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[G.R. NO.

181531 : July 31, 2009]

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED


INDUSTRIES - MANILA PAVILION HOTEL CHAPTER, Petitioner, v. SECRETARY OF
LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN
MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL
CORPORATION, Respondents.

DECISION

CARPIO MORALES, J.:

National Union of Workers in Hotels, Restaurants and Allied Industries - Manila Pavilion
Hotel Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of
Appeals November 8, 2007 Decision1 and of the Secretary of Labor and Employment's
January 25, 2008 Resolution2 in OS-A-9-52-05 which affirmed the Med-Arbiter's
Resolutions dated January 22, 20073 and March 22, 2007.4

A certification election was conducted on June 16, 2006 among the rank-and-file
employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following
results:

EMPLOYEES IN VOTERS' LIST = 353


TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

In view of the significant number of segregated votes, contending unions, petitioner,


NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma. SimonetteCalabocal to decide
which among those votes would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees, albeit the legality of their
dismissal was still pending before the Court of Appeals. Six other votes were
segregated because the employees who cast them were already occupying supervisory
positions at the time of the election. Still five other votes were segregated on the ground
that they were cast by probationaryemployees and, pursuant to the existing Collective
Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on,

1
however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee,
was counted.

By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of
the 22 segregated votes, specially those cast by the 11 dismissed employees and those
cast by the six supposedly supervisory employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and
Employment (SOLE), arguing that the votes of the probationary employees should have
been opened considering that probationary employee Gatbonton's vote was tallied. And
petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be
immediately certified as the bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence,
the 169 votes which HIMPHLU garnered would be one vote short of the majority which
would then become 169.

By the assailed Resolution of January 22, 2007, the Secretary of Labor and
Employment (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the
Med-Arbiter's Order. It held that pursuant to Section 5, Rule IX of the Omnibus Rules
Implementing the Labor Code on exclusion and inclusion of voters in a certification
election, the probationary employees cannot vote, as at the time the Med-Arbiter issued
on August 9, 2005 the Order granting the petition for the conduct of the certification
election, the six probationary employees were not yet hired, hence, they could not vote.

The SOLE further held that, with respect to the votes cast by the 11 dismissed
employees, they could be considered since their dismissal was still pending appeal.

As to the votes cast by the six alleged supervisory employees, the SOLE held that their
votes should be counted since their promotion took effect months after the issuance of
the above-said August 9, 2005 Order of the Med-Arbiter, hence, they were still
considered as rank-and-file.

Respecting Gatbonton's vote, the SOLE ruled that the same could be the basis to
include the votes of the other probationary employees, as the records show that during
the pre-election conferences, there was no disagreement as to his inclusion in the
voters' list, and neither was it timely challenged when he voted on election day, hence,
the Election Officer could not then segregate his vote.

The SOLE further ruled that even if the 17 votes of the dismissed and supervisory
employees were to be counted and presumed to be in favor of petitioner, still, the same
would not suffice to overturn the 169 votes garnered by HIMPHLU.

In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive
bargaining agent was proper.

2
Petitioner's motion for reconsideration having been denied by the SOLE by Resolution
of March 22, 2007, it appealed to the Court of Appeals.

By the assailed Decision promulgated on November 8, 2007, the appellate


court affirmed the ruling of the SOLE. It held that, contrary to petitioner's assertion, the
ruling in Airtime Specialist, Inc. v. Ferrer Calleja5 stating that in a certification election,
all rank-and-file employees in the appropriate bargaining unit, whether probationary or
permanent, are entitled to vote, is inapplicable to the case at bar. For, the appellate
court continued, the six probationary employees were not yet employed by the Hotel at
the time the August 9, 2005 Order granting the certification election was issued. It thus
held that Airtime Specialist applies only to situations wherein the probationary
employees were already employed as of the date of filing of the petition for certification
election.

Respecting Gatbonton's vote, the appellate court upheld the SOLE's finding that since it
was not properly challenged, its inclusion could no longer be questioned, nor could it be
made the basis to include the votes of the six probationary employees.

The appellate court brushed aside petitioner's contention that the opening of the 17
segregated votes would materially affect the results of the election as there would be
the likelihood of a run-off election in the event none of the contending unions receive a
majority of the valid votes cast. It held that the "majority" contemplated in deciding which
of the unions in a certification election is the winner refers to the majority of valid votes
cast, not the simple majority of votes cast, hence, the SOLE was correct in ruling that
even if the 17 votes were in favor of petitioner, it would still be insufficient to overturn the
results of the certification election.

Petitioner's motion for reconsideration having been denied by Resolution of January 25,
2008, the present recourse was filed.

Petitioner's contentions may be summarized as follows:

1. Inclusion of Jose Gatbonton's vote but excluding the vote of the six other
probationary employees violated the principle of equal protection and is not in accord
with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja;

2. The time of reckoning for purposes of determining when the probationary employees
can be allowed to vote is not August 9, 2005 - the date of issuance by Med-Arbiter
Calabocal of the Order granting the conduct of certification elections, but March 10,
2006 - the date the SOLE Order affirmed the Med-Arbiter's Order.

3. Even if the votes of the six probationary employees were included, still, HIMPHLU
could not be considered as having obtained a majority of the valid votes cast as the
opening of the 17 ballots would increase the number of valid votes from 321 to 338,
hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have
garnered at least 170, not 169, votes.

3
Petitioner justifies its not challenging Gatbonton's vote because it was precisely its
position that probationary employees should be allowed to vote. It thus avers that justice
and equity dictate that since Gatbonton's vote was counted, then the votes of the 6
other probationary employees should likewise be included in the tally.

Petitioner goes on to posit that the word "order" in Section 5, Rule 9 of Department
Order No. 40-03 reading "[A]ll employees who are members of the appropriate
bargaining unit sought to be represented by the petitioner at the time of the issuance of
the order granting the conduct of certification election shall be allowed to vote" refers to
an order which has already become final and executory, in this case the March 10, 2002
Order of the SOLE.

Petitioner thus concludes that if March 10, 2006 is the reckoning date for the
determination of the eligibility of workers, then all the segregated votes cast by the
probationary employees should be opened and counted, they having already been
working at the Hotel on such date.

Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner


argues that the same was not proper for if the 17 votes would be counted as valid, then
the total number of votes cast would have been 338, not 321, hence, the majority would
be 170; as such, the votes garnered by HIMPHLU is one vote short of the majority for it
to be certified as the exclusive bargaining agent.

The relevant issues for resolution then are first, whether employees on probationary
status at the time of the certification elections should be allowed to vote, and second,
whether HIMPHLU was able to obtain the required majority for it to be certified as the
exclusive bargaining agent.

On the first issue, the Court rules in the affirmative.

The inclusion of Gatbonton's vote was proper not because it was not questioned but
because probationary employees have the right to vote in a certification election. The
votes of the six other probationary employees should thus also have been counted. As
Airtime Specialists, Inc. v. Ferrer-Calleja holds:

In a certification election, all rank and file employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to vote. This principle is clearly stated in
Art. 255 of the Labor Code which states that the "labor organization designated or
selected by the majority of the employees in an appropriate bargaining unit shall be the
exclusive representative of the employees in such unit for purposes of collective
bargaining." Collective bargaining covers all aspects of the employment relation and the
resultant CBA negotiated by the certified union binds all employees in the bargaining
unit. Hence, all rank and file employees, probationary or permanent, have a substantial
interest in the selection of the bargaining representative. The Code makes no distinction
as to their employment status as basis for eligibility in supporting the petition for
certification election. The law refers to "all" the employees in the bargaining unit. All they

4
need to be eligible to support the petition is to belong to the "bargaining unit."
(Emphasis supplied)cralawlibrary

Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI
of the Omnibus Rules Implementing the Labor Code, provides:

Rule II

Section 2. Who may join labor unions and workers' associations. - All persons employed
in commercial, industrial and agricultural enterprises, including employees of
government owned or controlled corporations without original charters established
under the Corporation Code, as well as employees of 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 unions for purposes of collective
bargaining: provided, however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but may form, join or assist
separate labor unions of their own. Managerial employees shall not be eligible to form,
join or assist any labor unions for purposes of collective bargaining. Alien employees
with valid working permits issued by the Department may exercise the right to self-
organization and join or assist labor unions for purposes of collective bargaining if they
are nationals of a country which grants the same or similar rights to Filipino workers, as
certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or
not, shall beginning on the first day of his/her service, be eligible for membership in any
labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for
their mutual aid and protection and other legitimate purposes except collective
bargaining. (Emphasis supplied)cralawlibrary

The provision in the CBA disqualifying probationary employees from voting cannot
override the Constitutionally-protected right of workers to self-organization, as well as
the provisions of the Labor Code and its Implementing Rules on certification elections
and jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a contract are valid only if
they are not contrary to law, morals, good customs, public order or public policy. 6

Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to
support their position that probationary employees hired after the issuance of the Order
granting the petition for the conduct of certification election must be excluded, should
not be read in isolation and must be harmonized with the other provisions of D.O. Rule
XI, Sec. 5 of D.O. 40-03, viz:

5
Rule XI

x x x

Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members


of the appropriate bargaining unit sought to be represented by the petitioner at the time
of the issuance of the order granting the conduct of a certification election shall be
eligible to vote. An employee who has been dismissed from work but has contested the
legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance
of the order for the conduct of a certification election shall be considered a qualified
voter, unless his/her dismissal was declared valid in a final judgment at the time of the
conduct of the certification election. (Emphasis supplied)cralawlibrary

x x x

Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the
last hearing, the Med-Arbiter shall issue a formal order granting the petition or a
decision denying the same. In organized establishments, however, no order or decision
shall be issued by the Med-Arbiter during the freedom period.

The order granting the conduct of a certification election shall state the following:

(a) the name of the employer or establishment;

(b) the description of the bargaining unit;

(c) a statement that none of the grounds for dismissal enumerated in the succeeding
paragraph exists;

(d) the names of contending labor unions which shall appear as follows: petitioner
union/s in the order in which their petitions were filed, forced intervenor, and no union;
andcralawlibrary

(e) a directive upon the employer and the contending union(s) to submit within ten (10)
days from receipt of the order, the certified list of employees in the bargaining unit, or
where necessary, the payrolls covering the members of the bargaining unit for the last
three (3) months prior to the issuance of the order. (Emphasis supplied)cralawlibrary

x x x

Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from
receipt of the entire records of the petition within which to decide the appeal. The filing
of the memorandum of appeal from the order or decision of the Med-Arbiter stays the
holding of any certification election.

6
The decision of the Secretary shall become final and executory after ten (10) days from
receipt thereof by the parties. No motion for reconsideration of the decision shall be
entertained. (Emphasis supplied)cralawlibrary

In light of the immediately-quoted provisions, and prescinding from the principle that all
employees are, from the first day of their employment, eligible for membership in a labor
organization, it is evident that the period of reckoning in determining who shall be
included in the list of eligible voters is, in cases where a timely appeal has been
filed from the Order of the Med -
Arbiter, the date when the Order of theSecretary of Labor and Employment,
whether affirming or denying the appeal, becomes final andexecutory.

The filing of an appeal to the SOLE from the Med-Arbiter's Order stays its execution, in
accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to
furnish him/her with the list of eligible voters pending the resolution of the appeal.

During the pendency of the appeal, the employer may hire additional employees. To
exclude the employees hired after the issuance of the Med-Arbiter's Order but before
the appeal has been resolved would violate the guarantee that every employee has the
right to be part of a labor organization from the first day of their service.

In the present case, records show that the probationary employees, including
Gatbonton, were included in the list of employees in the bargaining unit submitted by
the Hotel on May 25, 2006 in compliance with the directive of the Med-Arbiter after the
appeal and subsequent motion for reconsideration have been denied by the SOLE,
rendering the Med-Arbiter's August 22, 2005 Order final and executory 10 days after the
March 22, 2007 Resolution (denying the motion for reconsideration of the January 22
Order denying the appeal), and rightly so. Because, for purposes of self-organization,
those employees are, in light of the discussion above, deemed eligible to vote.

A certification election is the process of determining the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit for purposes of collective
bargaining. Collective bargaining, refers to the negotiated contract between a legitimate
labor organization and the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit.7

The significance of an employee's right to vote in a certification election cannot thus be


overemphasized. For he has considerable interest in the determination of who shall
represent him in negotiating the terms and conditions of his employment.

Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the
Order of the Med-Arbiter, experience shows that it sometimes takes months to be
resolved. To rule then that only those employees hired as of the date of the issuance of
the Med-Arbiter's Order are qualified to vote would effectively disenfranchise employees
hired during the pendency of the appeal. More importantly, reckoning the date of the

7
issuance of the Med-Arbiter's Order as the cut-off date would render inutile the remedy
of appeal to the SOLE.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

But while the Court rules that the votes of all the probationary employees should be
included, under the particular circumstances of this case and the period of time which it
took for the appeal to be decided, the votes of the six supervisory employees must be
excluded because at the time the certification elections was conducted, they had
ceased to be part of the rank and file, their promotion having taken effect two months
before the election.

As to whether HIMPHLU should be certified as the exclusive bargaining agent, the


Court rules in the negative. It is well-settled that under the so-called "double majority
rule," for there to be a valid certification election, majority of the bargaining unit must
have voted AND the winning union must have garnered majority of the valid votes cast.

Prescinding from the Court's ruling that all the probationary employees' votes should be
deemed valid votes while that of the supervisory employees should be excluded, it
follows that the number of valid votes cast would increase - from 321 to 337. Under Art.
256 of the Labor Code, the union obtaining the majority of the valid votes cast by the
eligible voters shall be certified as the sole and exclusive bargaining agent of all the
workers in the appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337
is 168.5 + 1 or at least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not
able to obtain a majority vote. The position of both the SOLE and the appellate court
that the opening of the 17 segregated ballots will not materially affect the outcome of the
certification election as for, so they contend, even if such member were all in favor of
petitioner, still, HIMPHLU would win, is thus untenable.

It bears reiteration that the true importance of ascertaining the number of valid votes
cast is for it to serve as basis for computing the required majority, and not just to
determine which union won the elections. The opening of the segregated but valid votes
has thus become material. To be sure, the conduct of a certification election has a two-
fold objective: to determine the appropriate bargaining unit and to ascertain the majority
representation of the bargaining representative, if the employees desire to be
represented at all by anyone. It is not simply the determination of who between two or
more contending unions won, but whether it effectively ascertains the will of the
members of the bargaining unit as to whether they want to be represented and which
union they want to represent them.

Having declared that no choice in the certification election conducted obtained the
required majority, it follows that a run-off election must be held to determine which
between HIMPHLU and petitioner should represent the rank-and-file employees.

A run-off election refers to an election between the labor unions receiving the two (2)
highest number of votes in a certification or consent election with three (3) or more

8
choices, where such a certified or consent election results in none of the three (3) or
more choices receiving the majority of the valid votes cast; provided that the total
number of votes for all contending unions is at least fifty percent (50%) of the number of
votes cast.8 With 346 votes cast, 337 of which are now deemed valid and HIMPHLU
having only garnered 169 and petitioner having obtained 151 and the choice "NO
UNION" receiving 1 vote, then the holding of a run-off election between HIMPHLU and
petitioner is in order.

WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and
Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions
dated January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor
and Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE.

The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to


cause the holding of a run-off election between petitioner, National Union of Workers in
Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-
MPC), and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).

SO ORDERED.

9
SECOND DIVISION

G.R. No. 211145, October 14, 2015

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT,


ALFIE ALIPIO, Petitioner, v. BUREAU OF LABOR RELATIONS, HANJIN HEAVY
INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-PHIL.), Respondents.

DECISION

MENDOZA, J.:

The right to self-organization is not limited to unionism. Workers may also form or join
an association for mutual aid and protection and for other legitimate purposes.

This is a petition for review on certiorari seeking to reverse and set aside the July 4,
2013 Decision1 and the January 28, 2014 Resolution2 of the Court of Appeals (CA) in
CA-G.R. SP No. 123397, which reversed the November 28, 2011 Resolution 3 of the
Bureau of Labor Relations (BLR) and reinstated the April 20, 2010 Decision4 of the
Department of Labor and Employment (DOLE) Regional Director, cancelling the
registration of Samahan ng ManggagawasaHanjin Shipyard (Samahan) as a worker's
association under Article 243 (now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio,
filed an application for registration5 of its name "Samahan ng MgaManggagawasaHanjin
Shipyard" with the DOLE. Attached to the application were the list of names of the
association's officers and members, signatures of the attendees of the February 7, 2010
meeting, copies of their Constitution and By-laws. The application stated that the
association had a total of 120 members.

On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando,
Pampanga (DOLE-Pampanga), issued the corresponding certificate of registration6 in
favor of Samahan.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd.
Philippines (Hanjin), with offices at Greenbeach 1, Renondo Peninsula, Sitio Agustin,

10
Barangay Cawag, Subic Bay Freeport Zone, filed a petition7 with DOLE-Pampanga
praying for the cancellation of registration of Samahan's association on the ground that
its members did not fall under any of the types of workers enumerated in the second
sentence of Article 243 (now 249).

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed,
and those without definite employers may form a workers' association. It further posited
that one third (1/3) of the members of the association had definite employers and the
continued existence and registration of the association would prejudice the company's
goodwill.

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground
that Samahan committed a misrepresentation in connection with the list of members
and/or voters who took part in the ratification of their constitution and by-laws in its
application for registration. Hanjin claimed that Samahan made it appear that its
members were all qualified to become members of the workers' association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan


requested for a 10-day period to file a responsive pleading. No pleading, however, was
submitted. Instead, Samahan filed a motion to dismiss on April 14, 2010.9

The Ruling of the DOLE Regional Director

On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He
found that the preamble, as stated in the Constitution and By-Laws of Samahan, was an
admission on its part that all of its members were employees of Hanjin, to wit:
KAMI, angmgaManggagawasa HANJIN Shipyard (SAMAHAN) ay
naglalayongnaisulongangpagpapabuti ng kondisyonsapaggawa at
katiyakansahanapbuhaysapamamagitan ng patuloynapagpapaunlad ng kasanayan ng
para samgakasapinito. Naniniwalanasapamamagitan ng amingmgaangkinglakas,
kaalaman at kasanayan ay anting maitataguyod at makapag-aambagsakaunlaran ng
isanglipunan. Na mararating at makakamitangantas ng pagkilala, pagdakila at
pagpapahalagasamgatulad naming mgamanggagawa.

x x x10
The same claim was made by Samahan in its motion to dismiss, but it failed to adduce
evidence that the remaining 63 members were also employees of Hanjin. Its admission
bolstered Hanjin's claim that Samahan committed misrepresentation in its application for
registration as it made an express representation that all of its members were
employees of the former. Having a definite employer, these 57 members should have
formed a labor union for collective bargaining.11 The dispositive portion of the decision
of the Dole Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently,
the Certificate of Registration as Legitimate Workers Association (LWA) issued to the
SAMAHAN NG MGA MANGGAGAWA SA HANJIN SHIPYARD (SAMAHAN) with
Registration Numbers R0300-1002-WA-009 dated February 26, 2010 is hereby

11
CANCELLED, and said association is dropped from the roster of labor organizations of
this Office.

SO DECIDED.12
The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no right
to petition for the cancellation of its registration. Samahan pointed out that the words
"Hanjin Shipyard," as used in its application for registration, referred to a workplace and
not as employer or company. It explained that when a shipyard was put up in Subic,
Zambales, it became known as Hanjin Shipyard. Further, the remaining 63 members
signed the Sama-SamangPagpapatunay which stated that they were either working or
had worked at Hanjin. Thus, the alleged misrepresentation committed by Samahan had
no leg to stand on.14

In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It


reiterated that Samahan committed misrepresentation in its application for registration
before DOLE Pampanga. While Samahan insisted that the remaining 63 members were
either working, or had at least worked in Hanjin, only 10 attested to such fact, thus,
leaving its 53 members without any workplace to claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of
the Regional Director. It stated that the law clearly afforded the right to self-organization
to all workers including those without definite employers.16 As an expression of the right
to self-organization, industrial, commercial and self-employed workers could form a
workers' association if they so desired but subject to the limitation that it was only for
mutual aid and protection.17 Nowhere could it be found that to form a workers'
association was prohibited or that the exercise of a workers' right to self-organization
was limited to collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of
Samahan. The phrase, "KAMI, angmgaManggagawasaHanjin Shipyard" if translated,
would be: "We, the workers at Hanjin Shipyard." The use of the preposition "at" instead
of "of " would indicate that "Hanjin Shipyard" was intended to describe a place. 19 Should
Hanjin feel that the use of its name had affected the goodwill of the company, the
remedy was not to seek the cancellation of the association's registration. At most, the
use by Samahan of the name "Hanjin Shipyard" would only warrant a change in the
name of the association.20 Thus, the dispositive portion of the BLR decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director
Ernesto C. Bihis dated 20 April 2010 is REVERSED and SET ASIDE.

