III. BARGAINING UNIT respondent s two opposing factions.
The following
FIRST DIVISION
[G.R. NO. 169254 - August 23, 2012]
DE LA SALLE UNIVERSITY, Petitioner, v. DE LA SALLE
UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA-
NAFTEU), Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before this Court is a Petition for Review
on Certiorariunder Rule 45 of the Rules of Court assailing
the March 4, 2005 Decision 1 and August 5, 2005
Resolution2 of the Court of Appeals in CA-G.R. SP No.
82472, entitled De La Salle University v. the Honorable
Secretary of Labor and De La Salle University Employees
Association (DLSUEA-NAFTEU), which affirmed the
November 17, 2003 Decision3 and January 20, 2004
Order4 of the Secretary of Labor in OS-AJ-0033-2003
(NCMB-NCR-NS-08-246-03). These decisions and
resolutions consistently found petitioner guilty of unfair
labor practice for failure to bargain collectively with
respondent.
This petition involves one of the three notices of strike filed
by respondent De La Salle University Employees
Association (DLSUEANAFTEU) against petitioner De La
Salle University due to its refusal to bargain collectively
with it in light of the intra-union dispute between
1
narration of facts will first discuss the circumstances
surrounding the said intra-union conflict between the rival
factions of respondent union and, thereafter, recite the
cases relating to the aforementioned conflict, from the
complaint for unfair labor practice to the subsequent
notices of strike, and to the assumption of jurisdiction by
the Secretary of Labor.
Petition for Election of Union Officers
On May 30, 2000, some of respondent s members headed
by Belen Aliazas (the Aliazas faction) filed a petition for the
election of union officers in the Bureau of Labor Relations
(BLR).5 They alleged therein that there has been no
election for respondent s officers since 1992 in supposed
violation of the respondent union s constitution and by-
laws which provided for an election of officers every three
years.6 It would appear that respondent s members
repeatedly voted to approve the hold-over of the
previously elected officers led by Baylon R. Bañez
(Bañez faction) and to defer the elections to expedite the
negotiations of the economic terms covering the last two
years of the 1995-2000 collective bargaining agreement
(CBA)7 pursuant to Article 253-A of the Labor Code.8ςrνll
On March 19, 2001, BLR Regional Director Alex E.
Maraan issued a Decision ordering the conduct of an
election of union officers to be presided by the Labor
Relations Division of the Department of Labor and
Employment-National Capital Region (DOLE-NCR).9 He
noted therein that the members of the Bañez faction were
not elected by the general membership but were
appointed by the Executive Board to their positions since
1985.10ςrνll
The Bañez faction appealed the said March 19, 2001
Decision of the BLR Regional Director.
While the appeal was pending, the Aliazas faction filed a
Very Urgent Motion for Intervention in the BLR. They
alleged therein that the Bañez faction, in complete
disregard of the March 19, 2001 Decision, scheduled a
"regular" election of union officers without notice to or
participation of the DOLE-NCR.11ςrνll
In an Order dated July 6, 2001, BLR Director IV Hans Leo
J. Cacdac granted the motion for intervention.12 He held
that the unilateral act of setting the date of election on July
9, 2001 and the disqualification of the Aliazas faction by
the DLSUEA-COMELEC supported the intervening faction
s fear of biased elections.13ςrνll
Thereafter, in a Resolution dated May 23, 2002, BLR
Director Cacdac dismissed the appeal of the Bañez
faction. The salient portions thereof
stated:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The exercise of a union member s basic liberty to choose
the union leadership is guaranteed in Article X of
[respondent s] constitution and by-laws. Section 4
mandates the conduct of a regular election of officers on
the first Saturday of July and on the same date every three
years thereafter.
2
In unequivocal terms, Article 241(c) of the Labor Code
states that "[t]he members shall directly elect their officers,
including those of the national union or federation, to which
they or their union is affiliated, by secret ballot at intervals
of five (5) years."
[The Bañez faction] admitted that no elections were
conducted in 1992 and 1998, when the terms of office
of the officers expired. This Office emphasizes that even
the decision to dispense with the elections and allow the
hold-over officers to continue should have been subjected
to a secret ballot under Article 241(d) which
states:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The members shall determine by secret ballot, after due
deliberation, any question of major policy affecting the
entire membership of the organization, unless the nature
of the organization or force majeure renders such secret
ballot impractical, in which case the board of directors of
the organization may make the decision in behalf of the
general membership.
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With the clear and open admission that no election
transpired even after the expiration of the union
officers terms of office, the call for the conduct of
elections by the Regional Director was valid and
should be sustained.14 (Emphases supplied.)
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Subsequently, in a memorandum dated May 16, 2003,
BLR Director Cacdac stated that there was no void in the
union leadership as the March 19, 2001 Decision of
Regional Director Maraan did not automatically terminate
the Bañez faction s tenure in office. He explained therein
that "[a]s duly-elected officers of [respondent], their
leadership is not deemed terminated by the expiration of
their terms of office, for they shall continue their functions
and enjoy the rights and privileges pertaining to their
respective positions in a hold-over capacity, until their
successors shall have been elected and qualified." 15ςrνll
On August 28, 2003, an election of union officers under
the supervision of the DOLE was conducted. The Bañez
faction emerged as the winner thereof.16 The Aliazas
faction contested the election results.
On October 29, 2003, the Bañez faction was formally
proclaimed as the winner in the August 28, 2003 election
of union officers.17ςrνll
The Complaint for Unfair Labor
Practices and Three Notices of
Strike
On March 20, 2001, despite the brewing conflict between
the Aliazas and Bañez factions, petitioner entered into a
five-year CBA covering the period from June 1, 2000 to
May 31, 2005.18ςrνll
On August 7, 2001, the Aliazas faction wrote a letter to
petitioner requesting it to place in escrow the union dues
and other fees deducted from the salaries of employees
3
pending the resolution of the intra-union conflict. We quote
the pertinent portion of the letter
here:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The [BLR], in its March 19, 2001 [decision], declared that
the hold-over capacity as president of Mr. Baylon Bañez,
as well as that of the other officers [of respondent] has
been extinguished. It was likewise stated in the [decision]
that "to further defer the holding of a local election is
whimsical, capricious and is a violation of the union
members rights under Article 241 and [is] punishable by
expulsion."
This being so, we would like to request [petitioner] to
please put on escrow all union dues/agency fees and
whatever money considerations deducted from salaries of
the concerned co-academic personnel until such time that
an election of union officials has been scheduled and
subsequent elections has been held. We fully understand
that putting the collection on escrow means the
continuance of our monthly deductions but the same will
not be remitted to [respondent s] funds.19ςrνll
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Petitioner acceded to the request of the Aliazas faction
and informed the Bañez faction of such fact in a letter
dated August 16, 2001. Petitioner
explained:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
It is evident that the intra-union dispute between the
incumbent set of officers of your Union on one hand and a
sizeable number of its members on the other hand has
reached serious levels. By virtue of the 19 March 2001
Decision and the 06 July 2001 Order of the Department of
Labor and Employment (DOLE), the hold-over authority of
your incumbent set of officers has been considered
extinguished and an election of new union officers, to be
conducted and supervised by the DOLE, has been
directed to be held. Until the result of this election
[come] out and a declaration by the DOLE of the
validly elected officers is made, a void in the Union
leadership exists.
In light of these circumstances, the University has no other
alternative but to temporarily do the
following:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
1. Establish a savings account for the Union where all the
collected union dues and agency fees will be deposited
and held in trust; andcralawlibrary
2. Discontinue normal relations with any group within the
Union including the incumbent set of officers.
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We are informing you of this decision of [petitioner] not
only for your guidance but also for the apparent reason
that [it] does not want itself to be unnecessarily involved in
your intra-union dispute. This is the only way [petitioner]
can maintain neutrality on this matter of grave
concern.20 (Emphasis supplied.)
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4
In view of the foregoing decision of petitioner, respondent
filed a complaint for unfair labor practice in the National
Labor Relations Commission (NLRC) on August 21,
2001.21 It alleged that petitioner committed a violation of
Article 248(a) and (g) of the Labor Code which
provides:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Article 248. Unfair labor practices of employers. It shall be
unlawful for an employer to commit any of the following
unfair labor practice:ςrαlαω
(a) To interfere with, restrain or coerce employees in the
exercise of their right to self-organization.
xxx
(d) To initiate, dominate, assist or otherwise interfere with
the formation or administrator of any labor organization,
including the giving of financial or other support to it or its
organizers or supporters.
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Respondent union asserted that the creation of escrow
accounts was not an act of neutrality as it was influenced
by the Aliazas factions s letter and was an act of
interference with the internal affairs of the union. Thus,
petitioner s non-remittance of union dues and
discontinuance of normal relations with it constituted unfair
labor practice.
Petitioner, for its defense, denied the allegations of
respondent and insisted that its actions were motivated by
good faith.
Meanwhile, on March 7, 2002, respondent filed a notice of
strike in the National Conciliation and Mediation Board
(NCMB).22ςrνll
Shortly thereafter, or on July 12, 2002, Labor Arbiter Felipe
P. Pati dismissed the August 21, 2001 complaint for unfair
labor practice against petitioner for lack of merit in view of
the May 23, 2002 decision of the BLR, affirming the need
to conduct an election of the union s officers.23 The labor
arbiter, in effect, upheld the validity of petitioner s view that
there was a void in the leadership of respondent.
The July 12, 2002 Decision of Labor Arbiter Pati, however,
did not settle matters between respondent and petitioner.
On March 15, 2003, respondent sent a letter to petitioner
requesting for the renegotiation of the economic terms for
the fourth and fifth years of the then current CBA, to
wit:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
This refers to the re-negotiation of the economic provisions
for the [fourth and fifth] year[s] of the 2000-2005 [CBA] that
will commence sometime in March 2003.
In this regard, the [Bañez faction] for and in behalf of
[respondent] would like to respectfully request your good
office to provide us a copy of the latest Audited Financial
Statements of [petitioner,] including its budget
performance report so that [petitioner] and [respondent
5
through] their respective authorized representatives could
facilitate the negotiations thereof.
