the union officers. Respondent company's allegation that petitioners
were accorded due process is belied by the termination letters received by the petitioners which state that the dismissal shall be
immediately effective.

As held in the cited case of Cariño, "the right of an employee to be informed of the charges against him and to reasonable opportunity
to present his side in a controversy with either the company or his own union is not wiped away by a union security clause or a union
shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards
his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from
membership and mere dismissal from his job."

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of
the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily
thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on
the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be
accorded a separate hearing by respondent company.

[G.R. No. 102636. September 10, 1993.]

METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNIONALU-TUCP and ANTONIO V.
BALINANG, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (2nd Division) and
METROPOLITAN BANK & TRUST COMPANY, respondents.
VITUG, J:

Facts:

On 25 May 1989, the bank entered into a collective bargaining agreement with the MBTCEU, granting a monthly P900 wage increase
effective 01 January 1989, P600 wage increase effective 01 January 1990, and P200 wage increase effective 01 January 1991. The
MBTCEU had also bargained for the inclusion of probationary employees in the list of employees who would benefit from the first P900
increase but the bank had adamantly refused to accede thereto. Consequently, only regular employees as of 01 January 1989 were
given the increase to the exclusion of probationary employees.

Barely a month later, or on 01 July 1989, Republic Act 6727 [increase in the minimum wage of 25.00 per day, included yung mga
nakakareceive ng 100.00 above the minimum, makakareceive din sila ng 25.00], "an act to rationalize wage policy determination by
establishing the mechanism and proper standards therefor, . . .fixing new wage rates, providing wage incentives for industrial dispersal
to the countryside, and for other purposes," took effect.

Pursuant to the provisions, the bank gave the P25 increase per day, or P750 a month, to its probationary employees and to those who
had been promoted to regular or permanent status before 01 July 1989 but whose daily rate was P100 and below. The bank refused to
give the same increase to its regular employees who were receiving more than P100 per day and recipients of the P900 CBA increase.

Contending that the bank's implementation of Republic Act 6727 resulted in the categorization of the employees into:

(a) the probationary employees as of 30 June 1989 and regular employees receiving P100 or less a day who had been
promoted to permanent or regular status before 01 July 1989, and

(b) the regular employees as of 01 January 1989, whose pay was over P100 a day, and that, between the two groups, there
emerged a substantially reduced salary gap, the MBTCEU sought from the bank the correction of the alleged distortion in pay.
In order to avert an impending strike, the bank petitioned the Secretary of Labor to assume jurisdiction over the case or to certify the
same to the National Labor Relations Commission (NLRC) under Article 263 (g) of the Labor Code.

LABOR ARBITER; Eduardo J. Carpio: disagreed with the bank's contention that the increase in its implementation of Republic Act
6727 did not constitute a distortion because "only 143 employees or 6.8% of the bank's population of a total of 2,108 regular
employees" benefited. He stressed that "it is not necessary that a big number of wage earners within a company be benefited by the
mandatory increase before a wage distortion may be considered to have taken place," it being enough, he said, that such increase
"result(s) in the severe contraction of an intentional quantitative difference in wage rates between employee groups." Since the
"subjective quantitative difference" between wage rates had been reduced from P900.00 to barely P150.00, correction of the wage
distortion pursuant to Section 4(c) of the Rules Implementing Republic Act 6727 should be made.

The respondent is hereby directed to restore to complainants and their members the Nine Hundred (P900.00) Pesos CBA wage gap
they used to enjoy over non-regular employees as of January 1, 1989 by granting them a Seven Hundred Fifty (P750.00) Pesos
monthly increase effective July 1, 1989.

APPEAL; NLRC: reversed LA. A wage distortion can arise only in a situation where the salary structure is characterized by intentional
quantitative differences among employee groups determined or fixed on the basis of skills, length of service, or other logical basis of
differentiation and such differences or distinctions are obliterated or contracted by subsequent wage increases.

PETITIONER; MR: Denied.

PETITIONER; CERTIORARI: charging the NLRC with grave abuse of discretion by its refusal (a) "to acknowledge the existence of a
wage distortion in the wage or salary rates between and among the employee groups of the respondent bank as a result of the bank's
partial implementation" of Republic Act 6727 and (b) to give due course to its claim for an across-the-board P25 increase under
Republic Act No. 6727

Issue:

WON a wage distortion exists as a consequence of the grant of a wage increase to certain employees

WON the benefits provided under the CBA be equated with those granted by law.

Held:

The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus: "(p) Wage Distortion means a situation
where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in
wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical bases of differentiation."

In this case, the majority of the members of the NLRC, as well as its dissenting member, agree that there is a wage distortion arising
from the bank's implementation of the P25 wage increase; they do differ, however, on the extent of the distortion that can warrant the
adoption of corrective measures required by the law. The "intentional quantitative differences" in wage among employees of the bank
has been set by the CBA to about P900 per month as of 01 January 1989. It is intentional as it has been arrived at through the
collective bargaining process to which the parties are thereby concluded.

The Solicitor General, in recommending the grant of due course to the petition, has correctly emphasized that the intention of the
parties, whether the benefits under a collective bargaining agreement should be equated with those granted by law or not,
unless there are compelling reasons otherwise, must prevail and be given effect. In keeping then with the intendment of the law
and the agreement of the parties themselves, along with the often repeated rule that all doubts in the interpretation and implementation
of labor laws should be resolved in favor of labor, we must approximate an acceptable quantitative difference between and among the
CBA agreed work levels.