Accordingly, Samahan ng mgaManggagawasaHanjin Shipyard shall remain in the roster


of legitimate workers' association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22

In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6, 2010

12
Decision, but directed Samahan to remove the words "Hanjin Shipyard" from its name.
The BLR explained that the Labor Code had no provision on the use of trade or
business name in the naming of a worker's association, such matters being governed by
the Corporation Code. According to the BLR, the most equitable relief that would strike
a balance between the contending interests of Samahan and Hanjin was to direct
Samahan to drop the name "Hanjin Shipyard" without delisting it from the roster of
legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby
AFFIRMED with a DIRECTIVE for SAMAHAN to remove "HANJIN SHIPYARD" from its
name.

SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA,
docketed as CA-G.R. SP No. 123397.

In its March 21, 2012 Resolution,26 the CA dismissed the petition because of
Samahan's failure to file a motion for reconsideration of the assailed November 28,
2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration 27 and on July 18, 2012,
Hanjin filed its comment28 to oppose the same. On October 22, 2012, the CA issued a
resolution granting Samahan's motion for reconsideration and reinstating the petition.
Hanjin was directed to file a comment five (5) days from receipt of notice.29

On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to
require Samahan to change its name was not tantamount to interfering with the workers'
right to self-organization.31 Thus, it prayed, among others, for the dismissal of the
petition for Samahan's failure to file the required motion for reconsideration. 32

On January 17, 2013, Samahan filed its reply.33

On March 22, 2013, Hanjin filed its memorandum.34

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan
as a legitimate workers' association was contrary to the provisions of Article 243 of the
Labor Code.35 It stressed that only 57 out of the 120 members were actually working in
Hanjin while the phrase in the preamble of Samahan's Constitution and By-laws, "KAMI,
angmgaManggagawasaHanjin Shipyard" created an impression that all its members
were employees of HHIC. Such unqualified manifestation which was used in its
application for registration, was a clear proof of misrepresentation which warranted the
cancellation of Samahan's registration.

It also stated that the members of Samahan could not register it as a legitimate worker's
association because the place where Hanjin's industry was located was not a rural area.

13
Neither was there any evidence to show that the members of the association were
ambulant, intermittent or itinerant workers.36

At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the
association name would not prejudice or impair its right to self-organization because it
could adopt other appropriate names. The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the
words "Hanjin Shipyard" be removed from petitioner association's name, is AFFIRMED.
The Decision dated April 20, 2010 of the DOLE Regional Director in Case No. R0300-
1003-CP-001, which ordered the cancellation of petitioner association's registration is
REINSTATED.

SO ORDERED.37
Hence, this petition, raising the following
ISSUES

I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT SAMAHAN


CANNOT FORM A WORKERS' ASSOCIATION OF EMPLOYEES IN HANJIN AND
INSTEAD SHOULD HAVE FORMED A UNION, HENCE THEIR REGISTRATION AS A
WORKERS' ASSOCIATION SHOULD BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE


REMOVAL/DELETION OF THE WORD "HANJIN" IN THE NAME OF THE UNION BY
REASON OF THE COMPANY'S PROPERTY RIGHT OVER THE COMPANY NAME
"HANJIN."38
Samahan argues that the right to form a workers' association is not exclusive to
intermittent, ambulant and itinerant workers. While the Labor Code allows the workers
"to form, join or assist labor organizations of their own choosing" for the purpose of
collective bargaining, it does not prohibit them from forming a labor organization simply
for purposes of mutual aid and protection. All members of Samahan have one common
place of work, Hanjin Shipyard. Thus, there is no reason why they cannot use "Hanjin
Shipyard" in their name.39

Hanjin counters that Samahan failed to adduce sufficient basis that all its members
were employees of Hanjin or its legitimate contractors, and that the use of the name
"Hanjin Shipyard" would create an impression that all its members were employess of
HHIC.40

Samahan reiterates its stand that workers with a definite employer can organize any
association for purposes of mutual aid and protection. Inherent in the workers' right to
self-organization is its right to name its own organization. Samahan referred
"HanjinShipyard" as their common place of work. Therefore, they may adopt the same
in their association's name.41

The Court's Ruling

14
The petition is partly meritorious.

Right to self-organization includes right to form a union, workers' association and labor
management councils

More often than not, the right to self-organization connotes unionism. Workers,
however, can also form and join a workers' association as well as labor-management
councils (LMC). Expressed in the highest law of the land is the right of all workers to
self-organization. Section 3, Article XIII of the 1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all. It shall guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. xxx

[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. 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.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote
full employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure,
and just and humane conditions of work.

[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-organization
includes the right to form, join or assist labor organizations for the purpose of collective
bargaining through representatives of their own choosing and to engage in lawful
concerted activities for the same purpose for their mutual aid and protection. This is in
line with the policy of the State to foster the free and voluntary organization of a strong
and united labor movement as well as to make sure that workers participate in policy
and decision-making processes affecting their rights, duties and welfare.42

The right to form a union or association or to self-organization comprehends two


notions, to wit: (a) the liberty or freedom, that is, the absence of restraint which
guarantees that the employee may act for himself without being prevented by law; and
(b) the power, by virtue of which an employee may, as he pleases, join or refrain from
joining an association.43

In view of the revered right of every worker to self-organization, the law expressly allows
and even encourages the formation of labor organizations. A labor organization is

15
defined as "any union or association of employees which exists in whole or in part for
the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment."44 A labor organization has two broad rights: (1) to bargain
collectively and (2) to deal with the employer concerning terms and conditions of
employment. To bargain collectively is a right given to a union once it registers itself
with the DOLE. Dealing with the employer, on the other hand, is a generic description of
interaction between employer and employees concerning grievances, wages, work
hours and other terms and conditions of employment, even if the employees' group is
not registered with the DOLE.45

A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose,46 while a workers' association is an
organization of workers formed for the mutual aid and protection of its members or for
any legitimate purpose other than collective bargaining.47

Many associations or groups of employees, or even combinations of only several


persons, may qualify as a labor organization yet fall short of constituting a labor union.
While every labor union is a labor organization, not every labor organization is a labor
union. The difference is one of organization, composition and operation. 48

Collective bargaining is just one of the forms of employee participation. Despite so


much interest in and the promotion of collective bargaining, it is incorrect to say that it is
the device and no other, which secures industrial democracy. It is equally misleading to
say that collective bargaining is the end-goal of employee representation. Rather, the
real aim is employee participation in whatever form it may appear, bargaining or no
bargaining, union or no union.49 Any labor organization which may or may not be a
union may deal with the employer. This explains why a workers' association or
organization does not always have to be a labor union and why employer-employee
collective interactions are not always collective bargaining.50

To further strengthen employee participation, Article 255 (now 261)51 of the Labor Code
mandates that workers shall have the right to participate in policy and decision-making
processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and
employers may form LMCs.

A cursory reading of the law demonstrates that a common element between unionism
and the formation of LMCs is the existence of an employer-employee relationship.
Where neither party is an employer nor an employee of the other, no duty to bargain
collectively would exist.52 In the same manner, expressed in Article 255 (now 261) is the
requirement that such workers be employed in the establishment before they can
participate in policy and decision making processes.

In contrast, the existence of employer-employee relationship is not mandatory in the


formation of workers' association. What the law simply requires is that the members of
the workers' association, at the very least, share the same interest. The very definition

16
of a workers' association speaks of "mutual aid and protection."

Right to choose whether to form or join a union or workers' association belongs to


workers themselves

In the case at bench, the Court cannot sanction the opinion of the CA that Samahan
should have formed a union for purposes of collective bargaining instead of a workers'
association because the choice belonged to it. The right to form or join a labor
organization necessarily includes the right to refuse or refrain from exercising the said
right. It is self-evident that just as no one should be denied the exercise of a right
granted by law, so also, no one should be compelled to exercise such a conferred
right.53 Also inherent in the right to self-organization is the right to choose whether to
form a union for purposes of collective bargaining or a workers' association for purposes
of providing mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided by


law. For instance, the Labor Code specifically disallows managerial employees from
joining, assisting or forming any labor union. Meanwhile, supervisory employees, while
eligible for membership in labor organizations, are proscribed from joining the collective
bargaining unit of the rank and file employees.54 Even government employees have the
right to self-organization. It is not, however, regarded as existing or available for
purposes of collective bargaining, but simply for the furtherance and protection of their
interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they
should have formed a union instead of a workers' association. The Court disagrees.
There is no provision in the Labor Code that states that employees with definite
employers may form, join or assist unions only.

The Court cannot subscribe either to Hanjin's position that Samahan's members cannot
form the association because they are not covered by the second sentence of Article
243 (now 249), to wit:
Article 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 of 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. (As
amended by Batas PambansaBilang 70, May 1, 1980)

[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department Order (D.O.) No.
40-03, Series of 2003, which provides:

17
RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

Section 1. Policy. - It is the policy of the State to promote the free and responsible
exercise of the right to self-organization through the establishment of a simplified
mechanism for the speedy registration of labor unions and workers associations,
determination of representation status and resolution of inter/intra-union and other
related labor relations disputes. Only legitimate or registered labor unions shall have the
right to represent their members for collective bargaining and other purposes. Workers'
associations shall have the right to represent their members for purposes other than
collective bargaining.

Section 2. Who may join labor unions and workers' associations. - All persons
employed in commercial, industrial and agricultural enterprises, including employees of
government owned or controlled corporations without original charters established
under the Corporation Code, as well as employees of 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 unions for purposes of collective
bargaining: provided, however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but may form, join or assist
separate labor unions of their own. Managerial employees shall not be eligible to form,
join or assist any labor unions for purposes of collective bargaining. Alien employees
with valid working permits issued by the Department may exercise the right to self-
organization and join or assist labor unions for purposes of collective bargaining if they
are nationals of a country which grants the same or similar rights to Filipino workers, as
certified by the Department of Foreign Affairs.

For purposes of this section, any employee, whether employed for a definite period or
not, shall beginning on the first day of his/her service, be eligible for membership in any
labor organization.

All other workers, including ambulant, intermittent and other workers, the self-
employed, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection and other legitimate purposes except
collective bargaining.

[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which provides that
workers, with definite employers, cannot form or join a workers' association for mutual
aid and protection. Section 2 thereof even broadens the coverage of workers who can
form or join a workers' association. Thus, the Court agrees with Samahan's argument
that the right to form a workers' association is not exclusive to ambulant, intermittent
and itinerant workers. The option to form or join a union or a workers' association lies
with the workers themselves, and whether they have definite employers or not.

18
No misrepresentation on the part of Samahan to warrant cancellation of registration

In this case, Samahan's registration was cancelled not because its members were
prohibited from forming a workers' association but because they allegedly committed
misrepresentation for using the phrase, "KAMI, angmgaManggagawasa HAN JIN
Shipyard."

Misrepresentation, as a ground for the cancellation of registration of a labor


organization, is committed "in connection with the adoption, or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, the list of
members who took part in the ratification of the constitution and by-laws or amendments
thereto, and those in connection with the election of officers, minutes of the election of
officers, and the list of voters, xxx."56

In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director granted the
petition for the cancellation of certificate of registration of
SamahangLakasManggagawasaTakata (Salamat) after finding that the employees who
attended the organizational meeting fell short of the 20% union registration requirement.
The BLR, however, reversed the ruling of the DOLE Regional Director, stating that
petitioner Takata Corporation (Takata) failed to prove deliberate and malicious
misrepresentation on the part of respondent Salamat. Although Takata claimed that in
the list of members, there was an employee whose name appeared twice and another
was merely a project employee, such facts were not considered misrepresentations in
the absence of showing that the respondent deliberately did so for the purpose of
increasing their union membership. The Court ruled in favor of Salamat.

In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for
cancellation of certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities,
especially those appearing on the face of the application and its attachments, a union
should be denied recognition as a legitimate labor organization. Prescinding from
these considerations, the issuance to the Union of Certificate of Registration No.
RO300-00-02-UR-0003 necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating irregularities.
Another factor which militates against the veracity of the allegations in
the SinumpaangPetisyon is the lack of particularities on how, when and where
respondent union perpetrated the alleged fraud on each member. Such details are
crucial for in the proceedings for cancellation of union registration on the ground
of fraud or misrepresentation, what needs to be established is that the specific act or
omission of the union deprived the complaining employees-members of their right to
choose.

[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to be a ground for
the cancellation of the certificate of registration, must be done maliciously and
deliberately. Further, the mistakes appearing in the application or attachments must be

19
grave or refer to significant matters. The details as to how the alleged fraud was
committed must also be indubitably shown.

The records of this case reveal no deliberate or malicious intent to commit


misrepresentation on the part of Samahan. The use of such words "KAMI,
angmgaManggagawasa HANJIN Shipyard" in the preamble of the constitution and by-
laws did not constitute misrepresentation so as to warrant the cancellation of
Samahan's certificate of registration. Hanjin failed to indicate how this phrase
constitutes a malicious and deliberate misrepresentation. Neither was there any
showing that the alleged misrepresentation was serious in character. Misrepresentation
is a devious charge that cannot simply be entertained by mere surmises and
conjectures.

Even granting arguendo that Samahan's members misrepresented themselves as


employees or workers of Hanjin, said misrepresentation does not relate to the adoption
or ratification of its constitution and by-laws or to the election of its officers.

Removal of the word "Hanjin Shipyard" from the association's name, however, does not
infringe on Samahan's right to self-organization

Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in
the name of the association. A legitimate workers' association refers to an association of
workers organized for mutual aid and protection of its members or for any legitimate
purpose other than collective bargaining registered with the DOLE.59 Having been
granted a certificate of registration, Samahan's association is now recognized by law as
a legitimate workers' association.

According to Samahan, inherent in the workers' right to self-organization is its right to


name its own organization. It seems to equate the dropping of words "Hanjin Shipyard"
from its name as a restraint in its exercise of the right to self-organization. Hanjin, on the
other hand, invokes that "Hanjin Shipyard" is a registered trade name and, thus, it is
within their right to prohibit its use.

As there is no provision under our labor laws which speak of the use of name by a
workers' association, the Court refers to the Corporation Code, which governs the
names of juridical persons. Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange Commission if the
proposed name is identical or deceptively or confusingly similar to that of any
existing corporation or to any other name already protected by law or is patently
deceptive, confusing or contrary to existing laws. When a change in the corporate name
is approved, the Commission shall issue an amended certificate of incorporation under
the amended name.

[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a corporate
name which is "identical or deceptively or confusingly similar" to that of any existing

20
corporation or which is "patently deceptive" or "patently confusing" or "contrary to
existing laws," is the avoidance of fraud upon the public which would have occasion to
deal with the entity concerned, the evasion of legal obligations and duties, and the
reduction of difficulties of administration and supervision over corporations. 60

For the same reason, it would be misleading for the members of Samahan to use
"Hanjin Shipyard" in its name as it could give the wrong impression that all of its
members are employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:
The change of name of a labor organization shall not affect its legal personality. All the
rights and obligations of a labor organization under its old name shall continue to be
exercised by the labor organization under its new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement
of Samahan's right to self-organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and
the January 28, 2014 Resolution of the Court of Appeals are
hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution of the Bureau
of Labor Relations, as modified by its November 28, 2011 Resolution, is REINSTATED.

SO ORDERED.chanroblesvirtuallawlibrary

Brion,*(Acting Chairperson), Peralta,**Del Castillo, and Leonen, JJ., concur.

21
THIRD DIVISION

[G.R. NO. 171153 : September 12, 2007]

SAN MIGUEL CORPORATION EMPLOYEES UNION PHILIPPINE TRANSPORT AND


GENERAL WORKERS ORGANIZATION (SMCEU PTGWO), Petitioner, v. SAN
MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEU PDMP),Respondent 1 .

DECISION

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court,
petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays
that this Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the Court
of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19 February 2001 of
the Bureau of Labor Relations (BLR) of the Department of Labor and Employment
(DOLE) which upheld the Certificate of Registration of respondent SAN MIGUEL
PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEU PDMP); and (b) the Resolution4dated 16
January 2006 of the Court of Appeals in the same case, denying petitioner's Motion for
Reconsideration of the aforementioned Decision.

The following are the antecedent facts:

Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the
regular monthly-paid rank and file employees of the three divisions of San Miguel
Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel
Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all
offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna.
It had been the certified bargaining agent for 20 years - from 1987 to 1997.

Respondent is registered as a chapter of PambansangDiwa ng Manggagawang Pilipino


(PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999. 5 In
compliance with registration requirements, respondent submitted the requisite
documents to the BLR for the purpose of acquiring legal personality.6 Upon submission
of its charter certificate and other documents, respondent was issued Certificate of
Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999.7 Thereafter,
respondent filed with the Med-Arbiter of the DOLE Regional Officer in the National

22
Capital Region (DOLE-NCR), three separate petitions for certification election to
represent SMPP, SMCSU, and SMBP.8 All three petitions were dismissed, on the
ground that the separate petitions fragmented a single bargaining unit.9

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondent's registration and its dropping from the rolls of legitimate
labor organizations. In its petition, petitioner accused respondent of committing fraud
and falsification, and non-compliance with registration requirements in obtaining its
certificate of registration. It raised allegations that respondent violated Articles 239(a),
(b) and (c)10 and 234(c)11 of the Labor Code. Moreover, petitioner claimed that PDMP is
not a legitimate labor organization, but a trade union center, hence, it cannot directly
create a local or chapter. The petition was docketed as Case No. NCR-OD-9908-007-
IRD.12

On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order


dismissing the allegations of fraud and misrepresentation, and irregularity in the
submission of documents by respondent. Regional Director Lim further ruled that
respondent is allowed to directly create a local or chapter. However, he found that
respondent did not comply with the 20% membership requirement and, thus, ordered
the cancellation of its certificate of registration and removal from the rolls of legitimate
labor organizations.13Respondent appealed to the BLR. In a Decision dated 19
February 2001, it declared:

As a chartered local union, appellant is not required to submit the number of employees
and names of all its members comprising at least 20% of the employees in the
bargaining unit where it seeks to operate. Thus, the revocation of its registration based
on non-compliance with the 20% membership requirement does not have any basis in
the rules.

Further, although PDMP is considered as a trade union center, it is a holder of


Registration Certificate No. FED-11558-LC issued by the BLR on 14 February 1991,
which bestowed upon it the status of a legitimate labor organization with all the rights
and privileges to act as representative of its members for purposes of collective
bargaining agreement. On this basis, PDMP can charter or create a local, in accordance
with the provisions of Department Order No. 9.

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the


Regional Director dated July 14, 2000, canceling the registration of appellant San
Miguel Packaging Products Employees Union-PambansangDiwa ng
ManggagawangPilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant
shall hereby remain in the roster of legitimate labor organizations.14

While the BLR agreed with the findings of the DOLE Regional Director dismissing the
allegations of fraud and misrepresentation, and in upholding that PDMP can directly
create a local or a chapter, it reversed the Regional Director's ruling that the 20%
membership is a requirement for respondent to attain legal personality as a labor

23
organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a
Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-
IRD), the BLR denied the Motion for Reconsideration and affirmed its Decision dated 19
February 2001.15

Invoking the power of the appellate court to review decisions of quasi-judicial agencies,
petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the
1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of
Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the
Decision of the BLR, ruling as follows:

In Department Order No. 9, a registered federation or national union may directly create
a local by submitting to the BLR copies of the charter certificate, the local's constitution
and by-laws, the principal office address of the local, and the names of its officers and
their addresses. Upon complying with the documentary requirements, the local shall be
issued a certificate and included in the roster of legitimate labor organizations. The
[herein respondent] is an affiliate of a registered federation PDMP, having been issued
a charter certificate. Under the rules we have reviewed, there is no need for SMPPEU to
show a membership of 20% of the employees of the bargaining unit in order to be
recognized as a legitimate labor union.

x xx

In view of the foregoing, the assailed decision and resolution of the BLR are
AFFIRMED, and the petition is DISMISSED.16

Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied


petitioner's Motion for Reconsideration of the aforementioned Decision.

Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where
petitioner raises the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED


REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT
REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF ALL ITS
MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE
BARGAINING UNIT WHERE IT SEEKS TO OPERATE.

The present petition questions the legal personality of respondent as a legitimate labor
organization.