We are furnishing [petitioner through] your good self a
copy of [our] CBA economic proposals for the [fourth and
fifth] year[s] of the 2000-2005 CBA signed by its
authorized negotiating panel.
We also request [petitioner] to furnish us a copy of its
counter proposals as well as a list of its negotiating panel
not later than ten (10) days from receipts of [our] CBA
proposals so that [we] and [petitioner] can now proceed
with the initial conference to discuss the ground rules that
will govern the CBA negotiation.24ςrνll
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In a letter dated March 20, 2003,25 petitioner denied
respondent s request. It stated
therein:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Pursuant to the [d]ecisions of appropriate government
authority, and consistent with the position enunciated and
conveyed to you by [petitioner] in my letter dated August
16, 2001, there is a conclusion of fact that there is an
absolute void in the leadership of [respondent].
Accordingly, your representation as President or officer of,
as well as, that of all persons purporting to be officers and
members of the board of the said employees association
[will] not [be] recognized. Normal relations with the
union cannot occur until the said void in the
leadership of [respondent] is appropriately
filled. Affected by the temporary suspension of
normal relations with [respondent] is the
renegotiation of the economic provisions of the 2002-
2005 CBA. No renegotiation can occur given the void
in the leadership of [respondent.]26ςrνll
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As a consequence of the aforementioned letter,
respondent filed a second notice of strike on April 4,
2003.27 Upon the petition filed by petitioner on April 11,
2003,28 the Secretary of Labor assumed jurisdiction over
the matter pursuant to Article 263 of the Labor Code 29 as
petitioner, an educational institution, was considered as
belonging to an industry indispensable to national interest
and docketed the case as OS-AJ-0015-2003.30ςrνll
On June 26, 2003, the Second Division of the NLRC
affirmed the July 12, 2002 Decision of Labor Arbiter
Pati.31 Respondent moved for reconsideration but it was
denied by the NLRC in a Resolution dated September 30,
2003.32ςrνll
Meanwhile, on July 28, 2003, the Secretary of Labor
issued a Decision33 in OS-AJ-0015-2003, finding
petitioner guilty of violating Article 248(g) in relation to
Article 252 of the Labor Code.34 The salient portion thereof
stated:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The University is guilty of refusal to bargain amounting to
an unfair labor practice under Article 248(g) of the Labor
Code. Indeed there was a requirement on both parties of
the performance of the mutual obligation to meet and
convene promptly and expeditiously in good faith for the
6
purpose of negotiating an agreement. Undoubtedly, both
[petitioner] and [respondent] entered into a [CBA] on
[March 20, 2001. The term of the said CBA commenced
on [June 1, 2000 and with the expiration of the economic
provisions on the third year, [respondent] initiated
negotiation by sending a letter dated March 15, 2003,
together with the CBA proposal. In reply to the letter of
[respondent], [petitioner] in its letter dated [March 20, 2003
refused.
Such an act constituted an intentional avoidance of a duty
imposed by law. There was nothing in the [March 19, 2001
and July 6, 2001 orders] of Director Maraan and Cacdac
which restrained or enjoined compliance by the parties
with their obligations under the CBA and under the law.
The issue of union leadership is distinct and separate from
the duty to bargain.
In fact, BLR Director Cacdac clarified that there was no
void in [respondent s] leadership. The pertinent decision
dated March 19, 2001 x x x
reads :ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
35
We take this opportunity to clarify that there is no void in
[respondent s] leadership. The [March 19, 2001 decision]
x x x should not be construed as an automatic termination
of the incumbent officers[] tenure of office. As duly-elected
officers of [respondent], their leadership is not deemed
terminated by the expiration of their terms of office, for they
shall continue their functions and enjoy the rights and
privileges pertaining to their respective positions in a hold-
over capacity, until their successors shall have been
elected and qualified.
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It is thus very clear. x x x. This official determination by the
BLR Director [Cacdac] removes whatever cloud of doubt
on the authority of the incumbent to negotiate for and in
behalf of [respondent] as the bargaining agent of all the
covered employees. [Petitioner] is duty bound to negotiate
collectively pursuant to Art. 252 of the Labor Code, as
amended.
xxx
On the question: [i]s [petitioner] guilty of unfair labor
practice? This office resolves the issue in the affirmative.
Citing the case of the Divine Word University of Tacloban
v. Secretary of Labor, [petitioner] is guilty of unfair labor
practice in refusing to abide by its duty to bargain
collectively. The refusal of [petitioner] to bargain is tainted
with bad faith amounting to unfair labor practice. There is
no other way to resolve the issue given the facts of the
case and the law on the matter.
WHEREFORE, premises considered, this Office finds
[petitioner] guilty of refusal to bargain collectively in
violation of Article 252 in relation to Article 248 of the Labor
Code, as amended. Management is hereby directed to
cease and desist from refusing to bargain collectively. The
parties are therefore directed to commence negotiations
effective immediately.36 (Citations omitted.)
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7
On August 1, 2003, respondent reiterated its demand on
petitioner to bargain collectively pursuant to the
aforementioned Decision of the Secretary of Labor.37ςrνll
On August 4, 2003, petitioner sent a letter to respondent
explaining that it cannot act on the latter s letter. The
August 4, 2003 letter of petitioner
stated:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
[Petitioner s] counsel is preparing a Motion for
Reconsideration that would be filed with the Office of the
Secretary of Labor and Employment. Under the Rule,
[petitioner] still has the remedy of filing such Motion with
the Office of the Secretary before elevating the matter to
higher authorities should it become necessary.
We, therefore, regret to advise you that [petitioner] cannot
accede to your demand to immediately commence
negotiations for the CBA with your group or any other
group of Union members, as the case may be, until such
time that the case before the Secretary is resolved with
finality. We will, therefore, continue to defer the CBA
negotiations pending final resolution of the matter.
As regards your other demands, [petitioner] is of the
position that the matters subject of said demands are still
pending before the various offices of the Labor Arbiters
and NLRC and, therefore, it cannot act on the same until
such time that said cases are likewise resolved with
finality. It cannot be assumed that all these cases that you
filed have been rendered moot and academic by the
Secretary s Decision, otherwise you would, in effect, be
admitting that you have engaged in "forum
shopping."38ςrνll
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Failing to secure a reconsideration of the July 28, 2003
Decision of the Secretary of Labor, petitioner assailed the
same in the Court of Appeals via a Petition
for Certioraridocketed as CA-G.R. SP No. 81649.
On August 27, 2003, respondent filed the third notice of
strike,39 in the wake of petitioner s August 4, 2003 letter
and citing among others petitioner s alleged violation of the
CBA and continuing refusal to bargain in good faith.
Petitioner, on the other hand, filed a petition for
assumption of jurisdiction for this third notice of
strike.40 Again, the Secretary of Labor assumed
jurisdiction. This case was docketed as OS-AJ-0033-2003.
On November 17, 2003, the Secretary of Labor, in
resolving OS-AJ-0033-2003, cited the July 28, 2003
Decision in OS-AJ-0015-2003, and consequently declared
that petitioner committed an unfair labor practice. The
salient portions of said Decision
stated:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Considering that this case, docketed as Case No. OS-
AJ-0033-2003 is based on the same set of facts with
another case, involving the same parties numbered as
OS-AJ-0015-2003, and based on the same factual and
legal circumstances, we have to consistently hold that
the [petitioner] has indeed failed to comply with its
obligation under the law. As a matter of fact, it admits in
8
persisting to refuse despite the fact that there is no more
legal obstacle preventing the commencement of the
Collective Bargaining Negotiation between the
parties. Anent the so called void in the Union
leadership, We declared that the same does not
constitute a valid ground to refuse to negotiate
because [petitioner s] duty to bargain under the law is
due and demandable under the law by [respondent] as
a whole and not by any faction within the
union.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
xxx
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x x x Events have lately turned out in favor of [respondent],
thereby obliterating any further justification on the part of
[petitioner] not to bargain. On October 29, 2003, the new
Regional Director of DOLENCR, Ciriaco E. Lagunzad
III, issued a resolution declaring the Bañez group as
the duly elected officers of the Union. x x
x.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
xxx
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The above election results were the outcome of a duly-
held union election, supervised by the Department s
Regional Office. This was the election ordered in
the [July 6, 2001 and March 19, 2001 orders of the
BLR]. This was also the same election invoked
by [petitioners] in trying to justify it continuing refusal
to bargain.
The [members of the Bañez faction have] reportedly
taken their oath of office and have qualified. [Petitioner] is
now under estoppel from recognizing them, considering
that it committed in writing to recognize and commence
bargaining once a set of duly elected officers [is]
proclaimed after an election duly conducted under the
supervision of the
Department.ςηαñrοblεš νιr†υαl lαω lιbrαr
ÿ
xxx
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Not only has [petitioner] refused to negotiate with
[respondent], it has unduly withheld the money belonging
to the bargaining agent. Both these acts are illegal and
are tantamount to Unfair Labor Practice under Article
248 in relation to Article 252 of the Labor Code x x x.
ACCORDINGLY, all the foregoing premises being duly
considered, this Office hereby declares that [petitioner]
committed Unfair Labor Practice in violation of [Article 248
in relation to Article 252 of the Labor Code x x x.
[Petitioner] and its duly authorized officers and personnel
are therefore ordered to cease and desist from committing
said acts under pain of legal sanction.
[Petitioner] is therefore specifically directed to commence
collective bargaining negotiation with [respondents]
9
without further delay and to immediately turn over to the
Bañez group the unlawfully withheld union dues and
agency fees with legal interest corresponding to the period
of the unlawful withholding. All these specific directives
should be done within ten (10) days from receipt of this
Decision and with sufficient proof of compliance herewith
to be submitted immediately thereafter.41ςrνll
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In accordance with the terms of the aforementioned
Decision, petitioner turned over to respondent the
collected union dues and agency fees from employees
which were previously placed in escrow amounting
to P441,924.99.42ςrνll
Nonetheless, petitioner moved for the reconsideration of
the November 17, 2003 Decision of the Secretary of Labor
but it was denied in an Order dated January 20, 2004.