Petitioner posits that respondent is required to submit a list of members comprising at


least 20% of the employees in the bargaining unit before it may acquire legitimacy,
citing Article 234(c) of the Labor Code which stipulates that any applicant labor
organization, association or group of unions or workers shall acquire legal personality
and shall be entitled to the rights and privileges granted by law to legitimate labor

24
organizations upon issuance of the certificate of registration based on the following
requirements:

A. Fifty pesos (P50.00) registration fee;

b. The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;

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;

d. If the applicant union has been in existence for one or more years, copies of its
annual financial reports; andcralawlibrary

e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification and the list of the members who participated in it. 17

Petitioner also insists that the 20% requirement for registration of respondent must be
based not on the number of employees of a single division, but in all three divisions of
the company in all the offices and plants of SMC since they are all part of one
bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective Bargaining
Agreement (CBA),18 quoted hereunder:

ARTICLE 1

SCOPE

Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this
Agreement consists of all regular rank and file employees paid on the basis of fixed
salary per month and employed by the COMPANY in its Corporate Staff Units (CSU),
San Miguel Brewing Products (SMBP) and San Miguel Packaging Products (SMPP)
and in different operations existing in the City of Manila and suburbs, including Metal
Closure and Lithography Plant located at Canlubang, Laguna subject to the provisions
of Article XV of this Agreement provided however, that if during the term of this
Agreement, a plant within the territory covered by this Agreement is transferred outside
but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro
Manila, the employees in the transferred plant shall remain in the bargaining unit
covered by this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this 20%
membership requirement since it based its membership on the number of employees of
a single division only, namely, the SMPP.

There is merit in petitioner's contentions.

25
A legitimate labor organization19 is defined as "any labor organization duly registered
with the Department of Labor and Employment, and includes any branch or local
thereof."20 The mandate of the Labor Code is to ensure strict compliance with the
requirements on registration because a legitimate labor organization is entitled to
specific rights under the Labor Code,21 and are involved in activities directly affecting
matters of public interest. Registration requirements are intended to afford a measure of
protection to unsuspecting employees who may be lured into joining unscrupulous or
fly-by-night unions whose sole purpose is to control union funds or use the labor
organization for illegitimate ends.22Legitimate labor organizations have exclusive rights
under the law which cannot be exercised by non-legitimate unions, one of which is the
right to be certified as the exclusive representative23 of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining. 24 The
acquisition of rights by any union or labor organization, particularly the right to file a
petition for certification election, first and foremost, depends on whether or not the labor
organization has attained the status of a legitimate labor organization. 25

A perusal of the records reveals that respondent is registered with the BLR as a "local"
or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999.
Hence, respondent was directly chartered by PDMP.

The procedure for registration of a local or chapter of a labor organization is provided in


Book V of the Implementing Rules of the Labor Code, as amended by Department
Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40
dated 17 February 2003. The Implementing Rules as amended by D.O. No. 9 should
govern the resolution of the petition at bar since respondent's petition for certification
election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26

The applicable Implementing Rules enunciates a two-fold procedure for the creation of
a chapter or a local. The first involves the affiliation of an independent union with a
federation or national union or industry union. The second, finding application in the
instant petition, involves the direct creation of a local or a chapter through the process of
chartering.27

A duly registered federation or national union may directly create a local or chapter by
submitting to the DOLE Regional Office or to the BLR two copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation
or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of
the local/chapter; andcralawlibrary

(c) The local/chapter's constitution and by-laws; Provided, That where the
local/chapter's constitution and by-laws is the same as that of the federation or national
union, this fact shall be indicated accordingly.

26
All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President.28

The Implementing Rules stipulate that a local or chapter may be directly created by
a federation or national union. A duly constituted local or chapter created in accordance
with the foregoing shall acquire legal personality from the date of filing of the complete
documents with the BLR.29 The issuance of the certificate of registration by the BLR or
the DOLE Regional Office is not the operative act that vests legal personality upon a
local or a chapter under Department Order No. 9. Such legal personality is acquired
from the filing of the complete documentary requirements enumerated in Section 1,
Rule VI.30

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department


Order No. 9, violated Article 234 of the Labor Code when it provided for less stringent
requirements for the creation of a chapter or local. This Court disagrees.

Article 234 of the Labor Code provides that an independent labor


organization acquires legitimacy only upon its registration with the BLR:

Any applicant labor organization, association or group of unions or workers 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:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;

(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;

(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; andcralawlibrary

(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it. (Italics
supplied.)

It is emphasized that the foregoing pertains to the registration of an independent labor


organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court, in
the landmark case of Progressive Development Corporation v. Secretary, Department
of Labor and Employment,31 declared that when an unregistered union becomes a

27
branch, local or chapter, some of the aforementioned requirements for registration are
no longer necessary or compulsory. Whereas an applicant for registration of an
independent union is mandated to submit, among other things, the number of
employees and names of all its members comprising at least 20% of the employees in
the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor
Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no
longer required of a branch, local or chapter.32 The intent of the law in imposing less
requirements in the case of a branch or local of a registered federation or national union
is to encourage the affiliation of a local union with a federation or national union in order
to increase the local union's bargaining powers respecting terms and conditions of
labor.33

Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department


Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is
no inconsistency between the Labor Code and Department Order No. 9.

As to petitioner's claims that respondent obtained its Certificate of Registration through


fraud and misrepresentation, this Court finds that the imputations are not impressed
with merit. In the instant case, proof to declare that respondent committed fraud and
misrepresentation remains wanting. This Court had, indeed, on several occasions,
pronounced that registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized, which, at best,
holds on to a mere scrap of paper. Under such circumstances, the labor organization,
not being a legitimate labor organization, acquires no rights.35

This Court emphasizes, however, that a direct challenge to the legitimacy of a labor
organization based on fraud and misrepresentation in securing its certificate of
registration is a serious allegation which deserves careful scrutiny. Allegations thereof
should be compounded with supporting circumstances and evidence. The records of the
case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this
doctrine applies with greater force in labor cases. Findings of fact of administrative
agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally accorded not only
great respect but even finality.36

Still, petitioner postulates that respondent was not validly and legitimately created, for
PDMP cannot create a local or chapter as it is not a legitimate labor organization, it
being a trade union center.

Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as


a labor organization. Firstly, this line of reasoning attempts to predicate that a trade
union center is not a legitimate labor organization. In the process, the legitimacy of
PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that
a trade union center cannot directly create a local or chapter through the process of
chartering.

28
Anent the foregoing, as has been held in a long line of cases, the legal personality of a
legitimate labor organization, such as PDMP, cannot be subject to a collateral attack.
The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended,
defines a legitimate labor organization37 as "any labor organization duly registered with
the DOLE, and includes any branch or local thereof."38 On the other hand, a trade union
center is any group of registered national unions or federations organized for the mutual
aid and protection of its members; for assisting such members in collective bargaining;
or for participating in the formulation of social and employment policies, standards, and
programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules.39

The Implementing Rules stipulate that a labor organization shall be deemed registered
and vested with legal personality on the date of issuance of its certificate of registration.
Once a certificate of registration is issued to a union, its legal personality cannot be
subject to collateral attack.40 It may be questioned only in an independent petition for
cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.
The aforementioned provision is enunciated in the following:

Sec. 5. Effect of registration. The labor organization or workers' association shall be


deemed registered and vested with legal personality on the date of issuance of its
certificate of registration. Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an independent petition for cancellation
in accordance with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate No.
FED-11558-LC by the BLR on 14 February 1991. Until the certificate of registration of
PDMP is cancelled, its legal personality as a legitimate labor organization subsists.
Once a union acquires legitimate status as a labor organization, it continues to be
recognized as such until its certificate of registration is cancelled or revoked in an
independent action for cancellation.41 It bears to emphasize that what is being directly
challenged is the personality of respondent as a legitimate labor organization and not
that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain
questions indirectly impugning the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate
labor organization,42and continues to be recognized as such until its certificate of
registration is successfully impugned and thereafter cancelled or revoked in an
independent action for cancellation.

We now proceed to the contention that PDMP cannot directly create a local or a
chapter, it being a trade union center.

This Court reverses the finding of the appellate court and BLR on this ground, and rules
that PDMP cannot directly create a local or chapter.

29
After an exhaustive study of the governing labor law provisions, both statutory and
regulatory,43 we find no legal justification to support the conclusion that a trade union
center is allowed to directly create a local or chapter through chartering. Apropos, we
take this occasion to reiterate the first and fundamental duty of this Court, which is to
apply the law. The solemn power and duty of the Court to interpret and apply the law
does not include the power to correct by reading into the law what is not written
therein.44

Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972.
Being a legislation on social justice,45 the provisions of the Labor Code and the
Implementing Rules have been subject to several amendments, and they continue to
evolve, considering that labor plays a major role as a socio-economic force. The Labor
Code was first amended by Republic Act No. 6715, and recently, by Republic Act No.
9481. Incidentally, the term trade union center was never mentioned under Presidential
Decree No. 442, even as it was amended by Republic Act No. 6715. The term trade
union center was first adopted in the Implementing Rules, under Department Order No.
9.

Culling from its definition as provided by Department Order No. 9, a trade union
center is any group of registered national unions or federations organized for the mutual
aid and protection of its members; for assisting such members in collective bargaining;
or for participating in the formulation of social and employment policies, standards, and
programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules.46 The same rule provides that the application for registration of
an industry or trade union center shall be supported by the following:

(a) The list of its member organizations and their respective presidents and, in the case
of an industry union, the industry where the union seeks to operate;

(b) The resolution of membership of each member organization, approved by the Board
of Directors of such union;

(c) The name and principal address of the applicant, the names of its officers and their
addresses, the minutes of its organizational meeting/s, and the list of member
organizations and their representatives who attended such meeting/s; andcralawlibrary

(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of
the presidents of the member organizations, provided that where the ratification was
done simultaneously with the organizational meeting, it shall be sufficient that the fact of
ratification be included in the minutes of the organizational meeting. 47

Evidently, while a "national union" or "federation" is a labor organization with at least ten
locals or chapters or affiliates, each of which must be a duly certified or recognized
collective bargaining agent;48a trade union center, on the other hand, is composed of a
group of registered national unions or federations.49

30
The Implementing Rules, as amended by Department Order No. 9, provide that "a duly
registered federation or national union" may directly create a local or chapter. The
provision reads:

Section 1. Chartering and creation of a local/chapter. - A duly registered federation or


national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation
or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of
the local/chapter; andcralawlibrary

(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact
shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President.50

Department Order No. 9 mentions two labor organizations either of which is allowed to
directly create a local or chapter through chartering - a duly registered federation or
a national union. Department Order No. 9 defines a "chartered local" as a labor
organization in the private sector operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a duly registered federation or
national union and reported to the Regional Office in accordance with Rule III, Section
2-E of these Rules.51

Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to
Self-Organization, Amending for the Purpose Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the Philippines" lapsed 52 into law on
25 May 2007 and became effective on 14 June 2007.53 This law further amends the
Labor Code provisions on Labor Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines, is hereby further amended to read as follows:

ART. 234. Requirements of Registration. - A federation, national union or industry


or trade union center or an independent union 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:

(a) Fifty pesos (P50.00) registration fee;

31
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;

(c) In case the applicant is an independent union, 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;

(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; andcralawlibrary

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it.

SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to
read as follows:

ART. 234-A. Chartering and Creation of a Local Chapter. - A duly registered federation
or national union may directly create a local chapter by issuing a charter certificate
indicating the establishment of the local chapter. The chapter shall acquire legal
personality only for purposes of filing a petition for certification election from the date it
was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the following documents in addition to its
charter certificate:

(a) The names of the chapter's officers, their addresses, and the principal office of the
chapter; andcralawlibrary

(b) The chapter's constitution and by-laws: Provided, That where the chapter's
constitution and by-laws are the same as that of the federation or the national union,
this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or
treasurer of the chapter and attested by its president. (Emphasis ours.)

Article 234 now includes the term trade union center, but interestingly, the provision
indicating the procedure for chartering or creating a local or chapter, namely Article 234-
A, still makes no mention of a "trade union center."

Also worth emphasizing is that even in the most recent amendment of the implementing
rules,54 there was no mention of a trade union center as being among the labor
organizations allowed to charter.

32
This Court deems it proper to apply the Latin maxim expressiouniusestexclusioalterius.
Under this maxim of statutory interpretation, the expression of one thing is the exclusion
of another. When certain persons or things are specified in a law, contract, or will, an
intention to exclude all others from its operation may be inferred. If a statute specifies
one exception to a general rule or assumes to specify the effects of a certain provision,
other exceptions or effects are excluded.55 Where the terms are expressly limited to
certain matters, it may not, by interpretation or construction, be extended to other
matters.56Such is the case here. If its intent were otherwise, the law could have so
easily and conveniently included "trade union centers" in identifying the labor
organizations allowed to charter a chapter or local. Anything that is not included in the
enumeration is excluded therefrom, and a meaning that does not appear nor is intended
or reflected in the very language of the statute cannot be placed therein. 57 The rule is
restrictive in the sense that it proceeds from the premise that the legislating body would
not have made specific enumerations in a statute if it had the intention not to restrict its
meaning and confine its terms to those expressly mentioned.58 Expressiumfacitcessare
tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro
omissohabendus est. A person, object or thing omitted must have been omitted
intentionally.

Therefore, since under the pertinent status and applicable implementing rules, the
power granted to labor organizations to directly create a chapter or local through
chartering is given to a federation or national union, then a trade union center is without
authority to charter directly.

The ruling of this Court in the instant case is not a departure from the policy of the law to
foster the free and voluntary organization of a strong and united labor movement, 60 and
thus assure the rights of workers to self-organization.61 The mandate of the Labor Code
in ensuring strict compliance with the procedural requirements for registration is not
without reason. It has been observed that the formation of a local or chapter becomes a
handy tool for the circumvention of union registration requirements. Absent the
institution of safeguards, it becomes a convenient device for a small group of
employees to foist a not-so-desirable federation or union on unsuspecting co-workers
and pare the need for wholehearted voluntariness, which is basic to free unionism.62 As
a legitimate labor organization is entitled to specific rights under the Labor Code and
involved in activities directly affecting public interest, it is necessary that the law afford
utmost protection to the parties affected.63 However, as this Court has enunciated
in Progressive Development Corporation v. Secretary of Department of Labor and
Employment, it is not this Court's function to augment the requirements prescribed by
law. Our only recourse, as previously discussed, is to exact strict compliance with what
the law provides as requisites for local or chapter formation.64

In sum, although PDMP as a trade union center is a legitimate labor organization, it has
no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created
under the more lenient requirements for chartering, but must have complied with the
more stringent rules for creation and registration of an independent union, including the
20% membership requirement.

33
WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of
the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The
Certificate of Registration of San Miguel Packaging Products Employees Union
PambansangDiwa ng Manggagawang Pilipino is ORDERED CANCELLED, and
SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, J., Chairperson, Austria-Martinez, Nachura, Reyes, JJ., concur.

34
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 177024 October 30, 2009

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA


HOTEL CORPORATION)Petitioner,
vs.
PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE
MANILA (PIGLAS-HERITAGE),Respondent.

DECISION

ABAD, J.:

This case is about a company’s objections to the registration of its rank and file union
for non-compliance with the requirements of its registration.

The Facts and the Case

Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila
(petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union).
The Department of Labor and Employment-National Capital Region (DOLE-NCR) later
issued a certificate of registration1 to this union.

Subsequently, the HHE union filed a petition for certification election2 that petitioner
company opposed. The company alleged that the HHE union misrepresented itself to
be an independent union, when it was, in truth, a local chapter of the National Union of
Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN). The company
claimed that the HHE union intentionally omitted disclosure of its affiliation with
NUWHRAIN because the company’s supervisors union was already affiliated with
it.3 Thus, the company also filed a petition for the cancellation of the HHE union’s
registration certificate.4

Meanwhile, the Med-Arbiter granted the HHE union’s petition for certification
election.5 Petitioner company appealed the decision to the Secretary of Labor but the
latter denied the appeal.6 The Secretary also denied petitioner’s motion for
reconsideration, prompting the company to file a petition for certiorari7 with the Court of
Appeals.

On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding
of the HHE union’s certification election, effective until the petition for cancellation of
that union’s registration shall have been resolved with finality.8 The decision of the Court

35
of Appeals became final when the HHE union withdrew the petition for review that it filed
with this Court.9

On December 10, 2003 certain rank and file employees of petitioner company held a
meeting and formed another union, the respondent Pinag-IsangGaling at Lakas ng
mgaManggagawasa Heritage Manila (the PIGLAS union). This union applied for
registration with the DOLE-NCR10 and got its registration certificate on February 9,
2004. Two months later, the members of the first union, the HHE union, adopted a
resolution for its dissolution. The HHE union then filed a petition for cancellation of its
union registration.11

On September 4, 2004 respondent PIGLAS union filed a petition for certification


election12 that petitioner company also opposed, alleging that the new union’s officers
and members were also those who comprised the old union. According to the company,
the employees involved formed the PIGLAS union to circumvent the Court of Appeals’
injunction against the holding of the certification election sought by the former union.
Despite the company’s opposition, however, the Med-Arbiter granted the petition for
certification election.13

On December 6, 2004 petitioner company filed a petition to cancel the union registration
of respondent PIGLAS union.14 The company claimed that the documents submitted
with the union’s application for registration bore the following false information:

(a) The List of Members showed that the PIGLAS union had 100 union
members;15

(b) The Organizational Minutes said that 90 employees attended the meeting on
December 10, 2003;16

(c) The Attendance Sheet of the meeting of December 10, 2003 bore the
signature of 127 members who ratified the union’s Constitution and By-
Laws;17 and

(d) The Signature Sheet bore 128 signatures of those who attended that
meeting.18

Petitioner company alleged that the misrepresentation was evidenced by the


discrepancy in the number of union members appearing in the application and the list as
well as in the number of signatories to the attendance and signature sheets. The
minutes reported that only 90 employees attended the meeting. The company further
alleged that 33 members of respondent PIGLAS union were members of the defunct
HHE union. This, according to the company, violated the policy against dual unionism
and showed that the new union was merely an alter ego of the old.

On February 22, 2005 the DOLE-NCR denied the company’s petition to cancel
respondent PIGLAS union’s registration for the reason that the discrepancies in the

36
number of members stated in the application’s supporting documents were not material
and did not constitute misrepresentation. As for the charge of dual unionism, the same
is not a ground for canceling registration. It merely exposed a union member to a
possible charge of disloyalty, an internal matter. Here, the members of the former union
simply exercised their right to self-organization and to the freedom of association when
they subsequently joined the PIGLAS union.19

On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It
reasoned that respondent PIGLAS union’s organization meeting lasted for 12 hours. It
was possible for the number of attendees to have increased from 90 to 128 as the
meeting progressed. Besides, with a total of 250 employees in the bargaining unit, the
union needed only 50 members to comply with the 20 percent membership requirement.
Thus, the union could not be accused of misrepresentation since it did not pad its
membership to secure registration.

As for the issue of dual unionism, it has become moot and academic, said the BLR,
because of the dissolution of the old union and the cancellation of its certificate of
registration.20

Petitioner company filed a petition for certiorari with the Court of Appeals, 21 assailing the
order of the BLR. But the latter court dismissed the petition, not being accompanied by
material documents and portions of the record.22 The company filed a motion for
reconsideration, attaching parts of the record that were deemed indispensable but the
court denied it for lack of merit.23 Hence, the company filed this petition for review under
Rule 45.

Issues Presented

The petition presents the following issues:

1. Whether or not the Court of Appeals erred in dismissing the petition for
certiorari before it for failure of petitioner company to attach certain material
portions of the record;

2. Whether or not the union made fatal misrepresentation in its application for
union registration; and

3. Whether or not "dual unionism" is a ground for canceling a union’s registration.

The Rulings of the Court

First. While the Court of Appeals correctly dismissed the company’s petition initially for
failure to attach material portions of the record, the court should have bended back a
little when petitioner company subsequently attached those missing materials to its
motion for reconsideration. As a general rule, petitions for certiorari that lack copies of

37
essential pleadings and portions of the record may be dismissed but this rule has not
been regarded as absolute. The omission may be cured.24

The Court of Appeals has three courses of action when the annexes to the petition are
insufficient. It may dismiss the petition,25 require the submission of the relevant
documents, or order the filing of an amended petition with the required pleadings or
documents. A petition lacking in essential pleadings or portions of the record may still
be given due course, or reinstated if earlier dismissed, upon subsequent submission of
the necessary documents or to serve the higher interest of justice.26

Second. Since a remand of the case to the Court of Appeals for a determination of the
substantive issues will only result in more delays and since these issues have been
amply argued by the opposing sides in the various pleadings and documents they
submitted to this Court, the case may now be resolved on the merits.

Did respondent PIGLAS union commit fraud and misrepresentation in its application for
union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for
the evident discrepancies as to the number of union members involved as these
appeared on the documents that supported the union’s application for registration,
petitioner company has no other evidence of the alleged misrepresentation. But those
discrepancies alone cannot be taken as an indication that respondent misrepresented
the information contained in these documents.