Aggrieved, petitioner filed a Petition for Certiorariunder
Rule 65 of the Rules of Court with the Court of Appeals.
Petitioner alleged therein that the Secretary of Labor
committed grave abuse of discretion by holding that it
(petitioner) was liable for unfair labor practice. Taking a
contrary stance to the findings of the Secretary of Labor,
petitioner stressed that it created the escrow accounts for
the benefit of the winning faction and undertook temporary
measures in light of the March 19, 2001 and July 6, 2001
Orders of the BLR. Thus, it should not be penalized for
taking a hands-off stance in the intra-union controversy
between the Aliazas and Bañez factions.
In a Decision dated March 4, 2005, the Court of Appeals
affirmed the November 17, 2003 Decision and January 20,
2004 Order of the Secretary of Labor and dismissed the
said petition. It
held:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
[Petitioner] finds reason to refuse to negotiate with
[respondent s incumbent officers] because of the alleged
"void in the union leadership" declared by the Regional
Director in his March 19, 2001 decision, [but] after the
election of the union officers held on August 28, 2003,
continued refusal by the University to negotiate amounts
to unfair labor practice. The non-proclamation of the
newly elected union officers cannot be used as an
excuse to fulfill the duty to bargain
collectively.43 (Emphasis supplied.)
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Petitioner moved for reconsideration but it was denied in a
Resolution dated August 5, 2005. The Court of Appeals
noted that petitioner s arguments were a mere "rehash of
the issues and discussions it presented in its petition and
in the relevant pleadings submitted x x x."44ςrνll
Meanwhile, the Court of Appeals dismissed CA-G.R. SP
No. 81649 (which assailed the July 28, 2003 Decision in
OS-AJ-0015-2003), in a Decision dated March 18,
2005.45 The said decision likewise found that petitioner
erred in unilaterally suspending negotiations with
respondent since the pendency of the intra-union dispute
was not a justifiable reason to do so.
10
Petitioner moved for reconsideration of the aforesaid
decision in CAG. R. SP No. 81649 but it was denied in a
Resolution dated June 7, 200546 due to lack of merit.
Aggrieved, petitioner elevated both the assailed decisions
and resolutions in this case and in CA-G.R. SP No. 81649,
which was docketed as G.R. No. 168477, to this Court.
Petitioner, in both instances, essentially argued that it did
not maliciously evade its duty to bargain. On the contrary,
it asserts that it merely relied in good faith on the March
19, 2001 Decision of the BLR that there was a void in
respondent s leadership.47ςrνll
This Court, through its Third Division, denied G.R. No.
168477 in a minute resolution dated July 20, 2005 due to
the petition s "failure x x x to show that a reversible error
had been committed by the appellate court."48 The motion
for reconsideration was denied with finality on September
21,
200549 and entry of judgment was made on November 3,
2005.50ςrνll
Meanwhile, respondent was ordered to file a comment
herein, and, subsequently, this petition was given due
course.
We note that both G.R. No. 168477 and this petition are
offshoots of petitioner s purported temporary measures to
preserve its neutrality with regard to the perceived void in
the union leadership. While these two cases arose out of
different notices to strike filed on April 3, 2003 and August
27, 2003, it is undeniable that the facts cited and the
arguments raised by petitioner are almost
identical. Inevitably, G.R. No. 168477 and this
petition seek only one relief, that is, to absolve
petitioner from respondent s charge of committing an
unfair labor practice, or specifically, a violation of
Article 248(g) in relation to Article 252 of the Labor
Code.
For this reason, we are constrained to apply the law of the
case doctrine in light of the finality of our July 20, 2005 and
September 21, 2005 resolutions in G.R. No. 168477. In
other words, our previous affirmance of the Court of
Appeals finding that petitioner erred in suspending
collective bargaining negotiations with the union and in
placing the union funds in escrow considering that the
intra-union dispute between the Aliazas and Bañez
factions was not a justification therefor is binding herein.
Moreover, we note that entry of judgment in G.R. No.
168477 was made on November 3, 2005, and that put to
an end to the litigation of said issues once and for
all.51ςrνll
The law of the case has been defined as the opinion
delivered on a former appeal. It means that whatever is
once irrevocably established as the controlling legal rule
or decision between the same parties in the same case
continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which
such decision was predicated continue to be the facts of
the case before the court.52ςrνll
In any event, upon our review of the records of this case,
we find that the Court of Appeals committed no reversible
11
error in its assailed Decision dated March 4, 2005 and
Resolution dated August 5, 2005. Petitioner s reliance on
the July 12, 2002 Decision of Labor Arbiter Pati, and the
NLRC s affirmance thereof, is misplaced. The unfair labor
practice complaint dismissed by Labor Arbiter Pati
questioned petitioner s actions immediately after the
March 19, 2001 Decision of BLR Regional Director
Maraan, finding that "the reason for the hold-over [of the
previously elected union officers] is already extinguished."
The present controversy involves petitioner s actions
subsequent to (1) the clarification of said March 19, 2001
Maraan Decision by BLR Director Cacdac who opined in a
May 16, 2003 memorandum that the then incumbent union
officers (i.e., the Bañez faction) continued to hold office
until their successors have been elected and qualified, and
(2) the July 28, 2003 Decision of the Secretary of Labor in
OS-AJ-0015-2003 ruling that the very same intra-union
dispute (subject of several notices of strike) is insufficient
ground for the petitioner to suspend CBA negotiations with
respondent union. We take notice, too, that the aforesaid
Decision of Labor Arbiter Pati has since been set aside by
the Court of Appeals and such reversal was upheld by this
Court s Second Division in its Decision dated April 7, 2009
in G.R. No. 177283, wherein petitioner was found liable for
unfair labor practice.53ςrνll
Neither can petitioner seek refuge in its defense that as
early as November 2003 it had already released the
escrowed union dues to respondent and normalized
relations with the latter. The fact remains that from its
receipt of the July 28, 2003 Decision of the Secretary of
Labor in OS-AJ-0015-2003 until its receipt of the
November 17, 2003 Decision of the Secretary of Labor in
OS-AJ-0033-2003, petitioner failed in its duty to
collectively bargain with respondent union without valid
reason. At most, such subsequent acts of compliance with
the issuances in OS-AJ-0015-2003 and OS-AJ-0033-2003
merely rendered moot and academic the Secretary of
Labor s directives for petitioner to commence collective
bargaining negotiations within the period provided.
To conclude, we hold that the findings of fact of the
Secretary of Labor and the Court of Appeals, as well as
the conclusions derived therefrom, were amply supported
by evidence on record. Thus, in line with jurisprudence that
such findings are binding on this Court, we see no reason
to disturb the
same. ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
54
WHEREFORE, the petition is DENIED.
chanrobles virtual law library
SO ORDERED.
SAN MIGUEL FOODS, INCORPORATED, Petitioner,
vs.
SAN MIGUEL CORPORATION SUPERVISORS and
EXEMPT UNION, Respondent.
DECISION
PERALTA, J.:
12
The issues in the present case, relating to the inclusion of
employees in supervisor levels 3 and 4 and the exempt
employees in the proposed bargaining unit, thereby
allowing their participation in the certification election; the
application of the "community or mutuality of interests"
test; and the determination of the employees who belong
to the category of confidential employees, are not novel.
In G.R. No. 110399, entitled San Miguel Corporation
Supervisors and Exempt Union v. Laguesma,1 the Court
held that even if they handle confidential data regarding
technical and internal business operations, supervisory
employees 3 and 4 and the exempt employees of
petitioner San Miguel Foods, Inc. (SMFI) are not to be
considered confidential employees, because the same do
not pertain to labor relations, particularly, negotiation and
settlement of grievances. Consequently, they were
allowed to form an appropriate bargaining unit for the
purpose of collective bargaining. The Court also declared
that the employees belonging to the three different plants
of San Miguel Corporation Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis, having
"community or mutuality of interests," constitute a single
bargaining unit. They perform work of the same nature,
receive the same wages and compensation, and most
importantly, share a common stake in concerted activities.
It was immaterial that the three plants have different
locations as they did not impede the operations of a single
bargaining representative.2
Pursuant to the Court's decision in G.R. No. 110399, the
Department of Labor and Employment – National Capital
Region (DOLE-NCR) conducted pre-election
conferences.3 However, there was a discrepancy in the list argued that certain employees should not be allowed to
of eligible voters, i.e., petitioner submitted a list of 23 vote as they are: (1) confidential employees; (2)
employees for the San Fernando plant and 33 for the employees assigned to the live chicken operations, which
Cabuyao plant, while respondent listed 60 and 82, are not covered by the bargaining unit; (3) employees
respectively.4 whose job grade is level 4, but are performing managerial
work and scheduled to be promoted; (4) employees who
On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan belong to the Barrio Ugong plant; (5) non-SMFI
issued an Order5 directing Election Officer Cynthia employees; and (6) employees who are members of other
Tolentino to proceed with the conduct of certification unions.
election in accordance with Section 2, Rule XII of
Department Order No. 9. On October 21, 1998, the Med-Arbiter issued an Order
directing respondent to submit proof showing that the
On September 30, 1998, a certification election was employees in the submitted list are covered by the original
conducted and it yielded the following results,6 thus: petition for certification election and belong to the
bargaining unit it seeks to represent and, likewise,
Cabuyao San Fernando Total directing petitioner to substantiate the allegations
Plant Plant contained in its Omnibus Objections and Challenge to
Voters.8
Yes 23 23 46
No 0 0 0 In compliance thereto, respondent averred that (1) the
bargaining unit contemplated in the original petition is the
Spoiled 2 0 2 Poultry Division of San Miguel Corporation, now known as
San Miguel Foods, Inc.; (2) it covered the operations in
Segregated 41 35 76
Calamba, Laguna, Cavite, and Batangas and its home
Total Votes Cast 66 58 124 base is either in Cabuyao, Laguna or San Fernando,
Pampanga; and (3) it submitted individual and separate
On the date of the election, September 30, 1998, petitioner declarations of the employees whose votes were
filed the Omnibus Objections and Challenge to challenged in the election.9
Voters,7 questioning the eligibility to vote by some of its
employees on the grounds that some employees do not Adding the results to the number of votes canvassed
belong to the bargaining unit which respondent seeks to during the September 30, 1998 certification election, the
represent or that there is no existence of employer- final tally showed that: number of eligible voters – 149;
employee relationship with petitioner. Specifically, it number of valid votes cast – 121; number of spoiled ballots

13
- 3; total number of votes cast – 124, with 118 (i.e., 46 +
72 = 118 ) "Yes" votes and 3 "No" votes.10
The Med-Arbiter issued the Resolution11 dated February
17, 1999 directing the parties to appear before the Election
Officer of the Labor Relations Division on March 9, 1999,
10:00 a.m., for the opening of the segregated ballots.