The charge that a labor organization committed fraud and misrepresentation in securing
its registration is a serious charge and deserves close scrutiny. It is serious because
once such charge is proved, the labor union acquires none of the rights accorded to
registered organizations. Consequently, charges of this nature should be clearly
established by evidence and the surrounding circumstances.27

Here, the discrepancies in the number of union members or employees stated in the
various supporting documents that respondent PIGLAS union submitted to labor
authorities can be explained. While it appears in the minutes of the December 10, 2003
organizational meeting that only 90 employees responded to the roll call at the
beginning, it cannot be assumed that such number could not grow to 128 as reflected
on the signature sheet for attendance. The meeting lasted 12 hours from 11:00 a.m. to
11:00 p.m. There is no evidence that the meeting hall was locked up to exclude late
attendees.1 a vv p h i 1

There is also nothing essentially mysterious or irregular about the fact that only 127
members ratified the union’s constitution and by-laws when 128 signed the attendance
sheet. It cannot be assumed that all those who attended approved of the constitution
and by-laws. Any member had the right to hold out and refrain from ratifying those
documents or to simply ignore the process.

At any rate, the Labor Code28 and its implementing rules29 do not require that the
number of members appearing on the documents in question should completely

38
dovetail. For as long as the documents and signatures are shown to be genuine and
regular and the constitution and by-laws democratically ratified, the union is deemed to
have complied with registration requirements.

Petitioner company claims that respondent PIGLAS union was required to submit the
names of all its members comprising at least 20 percent of the employees in the
bargaining unit. Yet the list it submitted named only 100 members notwithstanding that
the signature and attendance sheets reflected a membership of 127 or 128 employees.
This omission, said the company, amounted to material misrepresentation that
warranted the cancellation of the union’s registration.

But, as the labor authorities held, this discrepancy is immaterial. A comparison of the
documents shows that, except for six members, the names found in the subject list are
also in the attendance and signature sheets. Notably, the bargaining unit that
respondent PIGLAS union sought to represent consisted of 250 employees. Only 20
percent of this number or 50 employees were required to unionize. Here, the union
more than complied with such requirement.

Labor laws are liberally construed in favor of labor especially if doing so would affirm its
constitutionally guaranteed right to self-organization.30 Here, the PIGLAS union’s
supporting documents reveal the unmistakable yearning of petitioner company’s rank
and file employees to organize. This yearning should not be frustrated by
inconsequential technicalities.

Third. The fact that some of respondent PIGLAS union’s members were also members
of the old rank and file union, the HHE union, is not a ground for canceling the new
union’s registration. The right of any person to join an organization also includes the
right to leave that organization and join another one. Besides, HHE union is dead. It had
ceased to exist and its certificate of registration had already been cancelled. Thus,
petitioner’s arguments on this point may also be now regarded as moot and academic.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau
of Labor Relations in BLR-A-26-3-05 dated May 26, 2006.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

39
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 178989 March 18, 2010

EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner,


vs.
COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION
(EREU), Respondents.

DECISION

VELASCO, JR., J.:

In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country Club (Eagle
Ridge) assails and seeks to nullify the Resolutions of the Court of Appeals (CA) dated
April 27, 20071 and June 6, 2007,2 issued in CA-G.R. SP No. 98624, denying a similar
recourse petitioner earlier interposed to set aside the December 21, 2006 Decision 3 of
the Bureau of Labor Relations (BLR), as reiterated in a Resolution4 of March 7, 2007.

Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf


courses. It had, at the end of CY 2005, around 112 rank-and-file employees. The instant
case is an off-shot of the desire of a number of these employees to organize
themselves as a legitimate labor union and their employer’s opposition to their
aspiration.

The Facts

On December 6, 2005, at least 20% of Eagle Ridge’s rank-and-file employees—the


percentage threshold required under Article 234(c) of the Labor Code for union
registration—had a meeting where they organized themselves into an independent
labor union, named "Eagle Ridge Employees Union" (EREU or Union),5 elected a set of
officers,6and ratified7 their constitution and by-laws.8

On December 19, 2005, EREU formally applied for registration9 and filed BLR Reg.
Form No. I-LO, s. 199810 before the Department of Labor and Employment (DOLE)
Regional Office IV (RO IV). In time, DOLE RO IV granted the application and issued
EREU Registration Certificate (Reg. Cert.) No. RO400-200512-UR-003.

The EREU then filed a petition for certification election in Eagle Ridge Golf & Country
Club, docketed as Case No. RO400-0601-RU-002. Eagle Ridge opposed this
petition,11 followed by its filing of a petition for the cancellation12 of Reg. Cert. No.
RO400-200512-UR-003. Docketed as RO400-0602-AU-003, Eagle Ridge’s petition

40
ascribed misrepresentation, false statement, or fraud to EREU in connection with the
adoption of its constitution and by-laws, the numerical composition of the Union, and the
election of its officers.

Going into specifics, Eagle Ridge alleged that the EREU declared in its application for
registration having 30 members, when the minutes of its December 6, 2005
organizational meeting showed it only had 26 members. The misrepresentation was
exacerbated by the discrepancy between the certification issued by the Union secretary
and president that 25 members actually ratified the constitution and by-laws on
December 6, 2005 and the fact that 26 members affixed their signatures on the
documents, making one signature a forgery.

Finally, Eagle Ridge contended that five employees who attended the organizational
meeting had manifested the desire to withdraw from the union. The five executed
individual affidavits or Sinumpaang Salaysay13 on February 15, 2006, attesting that they
arrived late at said meeting which they claimed to be drinking spree; that they did not
know that the documents they signed on that occasion pertained to the organization of a
union; and that they now wanted to be excluded from the Union. The withdrawal of the
five, Eagle Ridge maintained, effectively reduced the union membership to 20 or 21,
either of which is below the mandatory minimum 20% membership requirement under
Art. 234(c) of the Labor Code. Reckoned from 112 rank-and-file employees of Eagle
Ridge, the required number would be 22 or 23 employees.

As a counterpoint, EREU, in its Comment,14 argued in gist:

1) the petition for cancellation was procedurally deficient as it does not contain a
certification against forum shopping and that the same was verified by one not
duly authorized by Eagle Ridge’s board;

2) the alleged discrepancies are not real for before filing of its application on
December 19, 2005, four additional employees joined the union on December 8,
2005, thus raising the union membership to 30 members as of December 19,
2005;

3) the understatement by one member who ratified the constitution and by-laws
was a typographical error, which does not make it either grave or malicious
warranting the cancellation of the union’s registration;

4) the retraction of 5 union members should not be given any credence for the
reasons that: (a) the sworn statements of the five retracting union members sans
other affirmative evidence presented hardly qualify as clear and credible
evidence considering the joint affidavits of the other members attesting to the
orderly conduct of the organizational meeting; (b) the retracting members did not
deny signing the union documents; (c) following, Belyca Corporation v. Ferrer-
Calleja15 and Oriental Tin Can Labor Union v. Secretary of Labor and
Employment,16 it can be presumed that "duress, coercion or valuable

41
consideration" was brought to bear on the retracting members; and (d) citing La
Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor
Relations,17 Belyca Corporation and Oriental Tin Can Labor Union, where the
Court ruled that "once the required percentage requirement has been reached,
the employees’ withdrawal from union membership taking place after the filing of
the petition for certification election will not affect the petition," it asserted the
applicability of said ruling as the petition for certification election was filed on
January 10, 2006 or long before February 15, 2006 when the affidavits of
retraction were executed by the five union members, thus contending that the
retractions do not affect nor be deemed compelling enough to cancel its
certificate of registration.

The Union presented the duly accomplished union membership forms18 dated
December 8, 2005 of four additional members. And to rebut the allegations in the
affidavits of retraction of the five union members, it presented the Sama-
SamangSinumpaang Salaysay19 dated March 20, 2006 of eight union members;
another Sama-SamangSinumpaang Salaysay,20 also bearing date March 20, 2006, of
four other union members; and the Sworn Statement21 dated March 16, 2006 of the
Union’s legal counsel, Atty. Domingo T. Añonuevo. These affidavits attested to the
orderly and proper proceedings of the organizational meeting on December 6, 2005.

In its Reply,22 Eagle Ridge reiterated the grounds it raised in its petition for cancellation
and asserted further that the four additional members were fraudulently admitted into
the Union. As Eagle Ridge claimed, the applications of the four neither complied with
the requirements under Section 2, Art. IV of the union’s constitution and by-laws nor
were they shown to have been duly received, issued receipts for admission fees,
processed with recommendation for approval, and approved by the union president.

Moreover, Eagle Ridge presented another Sinumpaang Salaysay23 of retraction dated


March 15, 2006 of another union member. The membership of EREU had thus been
further reduced to only 19 or 20. This same member was listed in the first Sama-
SamangSinumpaang Salaysay24 presented by the Union but did not sign it.

The Ruling of the DOLE Regional Director

After due proceedings, the DOLE Regional Director, Region IV-A, focusing on the
question of misrepresentation, issued on April 28, 2006 an Order25 finding for Eagle
Ridge, its petition to cancel Reg. Cert. No. RO400-200512-UR-003 being granted and
EREU being delisted from the roster of legitimate labor organizations.

Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR A-C-30-5-31-
06 (Case No. RO400-0602-AU-003).

The Ruling of the BLR

42
Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed26 the appealed
order of the DOLE Regional Director.

Undeterred by successive set backs, EREU interposed a motion for reconsideration,


contending that:

1) Contrary to the ruling of the BLR OIC Director, a certificate of non-forum


shopping is mandatory requirement, under Department Order No. (DO) 40-03
and the Rules of Court, non-compliance with which is a ground to dismiss a
petition for cancellation of a certificate of registration;

2) It was erroneous for both the Regional Director and the BLR OIC Director to
give credence to the retraction statements of union members which were not
presented for reaffirmation during any of the hearings of the case, contrary to the
requirement for the admission of such evidence under Sec. 11, Rule XI of DO 40-
03.

In a Decision dated December 21, 2006, the BLR, now headed by Director Rebecca C.
Chato, set aside the July 28, 2006 order of the BLR OIC Director, disposing as follows:

WHEREFORE, the motion for reconsideration is hereby GRANTED and our Resolution
dated 28 July 2006 is hereby VACATED. Accordingly, the Eagle Ridge Employees
Union (EREU) shall remain in the roster of legitimate organizations.

In finding for the Union, the BLR Director eschewed procedural technicalities.
Nonetheless, she found as without basis allegations of misrepresentation or fraud as
ground for cancellation of EREU’s registration.

In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLR’s
Resolution dated March 7, 2007.

Eagle Ridge thereupon went to the CA on a petition for certiorari.

The Ruling of the CA

On April 27, 2007, the appellate court, in a terse two-page Resolution,27 dismissed
Eagle Ridge’s petition for being deficient, as:

1. the questioned [BLR] Decision dated December 21, 2006 and the Resolution
dated March 7, 2007 Resolution [appended to the petition] are mere machine
copies; and

2. the verification and certification of non-forum shopping was subscribed to by


Luna C. Piezas on her representation as the legal counsel of the petitioner, but
sans [the requisite] Secretary’s Certificate or Board Resolution authorizing her to
execute and sign the same.

43
The CA later denied, in its second assailed resolution, Eagle Ridge’s motion for
reconsideration, albeit the latter had submitted a certificate to show that its legal counsel
has been authorized, per a board resolution, to represent the corporation.

The Issues

Eagle Ridge is now before us via this petition for certiorari on the submissions that:

I.

[THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISMISSING THE
COMPANY’S PETITION FOR CERTIORARI AND DENYING ITS MOTION FOR
RECONSIDERATION CONSIDERING THAT THE COMPANY’S PREVIOUS
COUNSEL WAS AUTHORIZED TO REPRESENT THE COMPANY IN THE PETITION
FOR CERTIORARI FILED BEFORE THE [CA];

II.

IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS RESPECTFULLY


SUBMITTED THAT THIS HONORABLE COURT COULD TAKE COGNIZANCE OF
THE MERITS OF THIS CASE AND RESOLVE THAT BASED ON THE EVIDENCE ON
RECORD, THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE
STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF
REGISTRATION OF EREU.28

The Court’s Ruling

We dismiss the petition.

Procedural Issue: Lack of Authority

Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of


right.29 Accordingly, the party who seeks to avail of it must strictly observe the rules laid
down by law.30

Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn certification
of non-forum shopping as provided in the third paragraph of Section 3, Rule 46." 31 Sec.
3, paragraphs 4 and 6 of Rule 46 pertinently provides:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. — x


xxx

x xxx

x xxx

44
The petitioner shall also submit together with the petition a sworn certification that he
has not theretofore commenced any action involving the same issues in the
Supreme Court, the Court of Appeals x xx, or any other tribunal or agency; if there is
such other action or proceeding, he must state the status of the same x xx.

x xxx

The failure of the petitioner to comply with any of the foregoing requirements
shall be sufficient ground for the dismissal of the petition. (Emphasis supplied.)

Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the
requisite certification against non-forum shopping. Such certification is a peculiar
personal representation on the part of the principal party, an assurance to the court that
there are no other pending cases involving basically the same parties, issues, and
cause of action.32

In the instant case, the sworn verification and certification of non-forum shopping in the
petition for certiorari of Eagle Ridge filed before the CA carried the signature of its
counsel without the requisite authority.

Eagle Ridge tried to address its faux pas by submitting its board secretary’s
Certificate33 dated May 15, 2007, attesting to the issuance on May 10, 2007 of Board
Resolution No. ERGCCI 07/III-01 that authorized its counsel of record, Atty. Luna C.
Piezas, to represent it before the appellate court.

The CA, however, rejected Eagle Ridge’s virtual plea for the relaxation of the rules on
the signing of the verification and certification against forum shopping, observing that
the board resolution adverted to was approved after Atty. Piezas has signed and filed
for Eagle Ridge the petition for certiorari.

The appellate court’s assailed action is in no way tainted with grave abuse of discretion,
as Eagle Ridge would have this Court believed. Indeed, a certification of non-forum
shopping signed by counsel without the proper authorization is defective and constitutes
a valid cause for dismissal of the petition.34

The submission of the board secretary’s certificate through a motion for reconsideration
of the CA’s decision dismissing the petition for certiorari may be considered a
substantial compliance with the Rules of Court.35 Yet, this rule presupposes that the
authorizing board resolution, the approval of which is certified to by the secretary’s
certification, was passed within the reglementary period for filing the petition. This
particular situation does not, however, obtain under the premises. The records yield the
following material dates and incidents: Eagle Ridge received the May 7, 2007 resolution
of the BLR Director on March 9, 2007, thus giving it 60 days or up to May 8, 2007 to file
a petition for certiorari, as it in fact filed its petition on April 18, 2007 before the CA. The
authorization for its counsel, however, was only issued in a meeting of its board on May

45
10, 2007 or a couple of days beyond the 60-day reglementary period referred to in filing
a certiorari action. Thus, there was no substantial compliance with the Rules.

As with most rules of procedure, however, exceptions are invariably recognized and the
relaxation of procedural rules on review has been effected to obviate jeopardizing
substantial justice.36 This liberality stresses the importance of review in our judicial
grievance structure to accord every party litigant the amplest opportunity for the proper
and just disposition of his cause, freed from the constraints of technicalities. 37 But
concomitant to a liberal interpretation of the rules of procedure should be an effort on
the part of the party invoking liberality to adequately explain his failure to abide by the
rules.381avvphi1

To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true,
as Eagle Ridge urges, that its counsel’s authority to represent the corporation was
never questioned before the DOLE regional office and agency. But EREU’s misstep
could hardly lend Eagle Ridge comfort. And obviously, Eagle Ridge and its counsel
erred in equating the latter’s representation as legal counsel with the authority to sign
the verification and the certificate of non-forum shopping in the former’s behalf. We note
that the authority to represent a client before a court or quasi-judicial agency does not
require an authorizing board resolution, as the counsel-client relationship is presumed
by the counsel’s representation by the filing of a pleading on behalf of the client. In filing
a pleading, the counsel affixes his signature on it, but it is the client who must sign the
verification and the certification against forum shopping, save when a board resolution
authorizes the former to sign so.

It is entirely a different matter for the counsel to sign the verification and the certificate of
non-forum shopping. The attestation or certification in either verification or certification
of non-forum shopping requires the act of the principal party. As earlier indicated, Sec. 3
of Rule 46 exacts this requirement; so does the first paragraph of Sec. 5 of Rule 7
pertinently reading:

SEC. 5. Certification against forum shopping. — The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he
has not theretofore commenced any action or filed any claim involving the same issues
in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such
other action or claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if he should thereafter
learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed. (Emphasis added.)

It is, thus, clear that the counsel is not the proper person to sign the certification against
forum shopping. If, for any reason, the principal party cannot sign the petition, the one
signing on his behalf must have been duly authorized.39

46
In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed
after the filing of the petition was filed, should be treated as a ratificatory medium of the
counsel’s act of signing the sworn certification of non-forum shopping.

We are not inclined to grant the desired liberality owing to Eagle Ridge’s failure to
sufficiently explain its failure to follow the clear rules.

If for the foregoing considerations alone, the Court could very well dismiss the instant
petition. Nevertheless, the Court will explore the merits of the instant case to obviate the
inequity that might result from the outright denial of the petition.

Substantive Issue: No Fraud in the Application

Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for
its petition for cancellation of the EREU’s registration. On the other hand, the Union
asserts bona fide compliance with the registration requirements under Art. 234 of the
Code, explaining the seeming discrepancies between the number of employees who
participated in the organizational meeting and the total number of union members at the
time it filed its registration, as well as the typographical error in its certification which
understated by one the number of union members who ratified the union’s constitution
and by-laws.

Before their amendment by Republic Act No. 948140 on June 15, 2007, the then
governing Art. 234 (on the requirements of registration of a labor union) and Art. 239 (on
the grounds for cancellation of union registration) of the Labor Code respectively
provided as follows:

ART. 234. REQUIREMENTS OF REGISTRATION. –– Any applicant labor


organization, association or group of unions or workers 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:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of
workers who participated in such meetings;

(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;

x xxx

47
(e) Four copies (4) of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification and the list of the members
who participated in it.41

x xxx

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. –– The


following shall constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statements or fraud in connection with the


adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;

x xxx

(c) Misrepresentation, false statements or fraud in connection with the


election of officers, minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly
elected/appointed officers and their postal addresses within thirty (30) days from
election.42 (Emphasis supplied.)

A scrutiny of the records fails to show any misrepresentation, false statement, or fraud
committed by EREU to merit cancellation of its registration.

First. The Union submitted the required documents attesting to the facts of the
organizational meeting on December 6, 2005, the election of its officers, and the
adoption of the Union’s constitution and by-laws. It submitted before the DOLE
Regional Office with its Application for Registration and the duly filled out BLR
Reg. Form No. I-LO, s. 1998, the following documents, to wit:

(a) the minutes of its organizational meeting43 held on December 6, 2005


showing 26 founding members who elected its union officers by secret
ballot;

(b) the list of rank-and-file employees44 of Eagle Ridge who attended the
organizational meeting and the election of officers with their individual
signatures;

(c) the list of rank-and-file employees45 who ratified the union’s constitution
and by-laws showing the very same list as those who attended the
organizational meeting and the election of officers with their individual
signatures except the addition of four employees without their
signatures, i.e., Cherry Labajo, Grace Pollo, AnnalynPoniente and Rowel
Dolendo;

48
(d) the union’s constitution and by-laws46 as approved on December 6,
2005;

(e) the list of officers47 and their addresses;

(f) the list of union members48 showing a total of 30 members; and

(g) the Sworn Statement49 of the union’s elected president and secretary.
All the foregoing documents except the sworn statement of the president
and the secretary were accompanied by Certifications50by the union
secretary duly attested to by the union president.

Second. The members of the EREU totaled 30 employees when it applied on


December 19, 2005 for registration. The Union thereby complied with the
mandatory minimum 20% membership requirement under Art. 234(c). Of note is
the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown
in the Sworn Statement of the Union president and secretary and confirmed by
Eagle Ridge in its petition for cancellation.

Third. The Union has sufficiently explained the discrepancy between the number
of those who attended the organizational meeting showing 26 employees and the
list of union members showing 30. The difference is due to the additional four
members admitted two days after the organizational meeting as attested to by
their duly accomplished Union Membership forms. Consequently, the total
number of union members, as of December 8, 2005, was 30, which was truthfully
indicated in its application for registration on December 19, 2005.

As aptly found by the BLR Director, the Union already had 30 members when it
applied for registration, for the admission of new members is neither prohibited
by law nor was it concealed in its application for registration. Eagle Ridge’s
contention is flawed when it equated the requirements under Art. 234(b) and (c)
of the Labor Code. Par. (b) clearly required the submission of the minutes of the
organizational meetings and the list of workers who participated in the meetings,
while par. (c) merely required the list of names of all the union members
comprising at least 20% of the bargaining unit. The fact that EREU had 30
members when it applied for registration on December 19, 2005 while only 26
actually participated in the organizational meeting is borne by the records.

Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion
of the additional four members allegedly for not complying with what it termed as
"the sine qua non requirements" for union member applications under the
Union’s constitution and by-laws, specifically Sec. 2 of Art. IV. We are not
persuaded. Any seeming infirmity in the application and admission of union
membership, most especially in cases of independent labor unions, must be
viewed in favor of valid membership.

49
The right of employees to self-organization and membership in a union must not
be trammeled by undue difficulties. In this case, when the Union said that the
four employee-applicants had been admitted as union members, it is enough to
establish the fact of admission of the four that they had duly signified such desire
by accomplishing the membership form. The fact, as pointed out by Eagle Ridge,
that the Union, owing to its scant membership, had not yet fully organized its
different committees evidently shows the direct and valid acceptance of the four
employee applicants rather than deter their admission—as erroneously asserted
by Eagle Ridge.

Fifth. The difference between the number of 26 members, who ratified the
Union’s constitution and by-laws, and the 25 members shown in the certification
of the Union secretary as having ratified it, is, as shown by the factual
antecedents, a typographical error. It was an insignificant mistake committed
without malice or prevarication. The list of those who attended the organizational
meeting shows 26 members, as evidenced by the signatures beside their
handwritten names. Thus, the certification’s understatement by one member,
while not factual, was clearly an error, but neither a misleading one nor a
misrepresentation of what had actually happened.

Sixth. In the more meaty issue of the affidavits of retraction executed by six
union members, we hold that the probative value of these affidavits cannot
overcome those of the supporting affidavits of 12 union members and their
counsel as to the proceedings and the conduct of the organizational meeting on
December 6, 2005. The DOLE Regional Director and the BLR OIC Director
obviously erred in giving credence to the affidavits of retraction, but not according
the same treatment to the supporting affidavits.

The six affiants of the affidavits of retraction were not presented in a hearing
before the Hearing Officer (DOLE Regional Director), as required under the
Rules Implementing Book V of the Labor Code covering Labor Relations. Said
Rules is embodied in Department Order No. (DO) 40-03 which was issued on
February 17, 2003 and took effect on March 15, 2003 to replace DO 9 of 1997.
Sec. 11, Rule XI of DO 40-03 specifically requires:

Section 11. Affirmation of testimonial evidence. – Any affidavit submitted by


a party to prove his/her claims or defenses shall be re-affirmed by the
presentation of the affiant before the Med-Arbiter or Hearing Officer, as the
case may be. Any affidavit submitted without the re-affirmation of the
affiantduring a scheduled hearing shall not be admitted in evidence, except
when the party against whom the affidavit is being offered admits all allegations
therein and waives the examination of the affiant.

It is settled that affidavits partake the nature of hearsay evidence, since they are
not generally prepared by the affiant but by another who uses his own language
in writing the affiant’s statement, which may thus be either omitted or

50
misunderstood by the one writing them.51 The above rule affirms the general
requirement in adversarial proceedings for the examination of the affiant by the
party against whom the affidavit is offered. In the instant case, it is required for
affiants to re-affirm the contents of their affidavits during the hearing of the instant
case for them to be examined by the opposing party, i.e., the Union.

For their non-presentation and consonant to the above-quoted rule, the six
affidavits of retraction are inadmissible as evidence against the Union in the
instant case. Moreover, the affidavit and joint-affidavits presented by the Union
before the DOLE Regional Director were duly re-affirmed in the hearing of March
20, 2006 by the affiants. Thus, a reversible error was committed by the DOLE
Regional Director and the BLR OIC Director in giving credence to the
inadmissible affidavits of retraction presented by Eagle Ridge while not giving
credence to the duly re-affirmed affidavits presented by the Union.

Evidently, the allegations in the six affidavits of retraction have no probative value
and at the very least cannot outweigh the rebutting attestations of the duly re-
affirmed affidavits presented by the Union.

Seventh. The fact that six union members, indeed, expressed the desire to
withdraw their membership through their affidavits of retraction will not cause the
cancellation of registration on the ground of violation of Art. 234(c) of the Labor
Code requiring the mandatory minimum 20% membership of rank-and-file
employees in the employees’ union.

The six retracting union members clearly severed and withdrew their union
membership. The query is whether such separation from the Union can
detrimentally affect the registration of the Union.

We answer in the negative.

Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would


require a union membership of at least 22 employees (112 x 205 = 22.4). When
the EREU filed its application for registration on December 19, 2005, there were
clearly 30 union members. Thus, when the certificate of registration was granted,
there is no dispute that the Union complied with the mandatory 20% membership
requirement.

Besides, it cannot be argued that the six affidavits of retraction retroact to the
time of the application of registration or even way back to the organizational
meeting. Prior to their withdrawal, the six employees in question were bona
fide union members. More so, they never disputed affixing their signatures
beside their handwritten names during the organizational meetings. While they
alleged that they did not know what they were signing, it bears stressing that their
affidavits of retraction were not re-affirmed during the hearings of the instant case
rendering them of little, if any, evidentiary value.

51
With the withdrawal of six union members, there is still compliance with the
mandatory membership requirement under Art. 234(c), for the remaining 24
union members constitute more than the 20% membership requirement of 22
employees.

Eagle Ridge further argues that the list of union members includes a supervisory
employee. This is a factual issue which had not been raised at the first instance
before the DOLE Regional Director and cannot be appreciated in this
proceeding. To be sure, Eagle Ridge knows well who among its personnel
belongs or does not belong to the supervisory group. Obviously, its attempt to
raise the issue referred to is no more than an afterthought and ought to be
rejected.

Eighth. Finally, it may not be amiss to note, given the factual antecedents of the
instant case, that Eagle Ridge has apparently resorted to filing the instant case
for cancellation of the Union’s certificate of registration to bar the holding of a
certification election. This can be gleaned from the fact that the grounds it raised
in its opposition to the petition for certification election are basically the same
grounds it resorted to in the instant case for cancellation of EREU’s certificate of
registration. This amounts to a clear circumvention of the law and cannot be
countenanced.

For clarity, we reiterate the following undisputed antecedent facts:

(1) On December 6, 2005, the Union was organized, with 26 employees of


Eagle Ridge attending;

(2) On December 19, 2005, the Union filed its formal application for
registration indicating a total of 30 union members with the inclusion of
four additional members on December 8, 2005 (Reg. Cert. No. RO400-
200512-UR-003 was eventually issued by the DOLE RO IV-A);

(3) On January 10, 2006, the Union filed before the DOLE RO IV-A its
petition for certification election in Eagle Ridge;

(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing
the petition for certification election on essentially the same grounds it
raised in the instant case; and

(5) On February 24, 2006, Eagle Ridge filed the instant case for
cancellation of the Union’s certificate of registration on essentially the
same grounds it raised in its opposition to the Union’s petition for
certification election.

Evidently, as the Union persuasively argues, the withdrawal of six member-employees


from the Union will affect neither the Union’s registration nor its petition for certification

52
election, as their affidavits of retraction were executed after the Union’s petition for
certification election had been filed. The initial five affidavits of retraction were executed
on February 15, 2006; the sixth, on March 15, 2006. Indisputably, all six were executed
way after the filing of the petition for certification election on January 10, 2006.

In Eastland Manufacturing Company, Inc. v. Noriel,52 the Court emphasized, and


reiterated its earlier rulings,53 that "even if there were less than 30% [the required
percentage of minimum membership then] of the employees asking for a certification
election, that of itself would not be a bar to respondent Director ordering such an
election provided, of course, there is no grave abuse of discretion." 54 Citing Philippine
Association of Free Labor Unions v. Bureau of Labor Relations,55 the Court emphasized
that a certification election is the most appropriate procedure for the desired goal of
ascertaining which of the competing organizations should represent the employees for
the purpose of collective bargaining.56

Indeed, where the company seeks the cancellation of a union’s registration during the
pendency of a petition for certification election, the same grounds invoked to cancel
should not be used to bar the certification election. A certification election is the most
expeditious and fairest mode of ascertaining the will of a collective bargaining unit as to
its choice of its exclusive representative.57 It is the fairest and most effective way of
determining which labor organization can truly represent the working force. It is a
fundamental postulate that 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.58

The Court ends this disposition by reproducing the following apt excepts from its holding
in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union (SSVLU) on the effect
of the withdrawal from union membership right before or after the filing of a petition for
certification election:

We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated
written statements submitted by Ventures on March 20, 2001, or seven months after it
filed its petition for cancellation of registration, partake of the nature of withdrawal of
union membership executed after the Union’s filing of a petition for certification election
on March 21, 2000. We have in precedent cases said that 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. Now
then, if a withdrawal from union membership done after a petition for certification
election has been filed does not vitiate such petition, is it not but logical to
assume that such withdrawal cannot work to nullify the registration of the union?
Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its
discretion nor gravely err when it concluded that the affidavits of retraction of the 82
members had no evidentiary weight.59 (Emphasis supplied.)

WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.

53
Costs against petitioner.

SO ORDERED.

PRESBITERO J. VELASCO, JR.


Associate Justice

Republic of the Philippines


SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 169717 March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS


IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER),
ZACARRIAS JERRY VICTORIO-Union President,Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor organization
provided that it complies with the requirements of law for proper registration. The
inclusion of supervisory employees in a labor organization seeking to represent the
bargaining unit of rank-and-file employees does not divest it of its status as a legitimate
labor organization. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeal’s March 15, 2005 Decision1 in CA-G.R. SP No. 58203, which annulled and set
aside the January 13, 2000 Decision2 of the Department of Labor and Employment
(DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005
Resolution3 denying petitioner union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, SamahangManggagawasa Charter Chemical Solidarity of


Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a
petition for certification election among the regular rank-and-file employees of Charter
Chemical and Coating Corporation (respondent company) with the Mediation Arbitration
Unit of the DOLE, National Capital Region.

54
On April 14, 1999, respondent company filed an Answer with Motion to Dismiss 4 on the
ground that petitioner union is not a legitimate labor organization because of (1) failure
to comply with the documentation requirements set by law, and (2) the inclusion of
supervisory employees within petitioner union.5

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the
petition for certification election. The Med-Arbiter ruled that petitioner union is not a
legitimate labor organization because the Charter Certificate, "Sama-samangPahayag
ng Pagsapi at Authorization," and "Listahan ng mgaDumalosaPangkalahatangPulong at
mgaSumang-ayon at NagratipikasaSaligang Batas" were not executed under oath and
certified by the union secretary and attested to by the union president as required by
Section 235 of the Labor Code7 in relation to Section 1, Rule VI of Department Order
(D.O.) No. 9, series of 1997. The union registration was, thus, fatally defective.

The Med-Arbiter further held that the list of membership of petitioner union consisted of
12 batchman, mill operator and leadman who performed supervisory functions. Under
Article 245 of the Labor Code, said supervisory employees are prohibited from joining
petitioner union which seeks to represent the rank-and-file employees of respondent
company.

As a result, not being a legitimate labor organization, petitioner union has no right to file
a petition for certification election for the purpose of collective bargaining.

Department of Labor and Employment’s Ruling

On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company
dismissing petitioner union’s appeal on the ground that the latter’s petition for
certification election was filed out of time. Although the DOLE ruled, contrary to the
findings of the Med-Arbiter, that the charter certificate need not be verified and that
there was no independent evidence presented to establish respondent company’s claim
that some members of petitioner union were holding supervisory positions, the DOLE
sustained the dismissal of the petition for certification after it took judicial notice that
another union, i.e., Pinag-isangLakasManggagawasa Charter Chemical and Coating
Corporation, previously filed a petition for certification election on January 16, 1998. The
Decision granting the said petition became final and executory on September 16, 1998
and was remanded for immediate implementation. Under Section 7, Rule XI of D.O. No.
9, series of 1997, a motion for intervention involving a certification election in an
unorganized establishment should be filed prior to the finality of the decision calling for a
certification election. Considering that petitioner union filed its petition only on February
14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its
January 13, 2000 Decision, the DOLE found that a review of the records indicates that
no certification election was previously conducted in respondent company. On the

55
contrary, the prior certification election filed by Pinag-isangLakasManggagawasa
Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter
and, on appeal, was dismissed by the DOLE for being filed out of time. Hence, there
was no obstacle to the grant of petitioner union’s petition for certification election, viz:

WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of
this Office dated 16 July 1999 is MODIFIED to allow the certification election among the
regular rank-and-file employees of Charter Chemical and Coating Corporation with the
following choices:

1. SamahangManggagawasa Charter Chemical-Solidarity of Unions in the


Philippines for Empowerment and Reform (SMCC-SUPER); and

2. No Union.

Let the records of this case be remanded to the Regional Office of origin for the
immediate conduct of a certification election, subject to the usual pre-election
conference.

SO DECIDED.9

Court of Appeal’s Ruling

On March 15, 2005, the CA promulgated the assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution
dated January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET
ASIDE.

SO ORDERED.10

In nullifying the decision of the DOLE, the appellate court gave credence to the findings
of the Med-Arbiter that petitioner union failed to comply with the documentation
requirements under the Labor Code. It, likewise, upheld the Med-Arbiter’s finding that
petitioner union consisted of both rank-and-file and supervisory employees. Moreover,
the CA held that the issues as to the legitimacy of petitioner union may be attacked
collaterally in a petition for certification election and the infirmity in the membership of
petitioner union cannot be remedied through the exclusion-inclusion proceedings in a
pre-election conference pursuant to the ruling in Toyota Motor Philippines v. Toyota
Motor Philippines Corporation Labor Union.11 Thus, considering that petitioner union is
not a legitimate labor organization, it has no legal right to file a petition for certification
election.

Issues

56
Whether x xx the Honorable Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in granting the respondent [company’s] petition
for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of
the respondent company[’s] petition was already settled with finality and barred from
being re-litigated.

II

Whether x xx the Honorable Court of Appeals committed grave abuse of discretion


tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and
supervisory employee[s] of petitioner [union’s] membership is [a] ground for the
cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for
certification election.

III

Whether x xx the Honorable Court of Appeals committed grave abuse of discretion


tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath
the local charter certificate issued by its mother federation and list of the union
membership attending the organizational meeting [is a ground] for the cancellation of
petitioner [union’s] legal personality as a labor organization and for the dismissal of the
petition for certification election.12

Petitioner Union’s Arguments

Petitioner union claims that the litigation of the issue as to its legal personality to file the
subject petition for certification election is barred by the July 16, 1999 Decision of the
DOLE. In this decision, the DOLE ruled that petitioner union complied with all the
documentation requirements and that there was no independent evidence presented to
prove an illegal mixture of supervisory and rank-and-file employees in petitioner union.
After the promulgation of this Decision, respondent company did not move for
reconsideration, thus, this issue must be deemed settled.

Petitioner union further argues that the lack of verification of its charter certificate and
the alleged illegal composition of its membership are not grounds for the dismissal of a
petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997,
as amended, nor are they grounds for the cancellation of a union’s registration under
Section 3, Rule VIII of said issuance. It contends that what is required to be certified
under oath by the local union’s secretary or treasurer and attested to by the local
union’s president are limited to the union’s constitution and by-laws, statement of the set
of officers, and the books of accounts.

Finally, the legal personality of petitioner union cannot be collaterally attacked but may
be questioned only in an independent petition for cancellation pursuant to Section 5,
Rule V, Book IV of the Rules to Implement the Labor Code and the doctrine enunciated

57
in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.13

Respondent Company’s Arguments

Respondent company asserts that it cannot be precluded from challenging the July 16,
1999 Decision of the DOLE. The said decision did not attain finality because the DOLE
subsequently reversed its earlier ruling and, from this decision, respondent company
timely filed its motion for reconsideration.

On the issue of lack of verification of the charter certificate, respondent company notes
that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of
Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter
certificate be certified under oath.

It also contends that petitioner union is not a legitimate labor organization because its
composition is a mixture of supervisory and rank-and-file employees in violation of
Article 245 of the Labor Code. Respondent company maintains that the ruling in Toyota
Motor Philippines vs. Toyota Motor Philippines Labor Union14 continues to be good case
law. Thus, the illegal composition of petitioner union nullifies its legal personality to file
the subject petition for certification election and its legal personality may be collaterally
attacked in the proceedings for a petition for certification election as was done here.

Our Ruling

The petition is meritorious.

The issue as to the legal personality of petitioner union is not barred by the July 16,
1999 Decision of the DOLE.

A review of the records indicates that the issue as to petitioner union’s legal personality
has been timely and consistently raised by respondent company before the Med-Arbiter,
DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that
petitioner union complied with the documentation requirements of the Labor Code and
that the evidence was insufficient to establish that there was an illegal mixture of
supervisory and rank-and-file employees in its membership. Nonetheless, the petition
for certification election was dismissed on the ground that another union had previously
filed a petition for certification election seeking to represent the same bargaining unit in
respondent company.

Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE
reversed its previous ruling. It upheld the right of petitioner union to file the subject
petition for certification election because its previous decision was based on a mistaken
appreciation of facts.15 From this adverse decision, respondent company timely moved
for reconsideration by reiterating its previous arguments before the Med-Arbiter that

58
petitioner union has no legal personality to file the subject petition for certification
election.

The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the
parties timely moved for reconsideration. The issue then as to the legal personality of
petitioner union to file the certification election was properly raised before the DOLE, the
appellate court and now this Court.

The charter certificate need not be certified under oath by the local union’s secretary or
treasurer and attested to by its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 9481 16 which
took effect on June 14, 2007.17 This law introduced substantial amendments to the
Labor Code. However, since the operative facts in this case occurred in 1999, we shall
decide the issues under the pertinent legal provisions then in force (i.e., R.A. No.
6715,18 amending Book V of the Labor Code, and the rules and
regulations19 implementing R.A. No. 6715, as amended by D.O. No. 9,20

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg.,


Philippines, Inc.21

In the main, the CA ruled that petitioner union failed to comply with the requisite
documents for registration under Article 235 of the Labor Code and its implementing
rules. It agreed with the Med-Arbiter that the Charter Certificate, Sama-samangPahayag
ng Pagsapi at Authorization, and Listahan ng mgaDumalosaPangkalahatangPulong at
mgaSumang-ayon at NagratipikasaSaligang Batas were not executed under oath. Thus,
petitioner union cannot be accorded the status of a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as


amended by D.O. No. 9, series of 1997, provides:

Section 1. Chartering and creation of a local chapter — A duly registered federation or


national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or national union indicating the
creation or establishment of the local/chapter;

(b) The names of the local/chapter’s officers, their addresses, and the principal
office of the local/chapter; and

(c) The local/chapter’s constitution and by-laws provided that where the
local/chapter’s constitution and by-laws [are] the same as [those] of the
federation or national union, this fact shall be indicated accordingly.

59
All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President.

As readily seen, the Sama-samangPahayag ng Pagsapi at Authorization and Listahan


ng mgaDumalosaPangkalahatangPulong at mgaSumang-ayon at
NagratipikasaSaligang Batas are not among the documents that need to be submitted
to the Regional Office or Bureau of Labor Relations in order to register a labor
organization. As to the charter certificate, the above-quoted rule indicates that it should
be executed under oath. Petitioner union concedes and the records confirm that its
charter certificate was not executed under oath. However, in San Miguel Corporation
(Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San
Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-
FFW),22 which was decided under the auspices of D.O. No. 9, Series of 1997, we ruled

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996),
the Court ruled that it was not necessary for the charter certificate to be certified and
attested by the local/chapter officers. Id. While this ruling was based on the
interpretation of the previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the same doctrine obtains in
this case. Considering that the charter certificate is prepared and issued by the national
union and not the local/chapter, it does not make sense to have the local/chapter’s
officers x xx certify or attest to a document which they had no hand in the
preparation of.23 (Emphasis supplied)

In accordance with this ruling, petitioner union’s charter certificate need not be executed
under oath. Consequently, it validly acquired the status of a legitimate labor
organization upon submission of (1) its charter certificate,24 (2) the names of its officers,
their addresses, and its principal office,25 and (3) its constitution and by-laws26— the last
two requirements having been executed under oath by the proper union officials as
borne out by the records.