Thereafter, on April 12, 1999, the segregated ballots were
opened, showing that out of the 76 segregated
votes, 72 were cast for "Yes" and 3 for "No," with one
"spoiled" ballot.12
Based on the results, the Med-Arbiter issued the
Order13 dated April 13, 1999, stating that since the "Yes"
vote received 97% of the valid votes cast, respondent is
certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's
Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis.
On appeal, the then Acting DOLE Undersecretary, in the
Resolution14 dated July 30, 1999, in OS-A-2-70-91 (NCR-
OD-M-9010-017), affirmed the Order dated April 13, 1999,
with modification that George C. Matias, Alma Maria M.
Lozano, Joannabel T. Delos Reyes, and Marilyn G.
Pajaron be excluded from the bargaining unit which
respondent seeks to represent. She opined that the
challenged voters should be excluded from the bargaining
unit, because Matias and Lozano are members of
Magnolia Poultry Processing Plants Monthly Employees
Union, while Delos Reyes and Pajaron are employees of
14
San Miguel Corporation, which is a separate and distinct
entity from petitioner.
Petitioner’s Partial Motion for Reconsideration15 dated
August 14, 1999 was denied by the then Acting DOLE
Undersecretary in the Order16 dated August 27, 1999.
In the Decision17 dated April 28, 2000, in CA-G.R. SP No.
55510, entitled San Miguel Foods, Inc. v. The Honorable
Office of the Secretary of Labor, Bureau of Labor
Relations, and San Miguel Corporation Supervisors and
Exempt Union, the Court of Appeals (CA) affirmed with
modification the Resolution dated July 30, 1999 of the
DOLE Undersecretary, stating that those holding the
positions of Human Resource Assistant and Personnel
Assistant are excluded from the bargaining unit.
Petitioner’s Motion for Partial Reconsideration18 dated
May 23, 2000 was denied by the CA in the
Resolution19 dated November 28, 2000.
Hence, petitioner filed this present petition raising the
following issues:
I.
WHETHER THE COURT OF APPEALS
DEPARTED FROM JURISPRUDENCE WHEN IT
EXPANDED THE SCOPE OF THE BARGAINING
UNIT DEFINED BY THIS COURT'S RULING IN
G.R. NO. 110399.
II.
 WHETHER THE COURT OF APPEALS
DEPARTED FROM JURISPRUDENCE - of certain employees from the bargaining unit was a
SPECIFICALLY, THIS COURT'S DEFINITION OF
A "CONFIDENTIAL EMPLOYEE" - WHEN IT
RULED FOR THE INCLUSION OF THE
"PAYROLL MASTER" POSITION IN THE
BARGAINING UNIT.
III.
WHETHER THIS PETITION IS A "REHASH" OR A
"RESURRECTION" OF THE ISSUES RAISED IN
G.R. NO. 110399, AS ARGUED BY PRIVATE
RESPONDENT.
Petitioner contends that with the Court's ruling in G.R. No.
11039920 identifying the specific employees who can
participate in the certification election, i.e., the supervisors
(levels 1 to 4) and exempt employees of San Miguel
Poultry Products Plants in Cabuyao, San Fernando, and
Otis, the CA erred in expanding the scope of the
bargaining unit so as to include employees who do not
belong to or who are not based in its Cabuyao or San
Fernando plants. It also alleges that the employees of the
Cabuyao, San Fernando, and Otis plants of petitioner’s
predecessor, San Miguel Corporation, as stated in G.R.
No. 110399, were engaged in "dressed" chicken
processing, i.e., handling and packaging of chicken meat,
while the new bargaining unit, as defined by the CA in the
present case, includes employees engaged in "live"
chicken operations, i.e., those who breed chicks and grow
chickens.
15
Respondent counters that petitioner’s proposed exclusion
rehashed issue which was already settled in G.R. No.
110399. It maintains that the issue of union membership
coverage should no longer be raised as a certification
election already took place on September 30, 1998,
wherein respondent won with 97% votes.
Petitioner’s contentions are erroneous. In G.R. No.
110399, the Court explained that the employees of San
Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis constitute a single
bargaining unit, which is not contrary to the one-company,
one-union policy. An appropriate bargaining unit is defined
as a group of employees of a given employer, comprised
of all or less than all of the entire body of employees, which
the collective interest of all the employees, consistent with
equity to the employer, indicate to be best suited to serve
the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.21
In National Association of Free Trade Unions v. Mainit
Lumber Development Company Workers Union – United
Lumber and General Workers of the Phils,22 the Court,
taking into account the "community or mutuality of
interests" test, ordered the formation of a single bargaining
unit consisting of the Sawmill Division in Butuan City and
the Logging Division in Zapanta Valley, Kitcharao, Agusan
[Del] Norte of the Mainit Lumber Development Company.
It held that while the existence of a bargaining history is a
factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or
conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interest. This is so
because the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the
exercise of their collective bargaining rights.23 Certainly,
there is a mutuality of interest among the employees of the
Sawmill Division and the Logging Division. Their functions
mesh with one another. One group needs the other in the
same way that the company needs them both. There may
be differences as to the nature of their individual
assignments, but the distinctions are not enough to
warrant the formation of a separate bargaining unit.24
Thus, applying the ruling to the present case, the Court
affirms the finding of the CA that there should be only one
bargaining unit for
the employees in Cabuyao, San Fernando, and Otis25 of
Magnolia Poultry Products Plant involved in "dressed"
chicken processing and Magnolia Poultry Farms engaged
in "live" chicken operations. Certain factors, such as
specific line of work, working conditions, location of work,
mode of compensation, and other relevant conditions do
not affect or impede their commonality of interest.
Although they seem separate and distinct from each other,
the specific tasks of each division are actually interrelated
and there exists mutuality of interests which warrants the
formation of a single bargaining unit.
Petitioner asserts that the CA erred in not excluding the
position of Payroll Master in the definition of a confidential
employee and, thus, prays that the said position and all
16
other positions with access to salary and compensation
data be excluded from the bargaining unit.
This argument must fail. Confidential employees are
defined as those who (1) assist or act in a confidential
capacity, in regard (2) to persons who formulate,
determine, and effectuate management policies in the field
of labor relations.26 The two criteria are cumulative, and
both must be met if an employee is to be considered a
confidential employee - that is, the confidential relationship
must exist between the employee and his supervisor, and
the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining
units of employees who, in the normal course of their
duties, become aware of management policies relating to
labor relations is a principal objective sought to be
accomplished by the "confidential employee rule."27
A confidential employee is one entrusted with confidence
on delicate, or with the custody, handling or care and
protection of the employer’s property.28 Confidential
employees, such as accounting personnel, should be
excluded from the bargaining unit, as their access to
confidential information may become the source of undue
advantage.29 However, such fact does not apply to the
position of Payroll Master and the whole gamut of
employees who, as perceived by petitioner, has access to
salary and compensation data. The CA correctly held that
the position of Payroll Master does not involve dealing with
confidential labor relations information in the course of the
performance of his functions. Since the nature of his work
does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be
excluded from the subject bargaining unit.
Corollarily, although Article 24530 of the Labor Code limits
the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has
extended this prohibition to
confidential employees or those who by reason of their
positions or nature of work are required to assist or act in
a fiduciary manner to managerial employees and, hence,
are likewise privy to sensitive and highly confidential
records.31 Confidential employees are thus excluded from
the rank-and-file bargaining unit. The rationale for their
separate category and disqualification to join any labor
organization is similar to the inhibition for managerial
employees, because if allowed to be affiliated with a union,
the latter might not be assured of their loyalty in view of
evident conflict of interests and the union can also become
company-denominated with the presence of managerial
employees in the union membership.32 Having access to
confidential information, confidential employees may also
become the source of undue advantage. Said employees
may act as a spy or spies of either party to a collective
bargaining agreement.331avvphi1
In this regard, the CA correctly ruled that the positions of
Human Resource Assistant and Personnel Assistant
belong to the category of confidential employees and,
hence, are excluded from the bargaining unit, considering
their respective positions and job descriptions. As Human
Resource Assistant,34 the scope of one’s work necessarily
involves labor relations, recruitment and selection of
17
employees, access to employees' personal files and
compensation package, and human resource
management. As regards a Personnel Assistant, 35 one's
work includes the recording of minutes for management
during collective bargaining negotiations, assistance to
management during grievance meetings and
administrative investigations, and securing legal advice for
labor issues from the petitioner’s team of lawyers, and
implementation of company programs. Therefore, in the
discharge of their functions, both gain access to vital labor
relations information which outrightly disqualifies them
from union membership.
The proceedings for certification election are quasi-judicial
in nature and, therefore, decisions rendered in such
proceedings can attain finality.36 Applying the doctrine of
res judicata, the issue in the
present case pertaining to the coverage of the employees
who would constitute the bargaining unit is now a foregone
conclusion.