The mixture of rank-and-file and supervisory employees in petitioner union does not
nullify its legal personality as a legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and
supervisory employees. However, petitioner union sought to represent the bargaining
unit consisting of rank-and-file employees. Under Article 24527 of the Labor Code,
supervisory employees are not eligible for membership in a labor organization of rank-
and-file employees. Thus, the appellate court ruled that petitioner union cannot be
considered a legitimate labor organization pursuant to Toyota Motor Philippines v.
Toyota Motor Philippines Corporation Labor Union28 (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the Med-
Arbiter, as upheld by the appellate court, that 12 of its members, consisting of
batchman, mill operator and leadman, are supervisory employees. However, petitioner

60
union failed to present any rebuttal evidence in the proceedings below after respondent
company submitted in evidence the job descriptions29 of the aforesaid employees. The
job descriptions indicate that the aforesaid employees exercise recommendatory
managerial actions which are not merely routinary but require the use of independent
judgment, hence, falling within the definition of supervisory employees under Article
212(m)30 of the Labor Code. For this reason, we are constrained to agree with the Med-
Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-
and-file and supervisory employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union


does not divest it of its status as a legitimate labor organization. The appellate court’s
reliance on Toyota is misplaced in view of this Court’s subsequent ruling in Republic v.
Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima). In Kawashima, we
explained at length how and why the Toyota doctrine no longer holds sway under the
altered state of the law and rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition
[on the co-mingling of supervisory and rank-and-file employees] would bring
about on the legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended
Omnibus Rules) which supplied the deficiency by introducing the following amendment
to Rule II (Registration of Unions):

"Sec. 1. Who may join unions. - x xx 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;
Provided, that those supervisory employees who are included in an existing rank-and-
file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that
unit x xx. (Emphasis supplied) and Rule V (Representation Cases and Internal-Union
Conflicts) of the Omnibus Rules, viz:

"Sec. 1. Where to file. - A petition for certification election may be filed with the Regional
Office which has jurisdiction over the principal office of the employer. The petition shall
be in writing and under oath.

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:

x xxx

(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate

61
bargaining unit of the rank-and-file employees shall not include supervisory
employees and/or security guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise legitimate and duly
registered labor organization from exercising its right to file a petition for certification
election.

Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the
Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:

"Clearly, based on this provision, a 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.

x xxx

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." (Emphasis supplied)

In Dunlop, in which the labor organization that filed a petition for certification election
was one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long
as it counted rank-and-file employees among its members.

It should be emphasized that the petitions for certification election involved


in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended
by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules).
Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules –
that the petition for certification election indicate that the bargaining unit of rank-and-file
employees has not been mingled with supervisory employees – was removed. Instead,
what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining
unit, thus:

62
Rule XI
Certification Elections

x xxx

Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath
and shall contain, among others, the following: x xx (c) The description of the bargaining
unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of
the 1997 Amended Omnibus Rules, although the specific provision involved therein was
only Sec. 1, Rule VI, to wit:

"Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or


national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following: a) a charter certificate issued by the
federation or national union indicating the creation or establishment of the local/chapter;
(b) the names of the local/chapter's officers, their addresses, and the principal office of
the local/chapter; and (c) the local/ chapter's constitution and by-laws; provided that
where the local/chapter's constitution and by-laws is the same as that of the federation
or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President."

which does not require that, for its creation and registration, a local or chapter submit a
list of its members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees
Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a
labor organization and its right to file a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view in Toyota and Dunlopand
reverted to its pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof. Thus, the Court held that after a
labor organization has been registered, it may exercise all the rights and privileges of a
legitimate labor organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not among the
grounds for cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code.

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing


Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-
and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules
does not require a local or chapter to provide a list of its members, it would be improper

63
for the DOLE to deny recognition to said local or chapter on account of any question
pertaining to its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in 1999
against a rank-and-file labor organization on the ground of mixed membership: the
Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of
disqualified employees is not among the grounds for cancellation, unless such inclusion
is due to misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules,
as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.32 [Underline supplied]

The applicable law and rules in the instant case are the same as those
in Kawashima because the present petition for certification election was filed in 1999
when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashimaapplies with
equal force here. As a result, petitioner union was not divested of its status as a
legitimate labor organization even if some of its members were supervisory employees;
it had the right to file the subject petition for certification election.

The legal personality of petitioner union cannot be collaterally attacked by respondent


company in the certification election proceedings.

Petitioner union correctly argues that its legal personality cannot be collaterally attacked
in the certification election proceedings. As we explained in Kawashima:

Except when it is requested to bargain collectively, an employer is a mere bystander to


any petition for certification election; such proceeding is non-adversarial and merely
investigative, for the purpose thereof is to determine which organization will represent
the employees in their collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer cannot have
any partisan interest therein; it cannot interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; not even a mere allegation that some
employees participating in a petition for certification election are actually managerial
employees will lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed thereof.

The amendments to the Labor Code and its implementing rules have buttressed that
policy even more.33

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September
16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203

64
are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of
Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.

No pronouncement as to costs.

SO ORDERED.

MARIANO C. DEL CASTILLO


Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

TERESITA J. LEONARDO-DE
PRESBITERO J. VELASCO, JR.
CASTRO
Associate Justice
Associate Justice

JOSE PORTUGAL PEREZ


Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's
attestation, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

RENATO C. CORONA
Chief Justice

65
SECOND DIVISION

G.R. No. 163532 : March 10, 2010

YOKOHAMA TIRE PHILIPPINES, INC., Petitioner, v. YOKOHAMA EMPLOYEES


UNION,Respondent.

RESOLUTION

CARPIO, J.:

This is a petition1cЃa for review on certiorari under Rule 45 of the Rules of Court. The
petition challenges the 16 January 2004 Decision2cЃa and 12 May 2004
Resolution3cЃa of the Court of Appeals in CA-G.R. SP No. 65460. The Court of Appeals
affirmed the 12 March4cЃa and 3 May5cЃa 2001 Resolutions of the Bureau of Labor
Relations (BLR) in BLR-A-C-7-2-05-01, reversing the 18 December 2000
Decision6cЃa of the Department of Labor and Employment (DOLE) Regional Office No.
3, San Fernando, Pampanga (Regional Office), in Case No. RO300-0001-CP-
002.chanroblesvirtua|awlibary

Yokohama Employees Union (YEU) is the labor organization of the rank-and-file


employees of Yokohama Tire Philippines, Inc. (YTPI). YEU was registered as a
legitimate labor labor union on 10 September 1999.chanroblesvirtua|awlibary

YEU filed before the Regional Office a petition for certification election. YTPI filed before
the Regional Office a petition7cЃa dated 24 January 2000 for the revocation of YEUs
registration. YTPI alleged that YEU violated Article 239(a)8cЃa of the Labor Code: (1)
YEU fraudulently included the signature of a certain Ronald O. Pineda (Pineda) in the
organizational documents; (2) Pineda was not aware of any election of union officers;
(3) YEU fraudulently obtained the employees signatures by making them believe that
they were signing a petition for a 125% increase in the minimum wage, not a petition for
registration; (4) the employees did not belong to a single bargaining unit; and (5) YEU
fraudulently stated in its organizational meeting minutes that its second vice president
was Bernard David, not Bernardo David.chanroblesvirtua|awlibary

In its 18 December 2000 Decision, the Regional Office granted the 24 January 2000
petition. The Regional Office held that YEU committed misrepresentation: (1) YEU failed
to remove Pinedas signature from the organizational documents despite instructions to
do so; and (2) YEU declared that it conducted an election of union officers when, in
truth, it did not.chanroblesvirtua|awlibary

66
YEU appealed the 18 December 2000 Decision to the BLR. In its 12 March 2001
Resolution, the BLR reversed the 18 December 2000 Decision. The BLR found that (1)
Pineda did not approach any officer of YEU to have his signature removed from the
organizational documents; (2) Pinedas affidavit that no election of officers took place
was unreliable and inconsistent with his earlier written statement; (3) the affidavit of a
certain Rachelle Gonzales (Gonzales) that no election of officers took place was
unreliable and inconsistent with her earlier resignation letter; (4) the affidavit of a certain
Arthur Calma (Calma) did not state that no election of officers took place; (5) at least 82
other members of YEU did not question the legality of YEUs organization; and (6) 50
YEU members executed a Sama-Samang Pahayag9cЃa stating that:

cralaw3. Noong ika-25 ng Hulyo 1999, kami ay dumalosaisangpulong para sapag-


oorganisa ng amingUnyon at pagraratipika ng Saligang Batas at Alituntuninnito. x xx

x xxx

5. Walangkatotohananangalegasyon
ng Yokohama nawalangnaganapnapagpupulongkaugnay ng pag-oorganisa o
pagtatayonamin ng Unyon. Nakakatuwa ring isipinangalegasyon ng
kompanyanahindinaminlubosnanaiintindihanangamingkapasyahangmagtayo at
sumapisaamingUnyon.chanroblesvirtua|awlibary

6. Malinawnaginagawa ng kompanyaanglahat ng
paraanupanghadlanganangamingkarapatansapag-oorganisa at
kilalaninbilangkinatawan ng lahat ng mga regular namanggagawa para sasama-
samangpakikipagtawaran.chanroblesvirtua|awlibary

7. Sa kabila ng lahat ng ito, kami ay lubos pa ring naninindigansaamingUnyon at


patuloynaipaglalabanangamingkarapatansapag-oorganisa at sasama-samang
pakikipagtawaran;10cЃa

cralawThe BLR also held that (1) YTPI was estopped from questioning the fact that
the Sama-SamangPahayag was an unsworn document since it filed the 24 January
2000 petition for the revocation of YEUs registration based on unsworn documents; (2)
the fact that there was no express mention of an election of union officers in the Sama-
SamangPahayag did not necessarily mean that no election occurred; (3) there was an
organizational meeting and an organizational meeting may include an election of union
officers; (4) any infirmity in the election of union officers may be remedied under the last
paragraph11cЃa of Article 241 of the Labor Code and under Rule XIV of DOLE
Department Order No. 9; and (5) cancellation of union registration must be done with
great caution.chanroblesvirtua|awlibary

YTPI filed before the BLR a motion12cЃa for reconsideration. In its 3 May 2001
Resolution, the BLR denied the motion for lack of merit.chanroblesvirtua|awlibary

67
YTPI filed before the Court of Appeals a petition13cЃa for certiorari under Rule 65 of the
Rules of Court. In its 16 January 2004 Decision, the Court of Appeals denied the
petition and held that the BLR did not commit grave abuse of discretion: (1) Pinedas
affidavit that no election of officers took place was unreliable and inconsistent with his
earlier written statement; (2) Gonzales affidavit that no election of officers took place
was unreliable and inconsistent with her earlier resignation letter; (3) Calmas affidavit
was unreliable because he admitted that he stayed at the organizational meeting for
only 20 minutes; (4) the affidavit of a certain Bernardino David (David) that no election
of officers took place was unreliable and inconsistent with his
earlier sinumpaangsalaysay; (5) Davids affidavit was only filed before the BLR when
YTPI filed its motion for reconsideration of the BLRs 12 March 2001 Resolution; (6)
Pineda did not approach any officer of YEU to have his signature removed from the
organizational documents; (7) the Sama-SamangPahayag was entitled to credit even if
it was an unsworn document; (8) the allegation that the signatures of a certain Denry
Villanueva (Villanueva) and a certain ApolinarBognot (Bognot) in the Sama-
SamangPahayag were forged was only raised for the first time before the BLR when
YTPI filed its motion for reconsideration of the BLRs 12 March 2001 Resolution; (9)
Villanueva and Bognot were not signatories to YEUs organizational documents; (10)
cancellation of union registration must be done with great caution; (11) YTPI, in filing the
petition for revocation of YEUs registration, had the burden of proving that YEU
committed fraud and misrepresentation; and (12) YTPI failed to prove that YEU
committed fraud and misrepresentation.chanroblesvirtua|awlibary

YTPI filed before the Court of Appeals a motion14cЃa for reconsideration. In its 12 May
2004 Resolution, the Court of Appeals denied the motion for lack of
merit.chanroblesvirtua|awlibary

Hence, the present petition. YTPI raises as issues that (1) the Court of Appeals erred in
finding that YEU did not commit fraud or misrepresentation, and (2) the Court of
Appeals erred in holding that YTPI had the burden of proving that YEU committed fraud
and misrepresentation.chanroblesvirtua|awlibary

The petition is unmeritorious.chanroblesvirtua|awlibary

The Court of Appeals found that YEU did not commit fraud or misrepresentation:

Anent whether an election of officers was conducted or not, the petitioner relied largely
on the affidavit of Pineda to substantiate its claim that no election of officers was held by
the union. However, respondent BLR Director accorded greater credence to Pinedas
handwritten statement, wherein he made references to at least 2 meetings he had
attended during which he had signed the organizational documents, than to Pinedas
later affidavit, whereby he denied any knowledge of the holding of an election. A perusal
of the affirmative handwritten statement easily explains why the public respondent
preferred it to the negating affidavit, to wit:

68
cralawNoongunangarawnapumirmaakogalingakosa
graveyard. Pagkataposyungpangalawang meeting graveyard din
ako, pinapirmaakodoonsasiyam (9) napirasongpapelnoongumagangpag-uwinamin. x xx

July 25, 99 - UnangPirmahan

July 26, 99 - Pinirmahankoangsiyamnapiraso

July 27, 99 - Pinatatanggalkoangakingpangalansalistahan

cralawThe petitioner also relied on the affidavit of Ma. Rachelle Gonzales attesting that
there was no election of officers, but respondent BLR Director dismissed the affidavit as
nothing but the petitioners belated attempt to establish its claim about the election being
held considering that Gonzales did not even intimate such matter in her handwritten
resignation letter to YEU.chanroblesvirtua|awlibary

Another affidavit, that of Arthur Calma, stated that no election was held, but, again,
respondent BLR Director gave Calmas affidavit scant consideration because the affiant
admittedly remained in the YEU office for only 20 minutes. In contrast, the public
respondent accorded more weight to the sama-samangpahayag executed by 50 YEU
members who averred about the holding of an organizational meeting. The public
respondent justifiably favored the latter, deeming the meeting to include the holding of
an election of officers, for, after all, Art. 234, (b), Labor Code, does not itself distinguish
between the two.chanroblesvirtua|awlibary

Respondent BLR Director is further assailed for not taking into consideration
the affidavitasserting that no election of officers was ever conducted, which Bernardino
David, YEUs second vice president, executed. The omission is not serious enough,
however, because the affidavit was submitted only when the petitioner moved for the
reconsideration of the questioned decision, and because the affidavit was even
inconsistent with Davids earlier sinumpaangsalaysay, whereby he attested to his
attendance at the organizational meeting and to his election thereat as vice
president.chanroblesvirtua|awlibary

As to the inclusion of Pinedas signature in the organizational documents, the BLR


Director correctly ruled that evidence to prove the participation of YEU in the failure to
delete Pinedas signature from the organizational documents was wanting. It is not
deniable that Pineda never approached any officer of YEU; and that Pineda approached
a certain Tonton whom he knew to be a union organizer but who was not an officer of
the union nor an employee of the company.chanroblesvirtua|awlibary

If the petitioner was [sic] sincere and intent on this imputed error, its effort to show so
does not [sic] appear in the record. What appears is its abject failure to
establish Tontons actual identity. The petitioner seemed content in making the
insinuation in the petition for certiorari that Tontonwas widely recognized as the
organizer behind the creation of YEU. That was not enough.chanroblesvirtua|awlibary

69
In sum, the BLR Director was neither capricious nor whimsical in his exercise of
judgment, and, therefore, did not commit grave abuse of discretion. For certiorari to lie,
more than mere abuse of discretion is required to be established by the petitioner.
Herein, no degree of abuse of discretion was attendant.15cЃa

YTPI claims that the Court of Appeals erred in finding that YEU did not commit fraud or
misrepresentation. YTPI stated that:

There was evidence that respondent committed fraud and misrepresentation in its
failure to omit the name of Ronald Pineda prior to the filing of the respondents
organizational documents with the Department of Labor and Employment. On the other
hand, the Regional Director held that there was no election of officers that had
taken place during respondents alleged organizational meeting as there was no
proof of such election.16cЃa (Emphasis in the original)

The Court is not convinced. A petition for review on certiorari under Rule 45 of the Rules
of Court should include only questions of law questions of fact are not reviewable. A
question of law exists when the doubt centers on what the law is on a certain set of
facts, while a question of fact exists when the doubt centers on the truth or falsity of the
alleged facts. There is a question of law if the issue raised is capable of being resolved
without need of reviewing the probative value of the evidence. Once the issue invites a
review of the evidence, the question is one of fact.17cЃa

Whether YEU committed fraud and misrepresentation in failing to remove Pinedas


signature from the list of employees who supported YEUs application for registration
and whether YEU conducted an election of its officers are questions of fact. They are
not reviewable.chanroblesvirtua|awlibary

Factual findings of the Court of Appeals are binding on the Court. Absent grave abuse
of discretion, the Court will not disturb the Court of Appeals factual
findings.18cЃa In Encarnacion v. Court of Appeals,19cЃa the Court held that, "unless
there is a clearly grave or whimsical abuse on its part, findings of fact of the appellate
court will not be disturbed. The Supreme Court will only exercise its power of review in
known exceptions such as gross misappreciation of evidence or a total void of
evidence." YTPI failed to show that the Court of Appeals gravely abused its
discretion.chanroblesvirtua|awlibary

The Court of Appeals held that YTPI had the burden of proving that YEU committed
fraud and misrepresentation:

The cancellation of union registration at the employers instance, while permitted, must
be approached with caution and strict scrutiny in order that the right to belong to a
legitimate labor organization and to enjoy the privileges appurtenant to such
membership will not be denied to the employees. As the applicant for cancellation, the
petitioner naturally had the burden to present proof sufficient to warrant the cancellation.
The petitioner was thus expected to satisfactorily establish that YEU committed

70
misrepresentations, false statements or fraud in connection with the election of its
officers, or with the minutes of the election of officers, or in the list of votes, as expressly
required in Art. 239, (c), Labor Code. But, as the respondent BLR Director has found
and determined, and We fully agree with him, the petitioner simply failed to discharge its
burden.20cЃa

YTPI claims that the Court of Appeals erred in holding that YTPI had the burden of
proving that YEU committed fraud and misrepresentation. YTPI stated that:

5.5 In the Decision dated 16 January 2004, the Honorable Court of Appeals upheld the
BLR Directors ruling that the petitioner had the burden of proving that subject election of
officers never took place.chanroblesvirtua|awlibary

5.6 However, the petitioner does not have the burden of proof vis-à-vis whether or not
the said elections took place. The respondent has the burden of proof in showing
that an election of officers took place.21cЃa (Emphasis in the original)

The Court is not convinced. YTPI, being the one which filed the petition for the
revocation of YEUs registration, had the burden of proving that YEU committed fraud
and misrepresentation. YTPI had the burden of proving the truthfulness of its
accusations that YEU fraudulently failed to remove Pinedas signature from the
organizational documents and that YEU fraudulently misrepresented that it conducted
an election of officers.chanroblesvirtua|awlibary

In Heritage Hotel Manila v. Pinag-IsangGaling at Lakas ng mgaManggagawasa


Heritage Manila,22cЃa the employer filed a petition to revoke the registration of its rank-
and-file employees union, accusing it of committing fraud and misrepresentation. The
Court held that the petition was rightfully denied because the employer failed to prove
that the labor union committed fraud and misrepresentation. The Court held that:

Did respondent PIGLAS union commit fraud and misrepresentation in its application for
union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for
the evident discrepancies as to the number of union members involved as these
appeared on the documents that supported the unions application for
registration, petitioner company has no other evidence of the alleged
misrepresentation. But those discrepancies alone cannot be taken as an indication
that respondent misrepresented the information contained in these
documents.chanroblesvirtua|awlibary

The charge that a labor organization committed fraud and misrepresentation in


securing its registration is a serious charge and deserves close scrutiny. It is
serious because once such charge is proved, the labor union acquires none of the
rights accorded to registered organizations. Consequently, charges of this nature
should be clearly established by evidence and the surrounding
circumstances.23cЃa (Emphasis supplied)

71
WHEREFORE, we DENY the petition. We AFFIRM the 16 January 2004 Decision and
12 May 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 65460.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

72
THIRD DIVISION

G.R. No. 196276, June 04, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner, v. BUREAU OF LABOR


RELATIONS AND SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT), Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari filed by petitioner TAKATA


Philippines Corporation assailing the Decision1 dated December 22, 2010 and
the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-G.R. SP
No. 112406.