It bears stressing that a certification election is the sole
concern of the workers; hence, an employer lacks the
personality to dispute the same. The general rule is that
an employer has no standing to question the process of
certification election, since this is the sole concern of the
workers.37 Law and policy demand that employers take a
strict, hands-off stance in certification elections. The
bargaining representative of employees should be chosen
free from any extraneous influence of management. A
labor bargaining representative, to be effective, must owe
its loyalty to the employees alone and to no other. 38 The
only exception is where the employer itself has to file the
petition pursuant to Article 25839 of the Labor Code
because of a request to bargain collectively.40
With the foregoing disquisition, the Court writes finis to the
issues raised so as to forestall future suits of similar
nature.
WHEREFORE, the petition is DENIED. The Decision
dated April 28, 2000 and Resolution dated November 28,
2000 of the Court of Appeals, in CA-G.R. SP No. 55510,
which affirmed with modification the Resolutions dated
July 30, 1999 and August 27, 1999 of the Secretary of
Labor, are AFFIRMED.
SO ORDERED.
• G.R. No. 179146, July 23, 2013
HOLY CHILD CATHOLIC SCHOOL, Petitioner, v. HON.
PATRICIA STO. TOMAS, IN HER OFFICIAL CAPACITY
AS SECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT, AND PINAG-ISANG TINIG AT
LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC
SCHOOL TEACHERS AND EMPLOYEES LABOR
UNION (HCCS-TELU-PIGLAS), Respondents.
DECISION
PERALTA, J.:
18
Assailed in this petition for review on certiorari under Rule
45 of the Rules of Civil Procedure are the April 18, 2007
Decision1 and July 31, 2007 Resolution2 of the Court of
Appeals in CA-G.R. SP No. 76175, which affirmed the
December 27, 2002 Decision3 and February 13, 2003
Resolution4 of the Secretary of the Department of Labor
and Employment (SOLE) that set aside the August 10,
2002 Decision5 of the Med-Arbiter denying private
respondent’s petition for certification election.
The factual antecedents are as
follows:cralavvonlinelawlibrary
On May 31, 2002, a petition for certification election was
filed by private respondent Pinag-Isang Tinig at Lakas ng
Anakpawis – Holy Child Catholic School Teachers and
Employees Labor Union (HCCS-TELU-PIGLAS), alleging
that: PIGLAS is a legitimate labor organization duly
registered with the Department of Labor and Employment
(DOLE) representing HCCS-TELU-PIGLAS; HCCS is a
private educational institution duly registered and
operating under Philippine laws; there are approximately
one hundred twenty (120) teachers and employees
comprising the proposed appropriate bargaining unit; and
HCCS is unorganized, there is no collective bargaining
agreement or a duly certified bargaining agent or a labor
organization certified as the sole and exclusive bargaining
agent of the proposed bargaining unit within one year prior
to the filing of the petition.6 Among the documents
attached to the petition were the certificate of affiliation
with Pinag-Isang Tinig at Lakas ng Anakpawis
Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-
KAMAO) issued by the Bureau of Labor Relations (BLR),
charter certificate issued by PIGLAS-KAMAO, and
certificate of registration of HCCS-TELU as a legitimate
labor organization issued by the DOLE.7
In its Comment8 and Position Paper,9 petitioner HCCS
consistently noted that it is a parochial school with a total
of 156 employees as of June 28, 2002, broken down as
follows: ninety-eight (98) teaching personnel, twenty-five
(25) non-teaching academic employees, and thirty-three
(33) non-teaching non-academic workers. It averred that
of the employees who signed to support the petition,
fourteen (14) already resigned and six (6) signed twice.
Petitioner raised that members of private respondent do
not belong to the same class; it is not only a mixture of
managerial, supervisory, and rank-and-file employees –
as three (3) are vice-principals, one (1) is a department
head/supervisor, and eleven (11) are coordinators – but
also a combination of teaching and non-teaching
personnel – as twenty-seven (27) are non-teaching
personnel. It insisted that, for not being in accord with
Article 24510 of the Labor Code, private respondent is an
illegitimate labor organization lacking in personality to file
a petition for certification election, as held in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union;11 and an inappropriate
bargaining unit for want of community or mutuality of
interest, as ruled in Dunlop Slazenger (Phils.), Inc. v.
Secretary of Labor and Employment12 and De La Salle
University Medical Center and College of Medicine v.
Laguesma.13
Private respondent, however, countered that petitioner
failed to substantiate its claim that some of the employees
19
included in the petition for certification election holds
managerial and supervisory positions.14 Assuming it to be
true, it argued that Section 11 (II),15 Rule XI of DOLE
Department Order (D.O.) No. 9, Series of 1997, provided
for specific instances in which a petition filed by a
legitimate organization shall be dismissed by the Med-
Arbiter and that “mixture of employees” is not one of those
enumerated. Private respondent pointed out that
questions pertaining to qualifications of employees may be
threshed out in the inclusion-exclusion proceedings prior
to the conduct of the certification election, pursuant to
Section 2,16 Rule XII of D.O. No. 9. Lastly, similar to the
ruling in In Re: Globe Machine and Stamping
Company,17 it contended that the will of petitioner’s
employees should be respected as they had manifested
their desire to be represented by only one bargaining unit.
To back up the formation of a single employer unit, private
respondent asserted that even if the teachers may receive
additional pay for an advisory class and for holding
additional loads, petitioner’s academic and non-academic
personnel have similar working conditions. It cited Laguna
College v. Court of Industrial Relations,18 as well as the
case of a union in West Negros College in Bacolod City,
which allegedly represented both academic and non-
academic employees.
On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan
denied the petition for certification election on the ground
that the unit which private respondent sought to represent
is inappropriate. She resolved:cralavvonlinelawlibrary
A certification election proceeding directly involves
two (2) issues namely: (a) the proper composition and
constituency of the bargaining unit; and (b) the validity of
majority representation claims. It is therefore incumbent
upon the Med-Arbiter to rule on the appropriateness of the
bargaining unit once its composition and constituency is
questioned.
Section 1 (q), Rule I, Book V of the Omnibus Rules
defines a “bargaining unit” as a group of employees
sharing mutual interests within a given employer unit
comprised of all or less than all of the entire body of
employees in the employer unit or any specific
occupational or geographical grouping within such
employer unit. This definition has provided
the “community or mutuality of interest” test as the
standard in determining the constituency of a collective
bargaining unit. This is so because the basic test of an
asserted bargaining unit’s acceptability is whether or not it
is fundamentally the combination which will best assure to
all employees the exercise of their collective bargaining
rights. The application of this test may either result in the
formation of an employer unit or in the fragmentation of an
employer unit.
In the case at bar, the employees of [petitioner], may, as
already suggested, quite easily be categorized
into (2) general classes[:] one, the teaching staff;
and two, the non-teaching-staff. Not much reflection is
needed to perceive that the community or mutuality of
interest is wanting between the teaching and the non-
teaching staff. It would seem obvious that the teaching
staff would find very little in common with the non-teaching
staff as regards responsibilities and function, working
conditions, compensation rates, social life and interests,
skills and intellectual pursuits, etc. These are plain and
20
patent realities which cannot be ignored. These dictate
the separation of these two categories of employees for
purposes of collective bargaining. (University of the
Philippines vs. Ferrer-Calleja, 211 SCRA 451)19
Private respondent appealed before the SOLE, who, on
December 27, 2002, ruled against the dismissal of the
petition and directed the conduct of two separate
certification elections for the teaching and the non-
teaching personnel, thus:cralavvonlinelawlibrary
We agree with the Med-Arbiter that there are differences
in the nature of work, hours and conditions of work and
salary determination between the teaching and non-
teaching personnel of [petitioner]. These differences were
pointed out by [petitioner] in its position paper. We do not,
however, agree with the Med-Arbiter that these differences
are substantial enough to warrant the dismissal of the
petition. First, as pointed out by [private respondent],
“inappropriateness of the bargaining unit sought to be
represented is not a ground for the dismissal of the
petition[.”] In fact, in the cited case of University of the
Philippines v. Ferrer-Calleja, supra, the Supreme Court did
not order the dismissal of the petition but ordered the
conduct of a certification election, limiting the same among
the non-academic personnel of the University of the
Philippines.
It will be recalled that in the U.P. case, there were two
contending unions, the Organization of Non-Academic
Personnel of U.P. (ONAPUP) and All U.P. Workers Union
composed of both academic and non-academic personnel
of U.P. ONAPUP sought the conduct of certification
election among the rank-and-file non-academic personnel
only while the all U.P. Workers Union sought the conduct
of certification election among all of U.P.’s rank-and-file
employees covering academic and non-academic
personnel. While the Supreme Court ordered a separate
bargaining unit for the U.P. academic personnel, the
Court, however, did not order them to organize a separate
labor organization among themselves. The All U.P.
Workers Union was not directed to divest itself of its
academic personnel members and in fact, we take
administrative notice that the All U.P. Workers Union
continue to exist with a combined membership of U.P.
academic and non-academic personnel although separate
bargaining agreements is sought for the two bargaining
units. Corollary, [private respondent] can continue to exist
as a legitimate labor organization with the combined
teaching and non-teaching personnel in its membership
and representing both classes of employees in separate
bargaining negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10
August 2002 is hereby REVERSED and SET ASIDE. In
lieu thereof, a new order is hereby issued directing the
conduct of two certification elections, one among the non-
teaching personnel of Holy Child Catholic School, and the
other, among the teaching personnel of the same school,
subject to the usual pre-election conferences and
inclusion-exclusion proceedings, with the following
choices:cralavvonlinelawlibrary
A. Certification Election Among [Petitioner]’s Teaching
Personnel:cralavvonlinelawlibrary
1. Holy Child Catholic School Teachers and
Employees Labor Union; and
21
2. No Union.
B. Certification Election Among [Petitioner]’s Non-
Teaching Personnel:cralavvonlinelawlibrary
1. Holy Child Catholic School Teachers and
Employees Labor Union; and
2. No Union.
[Petitioner] is hereby directed to submit to the Regional
Office of origin within ten (10) days from receipt of this
Decision, a certified separate list of its teaching and non-
teaching personnel or when necessary a separate copy of
their payroll for the last three (3) months prior to the
issuance of this Decision.20
Petitioner filed a motion for reconsideration21 which, per
Resolution dated February 13, 2003, was denied.