On July 7, 2009, petitioner filed with the Department of Labor and Employment
(DOLE) Regional Office a Petition3 for Cancellation of the Certificate of Union
Registration of Respondent SamahangLakasManggagawa ng Takata
(SALAMAT) on the ground that the latter is guilty of misrepresentation, false
statement and fraud with respect to the number of those who participated in the
organizational meeting, the adoption and ratification of its Constitution and By-
Laws, and in the election of its officers. It contended that in the May 1, 2009
organizational meeting of respondent, only 68 attendees signed the attendance
sheet, and which number comprised only 17% of the total number of the 396
regular rank- and-file employees which respondent sought to represent, and
hence, respondent failed to comply with the 20% minimum membership
requirement. Petitioner insisted that the document “Pangalan ng mgaKasapi ng
Unyon” bore no signatures of the alleged 119 union members; and that
employees were not given sufficient information on the documents they signed;
that the document “Sama-SamangPahayag ng Pagsapi” was not submitted at
the time of the filing of respondent's application for union registration; that the
119 union members were actually only 117; and, that the total number of
petitioner's employees as of May 1, 2009 was 470, and not 396 as respondent
claimed.4cralawred

Respondent denied the charge and claimed that the 119 union members were
more than the 20% requirement for union registration. The document “Sama-
SamangPahayag ng PagsapisaUnyon” which it presented in its petition for
certification election5 supported their claim of 119 members. Respondent also

73
contended that petitioner was estopped from assailing its legal personality as it
agreed to a certification election and actively participated in the pre-election
conference of the certification election proceedings.6Respondent argued that
the union members were informed of the contents of the documents they signed
and that the 68 attendees to the organizational meeting constituted more than
50% of the total union membership, hence, a quorum existed for the conduct of
the said meeting.7cralawred

On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr.,
issued a Decision8 granting the petition for cancellation of respondent's
certificate of registration, the dispositive portion of which
reads:ChanRoblesVirtualawlibrary

WHEREFORE, from the foregoing considerations, the petition is hereby


GRANTED. Accordingly, the respondent Union Certificate of Registration No.
RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby REVOCKED (sic)
and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule XIV of
Department Order No. 40-03 and the SamahangLakas ng Manggagawa ng
TAKATA (SALAMAT) is hereby delisted from the roll of legitimate labor
organization of this office.9

In revoking respondent's certificate of registration, the Regional Director found


that the 68 employees who attended the organizational meeting was obviously
less than 20% of the total number of 396 regular rank-and-file employees which
respondent sought to represent, hence, short of the union registration
requirement; that the attendance sheet which contained the signatures and
names of the union members totalling to 68 contradicted the list of names stated
in the document denominated as “Pangalan ng mgaKasapi ng Unyon.” The
document “Sama-SamangPahayag ng Pagsapi” was not attached to the
application for registration as it was only submitted in the petition for certification
election filed by respondent at a later date. The Regional Director also found
that the proceedings in the cancellation of registration and certification elections
are two different and entirely separate and independent proceedings which
were not dependent on each other.

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP)


Paralegal Officer, Domingo P. Mole, filed a Notice and Memorandum of
Appeal10 with the Bureau of Labor Relations (BLR). However, on September 28,
2009, respondent, through its counsels, Attys. Napoleon C. Banzuela, Jr. and
Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of
Appearance11 to the Office of the DOLE Secretary, which the latter eventually
referred to the BLR. Petitioner filed an Opposition to the Appeals12praying for
their dismissal on the ground of forum shopping as respondent filed two
separate appeals in two separate venues; and for failing to avail of the correct
remedy within the period; and that the certificate of registration was tainted with
fraud, misrepresentation and falsification.

74
In its Answer,13 respondent claimed that there was no forum shopping as BMP's
Paralegal Officer was no longer authorized to file an appeal on behalf of
respondent as the latter's link with BMP was already terminated and only the
Union President was authorized to file the appeal; and that it complied with
Department Order No. 40-03.

On December 9, 2009, after considering respondent's Appeal Memorandum


with Formal Entry of Appearance and petitioner's Answer, the BLR rendered its
Decision14 reversing the Order of the Regional Director, the decretal portion of
which reads:ChanRoblesVirtualawlibrary

WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional


Director Ricardo S. Martinez, Sr., dated 27 August 2009, is
hereby REVERSED and SET ASIDE.

Accordingly, SamahangLakasManggagawa ng TAKATA (SALAMAT) shall


remain in the roster of labor organizations.15

In reversing, the BLR found that petitioner failed to prove that respondent
deliberately and maliciously misrepresented the number of rank-and-file
employees. It pointed out petitioner's basis for the alleged non-compliance with
the minimum membership requirement for registration was the attendance of 68
members to the May 1, 2009 organizational meeting supposedly comprising
only 17% of the total 396 regular rank-and-file employees. However, the BLR
found that the list of employees who participated in the organizational meeting
was a separate and distinct requirement from the list of the names of members
comprising at least 20% of the employees in the bargaining unit; and that there
was no requirement for signatures opposite the names of the union members;
and there was no evidence showing that the employees assailed their inclusion
in the list of union members.

Petitioner filed a motion for reconsideration, which was denied by the BLR in a
Resolution16 dated January 8, 2010.

Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.

After the submission of the parties' respective pleadings, the case was
submitted for decision.

On December 22, 2010, the CA rendered its assailed decision which denied the
petition and affirmed the decision of the BLR. Petitioner's motion for
reconsideration was denied in a Resolution dated March 29, 2011.

Hence this petition for review filed by petitioner raising the following issues, to

75
wit:ChanRoblesVirtualawlibrary

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND


SERIOUS ERROR IN AFFIRMING THE DECISION OF PUBLIC
RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG
LAKAS MANGGAGAWA SA TAKATA (SALAMAT ) OF THE RULE ON FORUM
SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS
BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED
OUTRIGHT BY PUBLIC RESPONDENT BLR, ON GROUND OF FORUM
SHOPPING.

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING


THAT THE APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE LAW.
CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION
OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED WITH FRAUD,
MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT
POSSESS THE REQUIRED NUMBER OF MEMBERS AT THE TIME OF
FILING OF ITS APPLICATION FOR REGISTRATION, HENCE, IT SHOULD BE
HELD GUILTY OF MISREPRESENTATION , AND FALSE STATEMENTS AND
FRAUD IN CONNECTION THEREWITH.17

Anent the first issue, petitioner contends that respondent had filed two separate
appeals with two different representations at two different venues, in violation of
the rule on multiplicity of suits and forum shopping, and instead of dismissing
both appeals, the appeal erroneously filed before the Labor Secretary was the
one held validly filed, entertained and even granted; that it is not within the
discretion of BLR to choose which between the two appeals should be
entertained, as it is the fact of the filing of the two appeals that is being
prohibited and not who among the representatives therein possessed the
authority.

We are not persuaded.

We find no error committed by the CA in finding that respondent committed no


forum shopping. As the CA correctly concluded, to
wit:ChanRoblesVirtualawlibrary

It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer


authorized to file an appeal on behalf of union SALAMAT and that BMP was
duly informed that its services was already terminated. SALAMAT even
submitted before the BLR its “ResolusyonBlg. 01-2009” terminating the services
of BMP and revoking the representation of Mr. Domingo Mole in any of the
pending cases being handled by him on behalf of the union. So, considering
that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an
appeal when it filed the Notice and Memorandum of Appeal to DOLE Regional

76
Office No. IV-A, the same can no longer be treated as an appeal filed by union
SALAMAT. Hence, there is no forum shopping to speak of in this case as only
the Appeal Memorandum with Formal Entry of Appearance filed by Atty.
Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by
SALAMAT.18

Since Mole's appeal filed with the BLR was not specifically authorized by
respondent, such appeal is considered to have not been filed at all. It has been
held that “if a complaint is filed for and in behalf of the plaintiff who is not
authorized to do so, the complaint is not deemed filed. An unauthorized
complaint does not produce any legal effect.”19cralawred

Respondent through its authorized representative filed its Appeal Memorandum


with Formal Entry of Appearance before the Labor Secretary, and not with the
BLR. As the appeal emanated from the petition for cancellation of certificate of
registration filed with the Regional Office, the decision canceling the registration
is appealable to the BLR, and not with the Labor Secretary. However, since the
Labor Secretary motupropio referred the appeal with the BLR, the latter can
now act on it. Considering that Mole's appeal with the BLR was not deemed
filed, respondent’s appeal, through Banzuela and Associates, which the Labor
Secretary referred to the BLR was the only existing appeal with the BLR for
resolution. There is, therefore, no merit to petitioner's claim that BLR chose the
appeal of Banzuela and Associates over Mole's appeal.

The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories


Employees Union20 cited by petitioner is not at all applicable in this case as the
issue therein is the authority of the Labor Secretary to review the decision of the
Bureau of Labor Relations rendered in the exercise of its appellate jurisdiction
over decision of the Regional Director in cases involving cancellations of
certificate of registration of labor unions. We found no grave abuse of discretion
committed by the Secretary of Labor in not acting on therein petitioner's appeal.
The decision of the Bureau of Labor Relations on cases brought before it on
appeal from the Regional Director are final and executory. Hence, the remedy of
the aggrieved party is to seasonably avail of the special civil action
of certiorari under Rule 65 and the Rules of Court. In this case, after the Labor
Secretary motupropio referred respondent's appeal filed with it to the BLR which
rendered its decision reversing the Regional Director, petitioner went directly to
the CA via a petition for certiorari under Rule 65.

As to the second issue, petitioner seeks the cancellation of respondent's


registration on grounds of fraud and misrepresentation bearing on the minimum
requirement of the law as to its membership, considering the big disparity in
numbers, between the organizational meeting and the list of members, and so
misleading the BLR that it obtained the minimum required number of employees
for purposes of organization and registration.

77
We find no merit in the arguments.

Art. 234 of the Labor Code provides:ChanRoblesVirtualawlibrary

ART. 234. Requirements of Registration. - A federation, national union or


industry or trade union center or an independent union 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:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) In case the applicant is an independent union, 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;
(d) If the applicant union has been in existence for one or more years, copies of
its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of
its adoption or ratification, and the list of the members who participated in it."

And after the issuance of the certificate of registration, the labor organization's
registration could be assailed directly through cancellation of registration
proceedings in accordance with Articles 238 and 239 of the Labor Code. And
the cancellation of union certificate of registration and the grounds thereof are
as follows:ChanRoblesVirtualawlibrary

ART. 238. Cancellation of Registration. - The certificate of registration of any


legitimate labor organization, whether national or local, may be cancelled by the
Bureau, after due hearing, only on the grounds specified in Article 239 hereof.

ART. 239. Grounds for Cancellation of Union Registration. - The following may
constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption
or ratification of the constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election
of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.

Petitioner's charge that respondent committed misrepresentation and fraud in


securing its certificate of registration is a serious charge and must be carefully
evaluated. Allegations thereof should be compounded with supporting
circumstances and evidence.21 We find no evidence on record to support
petitioner's accusation.

78
Petitioner's allegation of misrepresentation and fraud is based on its claim that
during the organizational meeting on May 1, 2009, only 68 employees attended,
while respondent claimed that it has 119 members as shown in the document
denominated as “Pangalan ng mgaKasapi ng Unyon;” hence, respondent
misrepresented on the 20% requirement of the law as to its membership.

We do not agree.

It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining
unit. In fact, even the Implementing Rules and Regulations of the Labor Code
does not so provide. It is only under Article 234 (c) that requires 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. Clearly, the 20% minimum
requirement pertains to the employees’ membership in the union and not to the
list of workers who participated in the organizational meeting. Indeed, Article
234 (b) and (c) provide for separate requirements, which must be submitted for
the union's registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20% of which was
about 79. Respondent submitted a document entitled “Pangalan ng MgaKasapi
ng Unyon” showing the names of 119 employees as union members, thus
respondent sufficiently complied even beyond the 20% minimum membership
requirement. Respondent also submitted the attendance sheet of the
organizational meeting which contained the names and signatures of the 68
union members who attended the meeting. Considering that there are 119 union
members which are more than 20% of all the employees of the bargaining unit,
and since the law does not provide for the required number of members to
attend the organizational meeting, the 68 attendees which comprised at least
the majority of the 119 union members would already constitute a quorum for
the meeting to proceed and to validly ratify the Constitution and By-laws of the
union. There is, therefore, no basis for petitioner to contend that grounds exist
for the cancellation of respondent's union registration. For 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.22cralawred

Petitioner's claim that the alleged union members signed documents without
adequate information is not persuasive. The one who alleges a fact has the
burden of proving it and a mere allegation is not evidence.23 In fact, we note that
not one of those listed in the document denominated as “Pangalan ng
MgaKasapi ng Unyon” had come forward to deny their membership with
respondent. Notably, it had not been rebutted that the same union members
had signed the document entitled “Sama-SamangPahayag ng Pagsapi,” thus,
strengthening their desire to be members of the respondent union.

79
Petitioner claims that in the list of members, there was an employee whose
name appeared twice and another employee who was merely a project
employee. Such could not be considered a misrepresentation in the absence of
showing that respondent deliberately did so for the purpose of increasing their
union membership. In fact, even if those two names were not included in the list
of union members, there would still be 117 members which was still more than
20% of the 396 rank-and-file employees.

As to petitioner's argument that the total number of its employees as of May 1,


2009 was 470, and not 396 as respondent claimed, still the 117 union members
comprised more than the 20% membership requirement for respondent's
registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and


Employment,24 we said:ChanRoblesVirtualawlibrary

For the purpose of de-certifying a union such as respondent, it must be shown


that there was misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments thereto,
the minutes of ratification; or, in connection with the election of officers, the
minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed officers and
their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a valid
reason to cancel respondent’s certificate of registration. The cancellation of a
union’s registration doubtless has an impairing dimension on the right of labor to
self-organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under 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.

In this case, we agree with the BLR and the CA that respondent could not have
possibly committed misrepresentation, fraud, or false statements. The alleged
failure of respondent to indicate with mathematical precision the total number of
employees in the bargaining unit is of no moment, especially as it was able to
comply with the 20% minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while respondent
declared that it should only be 455, it still cannot be denied that the latter would
have more than complied with the registration requirement. 25

WHEREFORE, premises considered, the petition for review is DENIED. The


Decision dated December 22, 2010 and the Resolution dated March 29, 2011 of
the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.

80
SO ORDERED.

Velasco, Jr., (Chairperson), Villarama, Jr.,* Mendoza, and Leonen, JJ., concur.

81
SECOND DIVISION

G.R. No. 208986, January 13, 2016

HIJO RESOURCES CORPORATION, Petitioner, v. EPIFANIO P. MEJARES,


REMEGIO C. BALURAN, JR., DANTE SAYCON, AND CECILIO CUCHARO,
REPRESENTED BY NAMABDJERA-HRC, Respondents.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the 29 August 2012 Decision2 and the 13 August 2013
Resolution3 of the Court of Appeals in CA-G.R. SP No. 04058-MIN. The Court of
Appeals reversed and set aside the Resolutions dated 29 June 2009 and 16 December
2009 of the National Labor Relations Commission (NLRC) in NLRC No. MIC-03-
000229-08 (RAB XI-09-00774-2007), and remanded the case to the Regional
Arbitration Branch, Region XI, Davao City for further proceedings.

The Facts

Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and


CecilioCucharo (respondents) were among the complainants, represented by their labor
union named "NagkahiusangMamumuo ng Bit, Djevon, at Raquilla Farms saHijo
Resources Corporation" (NAMABDJERA-HRC), who filed with the NLRC an illegal
dismissal case against petitioner Hijo Resources Corporation (HRC).

Complainants (which include the respondents herein) alleged that petitioner HRC,
formerly known as Hijo Plantation Incorporated (HPI), is the owner of agricultural lands
in Madum, Tagum, Davao del Norte, which were planted primarily with Cavendish
bananas. In 2000, HPI was renamed as HRC. In December 2003, HRC's application for
the conversion of its agricultural lands into agri-industrial use was approved. The
machineries and equipment formerly used by HPI continued to be utilized by HRC.

Complainants claimed that they were employed by HPI as farm workers in HPI's
plantations occupying various positions as area harvesters, packing house workers,
loaders, or labelers. In 2001, complainants were absorbed by HRC, but they were
working under the contractor-growers: Buenaventura Tano (Bit Farm); DjeramePausa
(Djevon Farm); and Ramon Q. Laurente (Raquilla Farm). Complainants asserted that

82
these contractor-growers received compensation from HRC and were under the control
of HRC. They further alleged that the contractor-growers did not have their own
capitalization, farm machineries, and equipment.

On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which was later
registered with the Department of Labor and Employment (DOLE). On 24 August 2007,
NAMABDJERA-HRC filed a petition for certification election before the DOLE.

When HRC learned that complainants formed a union, the three contractor-growers filed
with the DOLE a notice of cessation of business operations. In September 2007,
complainants were terminated from their employment on the ground of cessation of
business operations by the contractor-growers of HRC. On 19 September 2007,
complainants, represented by NAMABDJERA-HRC, filed a case for unfair labor
practices, illegal dismissal, and illegal deductions with prayer for moral and exemplary
damages and attorney's fees before the NLRC.

On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an Order,4 dismissing


NAMABDJERA-HRC's petition for certification election on the ground that there was no
employer-employee relationship between complainants (members of NAMABDJERA-
HRC) and HRC. Complainants did not appeal the Order of Med-Arbiter Jasa but
pursued the illegal dismissal case they filed.

On 4 January 2008, HRC filed a motion to inhibit Labor Arbiter Maria Christina S.
Sagmit and moved to dismiss the complaint for illegal dismissal. The motion to dismiss
was anchored on the following arguments: (1) Lack of jurisdiction under the principle
of res judicata; and (2) The Order of the Med-Arbiter finding that complainants were not
employees of HRC, which complainants did not appeal, had become final and
executory.

The Labor Arbiter's Ruling

On 5 February 2008, Labor Arbiter Sagmit denied the motion to inhibit. Labor Arbiter
Sagmit likewise denied the motion to dismiss in an Order dated 12 February 2008.
Labor Arbiter Sagmit held that res judicata does not apply. Citing the cases of Manila
Golf & Country Club, Inc. v. IAC5 and Sandoval Shipyards, Inc. v. Pepito,6 the Labor
Arbiter ruled that the decision of the Med-Arbiter in a certification election case, by the
nature of that proceedings, does not foreclose further dispute between the parties as to
the existence or non-existence of employer-employee relationship between them. Thus,
the finding of Med-Arbiter Jasa that no employment relationship exists between HRC
and complainants does not bar the Labor Arbiter from making his own independent
finding on the same issue. The non-litigious nature of the proceedings before the Med-
Arbiter does not prevent the Labor Arbiter from hearing and deciding the case. Thus,
Labor Arbiter Sagmit denied the motion to dismiss and ordered the parties to file their
position papers.

HRC filed with the NLRC a petition for certiorari with a prayer for temporary restraining

83
order, seeking to nullify the 5 February 2008 and 12 February 2008 Orders of Labor
Arbiter Sagmit.

The Ruling of the NLRC

The NLRC granted the petition, holding that Labor Arbiter Sagmit gravely abused her
discretion in denying HRC's motion to dismiss. The NLRC held that the Med-Arbiter
Order dated 19 November 2007 dismissing the certification election case on the ground
of lack of employer-employee relationship between HRC and complainants (members of
NAMABDJERA-HRC) constitutes res judicata under the concept of conclusiveness of
judgment, and thus, warrants the dismissal of the case. The NLRC ruled that the Med-
Arbiter exercises quasi-judicial power and the Med-Arbiter's decisions and orders have,
upon their finality, the force and effect of a final judgment within the purview of the
doctrine of res judicata.

On the issue of inhibition, the NLRC found it moot and academic in view of Labor Arbiter
Sagmit's voluntary inhibition from the case as per Order dated 11 March 2009.

The Ruling of the Court of Appeals

The Court of Appeals found the ruling in the Sandoval case more applicable in this
case. The Court of Appeals noted that the Sandoval case, which also involved a petition
for certification election and an illegal dismissal case filed by the union members against
the alleged employer, is on all fours with this case. The issue in Sandoval on the effect
of the Med-Arbiter's findings as to the existence of employer-employee relationship is
the very same issue raised in this case. On the other hand, the case of Chris Garments
Corp. v. Hon. Sto. Tomas7 cited by the NLRC, which involved three petitions for
certification election filed by the same union, is of a different factual milieu.

The Court of Appeals held that the certification proceedings before the Med-Arbiter are
non-adversarial and merely investigative. On the other hand, under Article 217 of the
Labor Code, the Labor Arbiter has original and exclusive jurisdiction over illegal
dismissal cases. Although the proceedings before the Labor Arbiter are also described
as non-litigious, the Court of Appeals noted that the Labor Arbiter is given wide latitude
in ascertaining the existence of employment relationship. Thus, unlike the Med-Artbiter,
the Labor Arbiter may conduct clarificatory hearings and even avail of ocular inspection
to ascertain facts speedily.

Hence, the Court of Appeals concluded that the decision in a certification election case
does not foreclose further dispute as to the existence or non-existence of an employer-
employee relationship between HRC and the complainants.

On 29 August 2012, the Court of Appeals promulgated its Decision, the dispositive
portion of which reads:chanRoblesvirtualLawlibrary

WHEREFORE, the petition is hereby GRANTED and the assailed Resolutions dated
June 29, 2009 and December 16, 2009 of the National Labor Relations Commission are

84
hereby REVERSED AND SET ASIDE. Let NLRC CASE No. RAB-XI-09-00774-0707 be
remanded to the Regional Arbitration Branch, Region XI, Davao City for further
proceedings.

SO ORDERED.8ChanRoblesVirtualawlibrary
cralawlawlibrary

The Issue

Whether the Court of Appeals erred in setting aside the NLRC ruling and remanding the
case to the Labor Arbiter for further proceedings.

The Ruling of the Court

We find the petition without merit.

There is no question that the Med-Arbiter has the authority to determine the existence of
an employer-employee relationship between the parties in a petition for certification
election. As held in M. Y. San Biscuits, Inc. v. Acting Sec.
Laguesma:9chanroblesvirtuallawlibrary

Under Article 226 of the Labor Code, as amended, the Bureau of Labor Relations
(BLR), of which the med-arbiter is an officer, has the following jurisdiction -
"ART. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and the Labor
Relations Divisionfs] in the regional offices of the Department of Labor shall have
original and exclusive authority to act, at their own initiative or upon request of either or
both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces
whether agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of
grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before it, subject
to extension by agreement of the parties." (Italics supplied)
From the foregoing, the BLR has the original and exclusive jurisdiction to inter
alia, decide all disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces whether agricultural or non-agricultural.
Necessarily, in the exercise of this jurisdiction over labor-management relations, the
med-arbiter has the authority, original and exclusive, to determine the existence of an
employer-employee relationship between the parties.

Apropos to the present case, once there is a determination as to the existence of such a
relationship, the med-arbiter can then decide the certification election case. As the
authority to determine the employer-employee relationship is necessary and
indispensable in the exercise of jurisdiction by the med-arbiter, his finding thereon may

85
only be reviewed and reversed by the Secretary of Labor who exercises appellate
jurisdiction under Article 259 of the Labor Code, as amended, which provides -
"ART. 259. Appeal from certification election orders. - Any party to an election may
appeal the order or results of the election as determined by the Med-Arbiter directly to
the Secretary of Labor and Employment on the ground that the rules and regulations or
parts thereof established by the Secretary of Labor and Employment for the conduct of
the election have been violated. Such appeal shall be decided within fifteen (15)
calendar days."10
cralawlawlibrary

In this case, the Med-Arbiter issued an Order dated 19 November 2007, dismissing the
certification election case because of lack of employer-employee relationship between
HRC and the members of the respondent union. The order dismissing the petition was
issued after the members of the respondent union were terminated from their
employment in September 2007, which led to the filing of the illegal dismissal case
before the NLRC on 19 September 2007. Considering their termination from work, it
would have been futile for the members of the respondent union to appeal the Med-
Arbiter' s order in the certification election case to the DOLE Secretary. Instead, they
pursued the illegal dismissal case filed before the NLRC.

The Court is tasked to resolve the issue of whether the Labor Arbiter, in the illegal
dismissal case, is bound by the ruling of the Med-Arbiter regarding the existence or non-
existence of employer-employee relationship between the parties in the certification
election case.

The Court rules in the negative. As found by the Court of Appeals, the facts in this case
are very similar to those in the Sandoval case, which also involved the issue of whether
the ruling in a certification election case on the existence or non-existence of an
employer-employee relationship operates as res judicata in the illegal dismissal case
filed before the NLRC. In Sandoval, the DOLE Undersecretary reversed the finding of
the Med-Arbiter in a certification election case and ruled that there was no employer-
employee relationship between the members of the petitioner union and Sandoval
Shipyards, Inc. (SSI), since the former were employees of the subcontractors.
Subsequently, several illegal dismissal cases were filed by some members of the
petitioner union against SSI. Both the Labor Arbiter and the NLRC ruled that there was
no employer-employee relationship between the parties, citing the resolution of the
DOLE Undersecretary in the certification election case. The Court of Appeals reversed
the NLRC ruling and held that the members of the petitioner union were employees of
SSI. On appeal, this Court affirmed the appellate court's decision and ruled that the
Labor Arbiter and the NLRC erred in relying on the pronouncement of the DOLE
Undersecretary that there was no employer-employee relationship between the parties.
The Court cited the ruling in the Manila Golf11 case that the decision in a certification
election case, by the very nature of that proceeding, does not foreclose all further
dispute between the parties as to the existence or non-existence of an employer-
employee relationship between them.

86
This case is different from the Chris Garments case cited by the NLRC where the Court
held that the matter of employer-employee relationship has been resolved with finality
by the DOLE Secretary, whose factual findings were not appealed by the losing party.
As mentioned earlier, the Med-Arbiter's order in this case dismissing the petition
for certification election on the basis of non-existence of employer-employee
relationship was issued after the members of the respondent union were
dismissed from their employment. The purpose of a petition for certification election
is to determine which organization will represent the employees in their collective
bargaining with the employer.12The respondent union, without its member-
employees, was thus stripped of its personality to challenge the Med-Arbiter's
decision in the certification election case. Thus, the members of the respondent
union were left with no option but to pursue their illegal dismissal case filed
before the Labor Arbiter. To dismiss the illegal dismissal case filed before the Labor
Arbiter on the basis of the pronouncement of the Med-Arbiter in the certification election
case that there was no employer-employee relationship between the parties, which the
respondent union could not even appeal to the DOLE Secretary because of the
dismissal of its members, would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot allow.

WHEREFORE, we DENY the petition. We AFFIRM the 29 August 2012 Decision and
the 13 August 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 04058-MIN.

SO ORDERED.chanroblesvirtuallawlibrary

Carpio, (Chairperson), Brion, Del Castillo, Mendoza, and Leonen, JJ., concur.

87
FIRST DIVISION

January 23, 2017

G.R. No. 207971

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,


vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1assails the January 8, 2013 Decision2 of the Court
of Appeals (CA) which dismissed the Petition for Certiorari3in CA-G.R. SP No. 114122,
and its subsequent June 27, 2013 Resolution 4denying herein petitioner's Motion for
Reconsideration. 5

Factual Antecedents

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit


educational institution. Respondent Asian Institute of Management Faculty Association
(AFA) is a labor organization composed of members of the AIM faculty, duly registered
under Certificate of Registration No. NCR-UR-12-4076-2004.

On May 16, 2007, respondent filed a petition for certification election6 seeking to
represent a bargaining unit in AIM consisting of forty (40) faculty members. The case
was docketed as DOLE Case No. NCR-OD-M-0705-007. Petitioner opposed the
petition, claiming that respondent's members are neither rank-and-file nor supervisory,
but rather, managerial employees.7

On July 11, 2007, petitioner filed a petition for cancellation of respondent's


certificate of registration8 - docketed as DOLE Case No. NCROD-0707-001-LRD -
on the grounds of misrepresentation in registration and that respondent is composed of
managerial employees who are prohibited from organizing as a union.

On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued
an Order9 denying the petition for certification election on the ground that AIM' s faculty
88
members are managerial employees. This Order was appealed by respondent before
the Secretary of the Department of Labor and Employment (DOLE), 10 who reversed foe
same via a February 20, 2009 Decision 11 and May 4, 2009 Resolution, 12 decreeing
thus:

WHEREFORE, the appeal filed by the Asian Institute of Management Faculty


Association (AIMFA) is GRANTED. The Order dated 30 August 2007 of DOLE-NCR
Mediator-Arbiter Michael T. Parado is hereby REVERSED and SET ASIDE.

Accordingly, let the entire records of the case be remanded to DOLEN CR for the
conduct of a certification election among the faculty members of the Asian Institute of
Management (AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA); and

2. No Union.

SO ORDERED.13

Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated February 16,


2009 was issued by DOLE-NCR Regional Director Raymundo G. Agravante granting
AIM's petition for cancellation of respondent's certificate of registration and ordering its
delisting from the roster of legitimate labor organizations. 1bis Order was appealed by
respondent before the Bureau labor Relations15 (BLR), which, in a December 29, 2009
Decision,16 reversed the same and ordered respondent's retention in the roster of
legitimate labor organizations. The BLR held that the grounds relied upon in the petition
for cancellation are not among the grounds authorized under Article 239 of the Labor
Code, 17 and that respondent's members are not managerial employees. Petitioner
moved to reconsider, but was rebuffed in a March 18, 2010 Resolution. 18

CA-G.R. SP No.109487 and G.R. No.197089

Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE Secretary's
February 20, 2009 Decision and May 4, 2009 Resolution relative to DOLE Case No.
NCR-OD-M-0705-007, or respondent's petition for certification election. Docketed as
CA-G.R. SP No. 109487, the petition is based on the arguments that 1) the bargaining
unit within AIM sought to be represented is composed of managerial employees who
are not eligible to join, assist, or form any labor organization, and 2) respondent is not a
legitimate labor organization that may conduct a certification election.

On October 22, 2010, the CA rendered its Decision19 containing the following
pronouncement:

AIM insists that the members of its tenure-track faculty are managerial employees, and
therefore, ineligible to join, assist or form a labor organization. It ascribes grave abuse
of discretion on SOLE20 for its rash conclusion that the members of said tenure-track

89
faculty are not managerial employees solely because the faculty's actions are still
subject to evaluation, review or final approval by the board of trustees ("BOT'). AIM
argues that the BOT does not manage the day-to-day affairs, nor the making and
implementing of policies of the Institute, as such functions are vested with the tenure-
track faculty.

We agree.

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x xx

(m) 'Managerial employee' is 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. 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. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.'

There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of the
Labor Code. Those who 'lay down x xx management policies', such as the Board of
Trustees, and those who 'execute management policies and/or hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees'.

x xxx

On its face, the SOLE's opinion is already erroneous because in claiming that the 'test
of 'supervisory' or 'managerial status' depends on whether a person possesses
authority to act in the interest of his employer in the matter specified in Article 212(m) of
the Labor Code and Section l(m) of its Implementing Rules', he obviously was referring
to the old definition of a managerial employee. Such is evident in his use of
'supervisory or managerial status', and reference to 'Section l(m) of its Implementing
Rules'. For presently, as aforequoted in Article 212(m) of the Labor Code and as
amended by Republic Act 6715 which took effect on March 21, 1989, a managerial
employee is already different from a supervisory employee. x xx

x xxx

In further opining that a managerial employee is one whose 'authority is not merely
routinary or clerical in nature but requires the use of independent judgment', a
description which fits now a supervisory employee under Section l(t), Rule I, Book
V of the Omnibus Rules Implementing the Labor Code, it then follows that the SOLE
was not aware of the change in the law and thus gravely abused its discretion
amounting to lack of jurisdiction in concluding that AIM's 'tenure-track' faculty
are not managerial employees.

90
SOLE further committed grave abuse of discretion when it concluded that said tenure-
track faculty members are not managerial employees on the basis of a 'footnote' in
AIM's Policy Manual, which provides that 'the policy[-] making authority of the faculty
members is merely recommendatory in nature considering that the faculty standards
they formulate are still subject to evaluation, review or final approval by the [AIM]'s
Board of Trustees'. x xx

x xxx

Clearly, AIM's tenure-track faculty do not merely recommend faculty


standards.1âwphi1 They 'determine all faculty standards', and are thus managerial
employees. The standards' being subjected to the approval of the Board of Trustees
would not make AIM's tenure-track faculty non-managerial because as earlier
mentioned, managerial employees are now of two categories: (1) those who 'lay down
policies', such as the members of the Board of Trustees, and (2) those
who 'execute management policies (etc.)’, such as AIM's tenure-track faculty.

x xxx

It was also grave abuse of discretion on the part of the SOLE when he opined that AIM'
s tenure-track faculty members are not managerial employees, relying on an
impression that they were subjected to rigid observance of regular hours of work as
professors. x xx

x xxx

More importantly, it behooves the SOLE to deny AFA's appeal in light of the
February 16, 2009 Order of Regional Director Agravante delisting AFA from the
roster of legitimate labor organizations. For, only legitimate labor organizations
are given the right to be certified as sole and exclusive bargaining agent in an
establishment.

x xxx

Here, the SOLE committed grave abuse of discretion by giving due course to AFA's
petition for certification election, despite the fact that: (1) AFA's members are
managerial employees; and (2) AFA is not a legitimate labor organization. 'These facts
rendered AFA ineligible, and without any right to file a petition for certification election,
the object of which is to determine the sole and exclusive bargaining representative of
qualified AIM employees.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated February
20, 2009 and Resolution dated May 4, 2009 are hereby REVERSED and SET ASIDE.
The Order dated August 30, 2007 of Mediator-Arbiter Parado is hereby REINSTATED.

SO ORDERED.21 (Emphasis in the original)

91
Respondent sought reconsideration, but was denied. It thus instituted a Petition for
Review on Certiorari before this Court on July 4, 2011. The Petition, docketed as G.R.
No. 197089, remains pending to date.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's


petition for cancellation of respondent's certificate of registration, petitioner filed on May
24, 20 l 0 a Petition for Certiorari22before the CA, questioning the BLR's December 29,
2009 decision and March 18, 2010 resolution. The petition, docketed as CA-G.R. SP
No. 114122, alleged that the BLR committed grave abuse of discretion in granting
respondent's appeal and affirming its certificate of registration notwithstanding that its
members are managerial employees who may not join, assist, or form a labor union or
organization.

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

x xxx

It is therefore incumbent upon the Institute to prove that the BLR committed grave
abuse of discretion in issuing the questioned Decision.1âwphi1 Towards this end, AIM
must lay the basis by showing that any of the grounds provided under Article 239 of the
Labor Code, exists, to wit:

Article 239. Grounds for cancellation of union registration. - The following may constitute
grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or


ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of


officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

Article 238 of the Labor Code provides that the enumeration of the grounds for
cancellation of union registration, is exclusive; in other words, no other grow1ds for
cancellation is acceptable, except for the three (3) grounds stated in Article 239. The
scope of the grounds for cancellation has been explained-

For the purpose of de-certifying a union such as respondent, it must be shown that
there was misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto; the minutes of

92
ratification; or, in connection with the election of officers, the minutes of the election of
officers, the list of voters, or failure to submit these documents together with the list of
the newly elected-appointed officers and their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in
the organizational meeting would not, to our mind, provide a valid reason to cancel
respondent's certificate of registration. The cancellation of a union's registration
doubtless has an impairing dimension on the right of labor to self-organization. For fraud
and misrepresentation to be grounds for cancellation of union registration under the
Labor Code, the nature of the fraud andmisrepresentation must be grave and
compelling enough to

vitiate the consent of a majority of union members.23

In this regard, it has also been held that:

Another factor which militates against the veracity of the allegations in


the SinumpaangPetisyon is the lack of particularities on how, when and where
respondent union perpetrated the alleged fraud on each member. Such details are
crucial for, in the proceedings for cancellation of union registration on the ground of
fraud or misrepresentation, what needs to be established is that the specific act or
omission of the union deprived the complaining employees-members of their right to
choose.24

A cursory reading of the Petition shows that AIM did NOT allege any specific act of
fraud or misrepresentation committed by AFA. What is clear is that the Institute seeks
the cancellation of the registration of AFA based on Article 245 of the Labor Code on
the ineligibility of managerial employees to form or join labor unions. Unfortunately for
the petitioner, even assuming that there is a violation of Article 245, such violation will
not result in the cancellation of the certificate of registration of a labor organization.

It should be stressed that a Decision had already been issued by the DOLE in the
Certification Election case; and the Decision ordered the conduct of a certification
election among the faculty members of the Institute, basing its directive on the finding
that the members of AFA were not managerial employees and are therefore eligible to
form, assist and join a labor union. As a matter of fact, the certification election had
already been held on October 16, 2009, albeit the results have not yet been resolved as
inclusion/exclusion proceedings are still pending before the DOLE. The remedy
available to the Institute is not the instant Petition, but to question the status of the
individual union members of the AFA in the inclusion/exclusion proceedings pursuant to
Article 245-A of the Labor Code, which reads:

Article 245-A. Effect of inclusion as members of employees outside the bargaining unit.
- The inclusion as union members of employees outside the bargaining unit shall not be
a ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said union.

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Petitioner insists that Article 245-A is not applicable to this case as all AF A members
are managerial employees. We are not persuaded.

The determination of whether any or all of the members of AFA should be considered
as managerial employees is better left to the DOLE because,

It has also been established that in the determination of whether or not certain
employees are managerial employees, this Court accords due respect and therefore
sustains the findings of fact made by quasi-judicial agencies which are supported by
substantial evidence considering their expertise in their respective fields. 25

From the discussion, it is manifestly clear that the petitioner foiled to prove that the BLR
committed grave abuse of discretion; consequently, the Petition must fail.

WHEREFORE, the Petition is hereby DENIED. The Decision and Resolution of public
respondent Bureau of Labor Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-001) are
hereby AFFIRMED.

SO ORDERED.26 (Emphasis in the original)

Petitioner filed its Motion for Reconsideration, which was denied by the CA via its June
27, 2013 Resolution. Hence, the instant Petition.

In a November 10, 2014 Resolution,27 the Court resolved to give due course to the
Petition.

Issue

Petitioner claims that the CA seriously erred in affirming the dispositions of the BLR and
thus validating the respondent's certificate of registration notwithstanding the fact that its
members are all managerial employees who are disqualified from joining, assisting, or
forming a labor organization.

Petitioner's Arguments

Praying that the assailed CA dispositions be set aside and that the DOLE-NCR
Regional Director's February 16, 2009 Order granting AIM's petition for cancellation of
respondent's certificate of registration and ordering its delisting from the roster of
legitimate labor organizations be reinstated instead, petitioner maintains in its Petition
and Reply28that respondent's members are all managerial employees; that the CA erred
in declaring that even if respondent's members are all managerial employees, this alone
is not a ground for cancellation of its certificate of registration; that precisely, the finding
in DOLE Case No. NCR-ODM- 0705-007, which the CA affirmed in CA-G.R. SP No.
109487, is that respondent's members are managerial employees; that respondent's
declaration that its members are eligible to join, assist, or form a labor organization is an
act of misrepresentation, given the finding in CA-G.R. SP No. 109487 that they are

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managerial employees; and that the grounds for cancellation of union registration
enumerated in Article 239 of the Labor Code are not exclusive.

Respondent's Arguments

In its Comment,29 respondent maintains that the CA was right to treat petitioner’s case
for cancellation of its union registration with circumspection; that petitioner's ground for
filing the petition for cancellation is not recognized under Article 239; that petitioner's
accusation of misrepresentation is unsubstantiated, and is being raised for the first time
at this stage; that its members are not managerial employees; and that petitioner's
opposition to respondent's attempts at self-organization constitutes harassment,
oppression, and violates the latter's rights under the Labor Code and the Constitution.

Our Ruling

In Holy Child Catholic School v. Hon. Sto. Tomas,30this Court declared that "[i]n case of
alleged inclusion of disqualified employees in a union, the proper procedure for an
employer like petitioner is to directly file a petition for cancellation of the union's
certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended."

On the basis of the ruling in the above-cited case, it can be said that petitioner was
correct in filing a petition for cancellation of respondent's certificate of registration.
Petitioner's sole ground for seeking cancellation of respondent's certificate of
registration - that its members are managerial employees and for this reason, its
registration is thus a patent nullity for being an absolute violation of Article 245 of the
Labor Code which declares that managerial employees are ineligible to join any labor
organization --- is, in a sense, an accusation that respondent is guilty of
misrepresentation for registering under the claim that its members are not managerial
employees.

However, the issue of whether respondent's members are managerial employees is still
pending resolution by way of petition for review on certiorari in G.R. No. 197089, which
is the culmination of all proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where
the issue relative to the nature of respondent's membership was first raised by petitioner
itself and is there fiercely contested. The resolution of this issue cannot be pre-empted;
until it is determined with finality in G.R. No. l 97089, the petition for cancellation of
respondent's certificate of registration on the grounds alleged by petitioner cannot be
resolved. As a matter of courtesy and in order to avoid conflicting decisions, We must
await the resolution of the petition in G.R. No. 197089.

x xx If a particular point or question is in issue in the second action, and the judgment
will depend on the determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the second if
that same point or question was in issue and adjudicated in the first suit. x xx Identity of
cause of action is not required, but merely identity of issues.31 (Citation omitted)

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WHEREFORE, considering that the outcome of this case depends on the resolution of
the issue relative to the nature of respondent's membership pending in G.R. No.
197089, this case is ordered CONSOLIDATED with G.R. No. 197089.

SO ORDERED.

MARIANO C. DEL CASTILLO


Associate Justice

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