Consequently, petitioner filed before the CA a Petition
for Certiorari with Prayer for Temporary Restraining Order
and Preliminary Injunction.22 The CA resolved to defer
action on the prayer for TRO pending the filing of private
respondent’s Comment.23 Later, private respondent and
petitioner filed their Comment24 and Reply,25 respectively.
On July 23, 2003, petitioner filed a motion for immediate
issuance of a TRO, alleging that Hon. Helen F. Dacanay
of the Industrial Relations Division of the DOLE was set to
implement the SOLE Decision when it received a
summons and was directed to submit a certified list of
teaching and non-teaching personnel for the last three
months prior to the issuance of the assailed
Decision.26 Acting thereon, on August 5, 2003, the CA
issued the TRO and ordered private respondent to show
cause why the writ of preliminary injunction should not be
granted.27 Subsequently, a Manifestation and
Motion28 was filed by private respondent, stating that it
repleads by reference the arguments raised in its
Comment and that it prays for the immediate lifting of the
TRO and the denial of the preliminary injunction. The CA,
however, denied the manifestation and motion on
November 21, 200329 and, upon motion of
30
petitioner, granted the preliminary injunction on April 21,
2005.31 Thereafter, both parties filed their respective
Memorandum.32
On April 18, 2007, the CA eventually dismissed the
petition. As to the purported commingling of managerial,
supervisory, and rank-and-file employees in private
respondent’s membership, it held that the Toyota ruling is
inapplicable because the vice-principals, department
head, and coordinators are neither supervisory nor
managerial employees. It
reasoned:cralavvonlinelawlibrary
x x x While it may be true that they wield power over other
subordinate employees of the petitioner, it must be
stressed[,] however[,] that their functions are not confined
with policy-determining such as hiring, firing, and
disciplining of employees, salaries, teaching/working
hours, other monetary and non-monetary benefits, and
other terms and conditions of employment. Further, while
they may formulate policies or guidelines, nonetheless,
such is merely recommendatory in nature, and still subject
to review and evaluation by the higher executives, i.e., the
principals or executive officers of the petitioner. It cannot
22
also be denied that in institutions like the petitioner,
company policies have already been pre-formulated by the
higher executives and all that the mentioned employees
have to do is carry out these company policies and
standards. Such being the case, it is crystal clear that there
is no improper [commingling] of members in the private
respondent union as to preclude its petition for certification
of (sic) election.33
Anent the alleged mixture of teaching and non-teaching
personnel, the CA agreed with petitioner that the nature of
the former’s work does not coincide with that of the latter.
Nevertheless, it ruled that the SOLE did not commit grave
abuse of discretion in not dismissing the petition for
certification election, since it directed the conduct of two
separate certification elections based on Our ruling
in University of the Philippines v. Ferrer-Calleja.34
A motion for reconsideration35 was filed by petitioner, but
the CA denied the same;36 hence, this petition assigning
the alleged errors as follows:cralavvonlinelawlibrary
I.
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT THE RULING IN THE CASE OF
TOYOTA MOTOR PHILIPPINES CORPORATION VS.
TOYOTA MOTOR PHILIPPINES CORPORATION
LABOR UNION (268 SCRA 573) DOES NOT APPLY IN
THE CASE AT BAR DESPITE THE [COMMINGLING] OF
BOTH SUPERVISORY OR MANAGERIAL AND RANK-
AND-FILE EMPLOYEES IN THE RESPONDENT
UNION;chanroblesvirtualawlibrary
II
THE HONORABLE COURT OF APPEALS ERRED IN ITS
CONFLICTING RULING ALLOWING THE CONDUCT OF
CERTIFICATION ELECTION BY UPHOLDING THAT
THE RESPONDENT UNION REPRESENTED A
BARGAINING UNIT DESPITE ITS OWN FINDINGS
THAT THERE IS NO MUTUALITY OF INTEREST
BETWEEN THE MEMBERS OF RESPONDENT UNION
APPLYING THE TEST LAID DOWN IN THE CASE OF
UNIVERSITY OF THE PHILIPPINES VS. FERRER-
CALLEJA (211 SCRA 451).37
We deny.
Petitioner claims that the CA contradicted the very
definition of managerial and supervisory employees under
existing law and jurisprudence when it did not classify the
vice-principals, department head, and coordinators as
managerial or supervisory employees merely because the
policies and guidelines they formulate are still subject to
the review and evaluation of the principal or executive
officers of petitioner. It points out that the duties of the vice-
principals, department head, and coordinators include the
evaluation and assessment of the effectiveness and
capability of the teachers under them; that such evaluation
and assessment is independently made without the
participation of the higher Administration of petitioner; that
the fact that their recommendation undergoes the approval
of the higher Administration does not take away the
independent nature of their judgment; and that it would be
difficult for the vice-principals, department head, and
coordinators to objectively assess and evaluate the
23
performances of teachers under them if they would be
allowed to be members of the same labor union.
On the other hand, aside from reiterating its previous
submissions, private respondent cites Sections 9 and
1238 of Republic Act (R.A.) No. 9481 to buttress its
contention that petitioner has no standing to oppose the
petition for certification election. On the basis of the
statutory provisions, it reasons that an employer is not a
party-in-interest in a certification election; thus, petitioner
does not have the requisite right to protect even by way of
restraining order or injunction.
First off, We cannot agree with private respondent’s
invocation of R.A. No. 9481. Said law took effect only on
June 14, 2007; hence, its applicability is limited to labor
representation cases filed on or after said date.39 Instead,
the law and rules in force at the time private respondent
filed its petition for certification election on May 31, 2002
are R.A. No. 6715, which amended Book V of Presidential
Decree (P.D.) No. 442 (the Labor Code), as amended, and
the Rules and Regulations Implementing R.A. No. 6715,
as amended by D.O. No. 9, which was dated May 1, 1997
but took effect on June 21, 1997.40
However, note must be taken that even without the
express provision of Section 12 of RA No. 9481, the
“Bystander Rule” is already well entrenched in this
jurisdiction. It has been consistently held in a number of
cases that a certification election is the sole concern of the
workers, except when the employer itself has to file the
petition pursuant to Article 259 of the Labor Code, as
amended, but even after such filing its role in the
certification process ceases and becomes merely a
bystander.41 The employer clearly lacks the personality to
dispute the election and has no right to interfere at all
therein.42 This is so since any uncalled-for concern on the
part of the employer may give rise to the suspicion that it
is batting for a company union.43 Indeed, the demand of
the law and policy for an employer to take a strict, hands-
off stance in certification elections is based on the
rationale that the employees’ bargaining representative
should be chosen free from any extraneous influence of
the management; that, to be effective, the bargaining
representative must owe its loyalty to the employees alone
and to no other.44
Now, going back to petitioner’s contention, the issue of
whether a petition for certification election is dismissible on
the ground that the labor organization’s membership
allegedly consists of supervisory and rank-and-file
employees is actually not a novel one. In the 2008 case
of Republic v. Kawashima Textile Mfg., Philippines,
Inc.,45 wherein the employer-company moved to dismiss
the petition for certification election on the ground inter
alia that the union membership is a mixture of rank-and-
file and supervisory employees, this Court had
conscientiously discussed the applicability
of Toyota and Dunlop in the context of R.A. No. 6715 and
D.O. No. 9, viz.:cralavvonlinelawlibrary
It was in R.A. No. 875, under Section 3, that such
questioned mingling was first prohibited, to
wit:cralavvonlinelawlibrary
Sec. 3. Employees' right to self-organization. - Employees
shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the
24
purpose of collective bargaining through representatives
of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual
aid or protection. Individuals employed as supervisors
shall not be eligible for membership in a labor
organization of employees under their supervision but
may form separate organizations of their
own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the
questioned mingling can affect the legitimacy of the labor
organization. Under Section 15, the only instance when a
labor organization loses its legitimacy is when it violates its
duty to bargain collectively; but there is no word on
whether such mingling would also result in loss of
legitimacy. Thus, when the issue of whether the
membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came
before the Court En Banc in Lopez v. Chronicle
Publication Employees Association, the majority
pronounced:cralavvonlinelawlibrary
It may be observed that nothing is said of the effect of such
ineligibility upon the union itself or on the status of the
other qualified members thereof should such prohibition
be disregarded. Considering that the law is specific where
it intends to divest a legitimate labor union of any of the
rights and privileges granted to it by law, the absence of
any provision on the effect of the disqualification of
one of its organizers upon the legality of the union,
may be construed to confine the effect of such
ineligibility only upon the membership of the
supervisor. In other words, the invalidity of
membership of one of the organizers does not make
the union illegal, where the requirements of the law for
the organization thereof are, nevertheless, satisfied
and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without
reproducing Sec. 3 of R.A. No. 875. The provision in the
Labor Code closest to Sec. 3 is Article 290, which is
deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one
labor organization. Even the Omnibus Rules Implementing
Book V of the Labor Code (Omnibus Rules) merely
provides in Section 11, Rule II,
thus:cralavvonlinelawlibrary
Sec. 11. Supervisory unions and unions of security guards
to cease operation. - All existing supervisory unions and
unions of security guards shall, upon the effectivity of the
Code, cease to operate as such and their registration
certificates shall be deemed automatically cancelled.
However, existing collective agreements with such unions,
the life of which extends beyond the date of effectivity of
the Code shall be respected until their expiry date insofar
as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within
the definition of managerial employees shall become
eligible to join or assist the rank and file organization.
The determination of who are managerial employees and
who are not shall be the subject of negotiation between
representatives of supervisory union and the employer. If
no agreement s reached between the parties, either or
both of them may bring the issue to the nearest Regional
Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No.
875 prompted the Court to declare in Bulletin v.
Sanchez that supervisory employees who do not fall under
25
the category of managerial employees may join or assist
in the formation of a labor organization for rank-and-file
employees, but they may not form their own labor
organization.
While amending certain provisions of Book V of the Labor
Code, E.O. No. 111 and its implementing rules continued
to recognize the right of supervisory employees, who do
not fall under the category of managerial employees, to
join a rank- and-file labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition
against the questioned mingling in one labor
organization, viz.:cralavvonlinelawlibrary
Sec. 18. Article 245 of the same Code, as amended, is
hereby further amended to read as
follows:cralavvonlinelawlibrary
Art. 245. Ineligibility of managerial employees to join any
labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees
shall not be eligible for membership in a labor
organization of the rank-and-file employees but may
join, assist or form separate labor organizations of
their own (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715
omitted specifying the exact effect any violation of the
prohibition 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):cralavvonlinelawlibrary
Sec. 1. Who may join unions. - x x x 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 x x.
(Emphasis supplied)
and Rule V (Representation Cases and Internal-Union
Conflicts) of the Omnibus
Rules, viz.;chanroblesvirtualawlibrary
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:cralavvonlinelawlibrary
x x x x
(c) description of the bargaining unit which shall be
the employer unit unless circumstances otherwise
require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall
26
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:cralavvonlinelawlibrary
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 x x x
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:cralavvonlinelawlibrary
Rule
Certification Elections
x x x x
Sec. 4. Forms and contents of petition. - The petition shall
be in writing and under oath and shall contain, among
others, the following: x x x (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:cralavvonlinelawlibrary
Sec. 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.
XI Then came Tagaytay Highlands Int'l. Golf Club, Inc. v.
Tagaytay Highlands Employees Union-PTGWO in which
the core issue was whether mingling affects the legitimacy
27
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 Dunlop and 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 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
28
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.46
When a similar issue confronted this Court close to three
years later, the above ruling was substantially quoted
in Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment
and Reforms (SMCC-Super) v. Charter Chemical and
Coating Corporation.47 In unequivocal terms, We
reiterated that the alleged 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.48
Indeed, Toyota and Dunlop no longer hold true under the
law and rules governing the instant case. 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 and Regulations
Implementing R.A. No. 6715 (1989 Amended Omnibus
Rules) was applied. In contrast, D.O. No. 9 is applicable in
the petition for certification election of private respondent
as it was filed on May 31, 2002.

Following the doctrine laid down
in Kawashima and SMCC-Super, it must be stressed that
petitioner cannot collaterally attack the legitimacy of
private respondent by praying for the dismissal of the
petition for certification election:cralavvonlinelawlibrary
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.49
Further, the determination of whether union membership
comprises managerial and/or supervisory employees is a
factual issue that is best left for resolution in the inclusion-
exclusion proceedings, which has not yet happened in this
case so still premature to pass upon. We could only
emphasize the rule that factual findings of labor officials,
who are deemed to have acquired expertise in matters
29
within their jurisdiction, are generally accorded not only
with respect but even finality by the courts when supported
by substantial evidence.50 Also, the jurisdiction of this
Court in cases brought before it from the CA via Rule 45 is
generally limited to reviewing errors of law or jurisdiction.
The findings of fact of the CA are conclusive and binding.
Except in certain recognized instances,51 We do not
entertain factual issues as it is not Our function to analyze
or weigh evidence all over again; the evaluation of facts is
best left to the lower courts and administrative
agencies/quasi-judicial bodies which are better equipped
for the task.52
Turning now to the second and last issue, petitioner
argues that, in view of the improper mixture of teaching
and non-teaching personnel in private respondent due to
the absence of mutuality of interest among its members,
the petition for certification election should have been
dismissed on the ground that private respondent is not
qualified to file such petition for its failure to qualify as a
legitimate labor organization, the basic qualification of
which is the representation of an appropriate bargaining
unit.
We disagree.
The concepts of a union and of a legitimate labor
organization are different from, but related to, the concept
of a bargaining unit:cralavvonlinelawlibrary
Article 212(g) of the Labor Code defines a labor
organization 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." Upon compliance with all
the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the
roster of legitimate labor organizations. Any applicant
labor organization 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.53
In 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. 54 To
reiterate, private respondent, having been validly issued a
certificate of registration, should be considered as having
acquired juridical personality which may not be attacked
collaterally.
On the other hand, a bargaining unit has been defined as
a "group of employees of a given employer, comprised of
all or less than all of the entire body of employees, which
the collective interests of all the employees, consistent
with equity to the employer, indicated to be best suited to
serve reciprocal rights and duties of the parties under the
collective bargaining provisions of the law."55 In
determining the proper collective bargaining unit and what
unit would be appropriate to be the collective bargaining
agency, the Court, in the seminal case of Democratic
Labor Association v. Cebu Stevedoring Company,
Inc.,56 mentioned several factors that should be
30
considered, to wit: (1) will of employees (Globe Doctrine);
(2) affinity and unity of employees' interest, such as
substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as
temporary, seasonal and probationary employees. We
stressed, however, that the test of the grouping is
community or mutuality of interest, because “the basic test
of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best
assure to all employees the exercise of their collective
bargaining rights."57
As the SOLE correctly observed, petitioner failed to
comprehend the full import of Our ruling in U.P. It suffices
to quote with approval the apt disposition of the SOLE
when she denied petitioner’s motion for
reconsideration:cralavvonlinelawlibrary
[Petitioner] likewise claimed that we erred in interpreting
the decision of the Supreme Court in U.P. v. Ferrer-
Calleja, supra. According to [petitioner], the Supreme
Court stated that the non-academic rank-and-file
employees of the University of the Philippines shall
constitute a bargaining unit to the exclusion of the
academic employees of the institution. Hence, [petitioner]
argues, it sought the creation of separate bargaining units,
namely: (1) [petitioner]’s teaching personnel to the
exclusion of non-teaching personnel; and (2) [petitioner]’s
non-teaching personnel to the exclusion of teaching
personnel.
[Petitioner] appears to have confused the concepts of
membership in a bargaining unit and membership in a
union. In emphasizing the phrase “to the exclusion of
academic employees” stated in U.P. v. Ferrer-Calleja,
[petitioner] believed that the petitioning union could not
admit academic employees of the university to its
membership. But such was not the intention of the
Supreme Court.
A bargaining unit is a group of employees sought to be
represented by a petitioning union. Such employees need
not be members of a union seeking the conduct of a
certification election. A union certified as an exclusive
bargaining agent represents not only its members but also
other employees who are not union members. As pointed
out in our assailed Decision, there were two contending
unions in the U.P. case, namely[,] the Organization of Non-
Academic Personnel of U.P. (ONAPUP) and the All U.P.
Worker’s Union composed of both U.P. academic and
non-academic personnel. ONAPUP sought the conduct of
a certification election among the rank-and-file non-
academic personnel only, while the All U.P. Workers
Union intended to cover all U.P. rank-and-file employees,
involving both academic and non-academic personnel.
The Supreme Court ordered the “non-academic rank-and-
file employees of U.P. to constitute a bargaining unit to the
exclusion of the academic employees of the institution”,
but did not order them to organize a separate labor
organization. In the U.P. case, the Supreme Court did not
dismiss the petition and affirmed the order for the conduct
of a certification election among the non-academic
personnel of U.P., without prejudice to the right of the
academic personnel to constitute a separate bargaining
unit for themselves and for the All U.P. Workers Union to
31
institute a petition for certification election.
In the same manner, the teaching and non-teaching
personnel of [petitioner] school must form separate
bargaining units. Thus, the order for the conduct of two
separate certification elections, one involving teaching
personnel and the other involving non-teaching personnel.
It should be stressed that in the subject petition, [private
respondent] union sought the conduct of a certification
election among all the rank-and-file personnel of
[petitioner] school. Since the decision of the Supreme
Court in the U.P. case prohibits us from commingling
teaching and non-teaching personnel in one bargaining
unit, they have to be separated into two separate
bargaining units with two separate certification elections to
determine whether the employees in the respective
bargaining units desired to be represented by [private
respondent]. In the U.P. case, only one certification
election among the non-academic personnel was ordered,
because ONAPUP sought to represent that bargaining unit
only. No petition for certification election among the
academic personnel was instituted by All U.P. Workers
Union in the said case; thus, no certification election
pertaining to its intended bargaining unit was ordered by
the Court.58
Indeed, the purpose of a certification election is precisely
to ascertain the majority of the employees’ choice of an
appropriate bargaining unit – to be or not to be represented
by a labor organization and, if in the affirmative case, by
which one.59
At this point, it is not amiss to stress once more that, as a
rule, only questions of law may be raised in a Rule 45
petition. In Montoya v. Transmed Manila
Corporation,60 the Court discussed the particular
parameters of a Rule 45 appeal from the CA’s Rule 65
decision on a labor case, as
follows:cralavvonlinelawlibrary
x x x In a Rule 45 review, we consider the correctness of
the assailed CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions
of law raised against the assailed CA decision. In ruling
for legal correctness, we have to view the CA decision in
the same context that the petition for certiorari it ruled upon
was presented to it; we have to examine the CA
decision from the prism of whether it correctly
determined the presence or absence of grave abuse
of discretion in the NLRC decision before it, not on the
basis of whether the NLRC decision on the merits of
the case was correct. In other words, we have to be
keenly aware that the CA undertook a Rule 65 review, not
a review on appeal, of the NLRC decision challenged
before it. This is the approach that should be basic in a
Rule 45 review of a CA ruling in a labor case. In question
form, the question to ask is: Did the CA correctly
determine whether the NLRC committed grave abuse
of discretion in ruling on the case?61
Our review is, therefore, limited to the determination of
whether the CA correctly resolved the presence or
absence of grave abuse of discretion in the decision of the
SOLE, not on the basis of whether the latter’s decision on
the merits of the case was strictly correct. Whether the CA
committed grave abuse of discretion is not what is ruled
32
upon but whether it correctly determined the existence or
want of grave abuse of discretion on the part of the SOLE.
WHEREFORE, the petition is DENIED. The April 18, 2007
Decision and July 31, 2007, Resolution of the Court of
Appeals in CA-G.R. SP No. 76175, which affirmed the
December 27, 2002 Decision of the Secretary of the
Department of Labor and Employment that set aside the
August 10, 2002 Decision of the Med-Arbiter denying
private respondent’s petition for certification election are
hereby AFFIRMED.
SO ORDERED.
G.R. No. 193816, November 21, 2016
ERSON ANG LEE DOING BUSINESS AS "SUPER
LAMINATION SERVICES," Petitioner, v. SAMAHANG
MANGGAGAWA NG SUPER LAMINATION (SMSLS-
NAFLU-KMU), Respondent.
DECISION
SERENO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court on the Decision1 and Resolution2 of the
Court of Appeals (CA) affirming the assailed Decision3 of
the Department of Labor and Employment (DOLE). DOLE
allowed the conduct of certification election among the
rank-and-file employees of Super Lamination Services
(Super Lamination), Express Lamination Services, Inc.
(Express Lamination), and Express Coat Enterprises, lnc.
(Express Coat).
THE ANTECEDENT FACTS
Petitioner Erson Ang Lee (petitioner), through Super
Lamination, is a duly registered entity principally engaged
in the business of providing lamination services to the
general public. Respondent Samahan ng mga
Manggagawa ng Super Lamination Services (Union A) is
a legitimate labor organization, which is also a local
chapter affiliate of the National Federation of Labor Unions
- Kilusang Mayo Uno.4 It appears that Super Lamination is
a sole proprietorship under petitioner's name,5 while
Express Lamination and Express Coat are duly
incorporated entities separately registered with the
Securities and Exchange Commission (SEC).6
On 7 March 2008, Union A filed a Petition for Certification
Election7 to represent all the rank-and-file employees of
Super Lamination.8
Notably, on the same date, Express Lamination Workers'
Union (Union B) also filed a Petition for Certification
Election to represent all the rank-and-file employees of
Express Lamination.9
Also on the same date, the Samahan ng mga
Manggagawa ng Express Coat Enterprises, Inc. (Union C)
filed a Petition for Certification Election to represent the
rank-and-file employees of Express Coat.10
33
Super Lamination, Express Lamination, and Express
Coat, all represented by one counsel, separately claimed
in their Comments and Motions to Dismiss that the
petitions must be dismissed on the same ground — lack
of employer-employee relationship between these
establishments and the bargaining units that Unions A, B,
and C seek to represent as well as these unions'
respective members.11 Super Lamination, in its Motion,
posited that a majority of the persons who were
enumerated in the list of members and officers of Union A
were not its employees, but were employed by either
Express Lamination or Express Coat.12 Interestingly, both
Express Lamination and Express Coat, in turn, maintained
the same argument that a majority of those who had
assented to the Petition for Certification Election were not
employees of either company, but of one of the two other
companies involved.13
All three Petitions for Certification Election of the Unions
were denied. On 21 May 2008, an Order was issued by
DOLE National Capital Region (NCR) Med-Arbiter Michael
Angelo Parado denying the respective petitions of Unions
B and C on the ground that there was no existing
employer-employee relationship between the members of
the unions and the companies concerned. On 23 May
2008, DOLE NCR Med-Arbiter Alma Magdaraog-Alba also
denied the petition of respondent Union A on the same
ground.14
The three unions filed their respective appeals before the
Office of the DOLE Secretary, which consolidated the
appeal because the involved companies alternately
referred to one another as the employer of the members
of the bargaining units sought to be represented.15 The
unions argued that their petitions should have been
allowed considering that the companies involved were
unorganized, and that the employers had no concomitant
right to oppose the petitions. They also claimed that while
the questioned employees might have been assigned to
perform work at the other companies, they were all under
one management's direct control and supervision.16
DOLE, through Undersecretary Romeo C. Lagman,
rendered the assailed Decision, the dispositive portion of
which reads as follows: ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the appeals filed by
Express Lamination Workers Union (ELWU-NAFLU-
KMU), Samahang Manggagawa ng Express Coat
Enterprises, Inc. (SMEC-NAFLU-KMU) and Samahang
Manggagawa ng Super Lamination Services (SMSLS
NAFLU-KMU) are hereby GRANTED and the Orders
dated 21 May 2008 of DOLE-NCR Mediator-Arbiter
Michael Angelo T. Parado are hereby REVERSED and
SET ASIDE. The Order dated 23 May 2008 of DOLE NCR
Mediator-Arbiter Alma E. Magdaraog-Alba is
likewise REVERSED and SET ASIDE.
Accordingly, let the entire records of this be remanded to
the regional office of origin for the immediate conduct of
certification election among the rank-and-file employees of
Express Lamination Services, Inc., Super Lamination
Services and Express Coat Enterprises Inc., after the
conduct of pre-election conference/s, with the following as
choices;
34
1. Express Lamination Workers Union-NAFLU-KMU;
2. Samahan ng mga Manggagawa ng Super Lamination
Services NAFLU-KMU;
3. Samahang ng mga Manggagawa ng Express Coat
Enterprises, Inc.-NAFLU-KMU; and
4. "No Union."
The employer/s and/or contending union(s) are hereby
directed to submit to the Regional Office of origin, within
ten (10) days from receipt of this Decision, a certified list
of employees in the bargaining unit or the payrolls
covering the members of the bargaining unit for the last
three (3) months prior to the issuance of the Decision.
SO DECIDED.17(Emphases in the original)
DOLE found that Super Lamination, Express Lamination,
and Express Coat were sister companies that had a
common human resource department responsible for
hiring and disciplining the employees of the three
companies. The same department was found to have also
given them daily instructions on how to go about their work
and where to report for work. It also found that the three
companies involved constantly rotated their workers, and
that the latter's identification cards had only one
signatory.18
To DOLE, these circumstances showed that the
companies were engaged in a work-pooling scheme, in
light of which they might be considered as one and the
same entity for the purpose of determining the appropriate
bargaining unit in a certification election.19 DOLE applied
the concept of multi-employer bargaining under Sections
5 and 6 of DOLE Department Order 40-03, Series of 2003.
Under that concept, the creation of a single bargaining unit
for the rank-and-file employees of all three companies was
not implausible and was justified under the given
circumstances.20 Thus, it considered these rank-and-file
employees as one bargaining unit and ordered the
conduct of a certification election as uniformly prayed for
by the three unions.
Aggrieved, petitioner instituted an appeal before the CA,
which denied his Petition and affirmed the Decision of
DOLE. It sided with DOLE in finding that Super
Lamination, Express Lamination, and Express Coat were
sister companies that had adopted a work-pooling
scheme. Therefore, it held that DOLE had correctly
applied the concept of multi-employer bargaining in finding
that the three companies could be considered as the same
entity, and their rank-and-file employees as comprising
one bargaining unit.21
Petitioner filed a Motion for Reconsideration of the CA
Decision, but the motion was denied.22 Therefore, he now
comes to this Court through the present Petition.
ISSUES
From the established facts and arguments, we cull the
issues as follows:
35
1. Whether the application of the doctrine of piercing
the corporate veil is warranted
2. Whether the rank-and-file employees of Super
Lamination, Express Lamination, and Express Coat
constitute an appropriate bargaining unit
THE COURT'S RULING
We deny the petition.
An application of the doctrine of
piercing the corporate veil is
warranted.
Petitioner argues that separate corporations cannot be
treated as a single bargaining unit even if their businesses
are related,23 as these companies are indubitably distinct
entities with separate juridical personalities.24 Hence, the
employees of one corporation cannot be allowed to vote in
the certification election of another corporation, lest the
abovementioned rule be violated.25cralawred
Petitioner's argument, while correct, is a general rule. This
Court has time and again disregarded separate juridical
personalities under the doctrine of piercing the corporate
veil. It has done so in cases where a separate legal entity
is used to defeat public convenience, justify wrong, protect
fraud, or defend crime, among other grounds.26 In any of
these situations, the law will regard it as an association of
persons or, in case of two corporations, merge them into
one.27
A settled formulation of the doctrine of piercing the
corporate veil is that when two business enterprises are
owned, conducted, and controlled by the same parties,
both law and equity will, when necessary to protect the
rights of third parties, disregard the legal fiction that these
two entities are distinct and treat them as identical or as
one and the same.28
This formulation has been applied by this Court to cases
in which the laborer has been put in a disadvantageous
position as a result of the separate juridical personalities
of the employers involved.29 Pursuant to veil-piercing, we
have held two corporations jointly and severally liable for
an employee's back wages.30 We also considered a
corporation and its separately incorporated branches as
one and the same for purposes of finding the corporation
guilty of illegal dismissal.31 These rulings were made
pursuant to the fundamental doctrine that the corporate
fiction should not be used as a subterfuge to commit
injustice and circumvent labor laws.32
Here, a certification election was ordered to be held for all
the rank-and-file employees of Super Lamination, Express
Lamination, and Express Coat. The three companies were
supposedly distinct entities based on the fact that Super
Lamination is a sole proprietorship while Express
Lamination and Express Coat were separately registered
with the SEC.33 The directive was therefore, in effect, a
piercing of the separate juridical personalities of the
corporations involved. We find the piercing to be proper
and in accordance with the law as will be discussed below.
36
The following established facts show that Super
Lamination, Express Lamination, and Express Coat are
under the control and management of the same party —
petitioner Ang Lee. In effect, the employees of these three
companies have petitioner as their common employer, as
shown by the following facts:
1. Super Lamination, Express Lamination, and
Express Coat were engaged in the same business
of providing lamination services to the public as
admitted by petitioner in his petition.34
2. The three establishments operated and hired
employees through a common human resource
department as found by DOLE in a clarificatory
hearing.35 Though it was not clear which company
the human resource department was officially
attached to, petitioner admits in his petition that
such department was shared by the three
companies for purposes of convenience.36
3. The workers of all three companies were constantly
rotated and periodically assigned to Super
Lamination or Express Lamination or Express Coat
to perform the same or similar tasks.37 This finding
was further affirmed when petitioner admitted in his
petition before us that the Super Lamination had
entered into a work-pooling agreement with the two
other companies and shared a number of their
employees.38
4. DOLE found and the CA affirmed that the common
human resource department imposed disciplinary
 sanctions and directed the daily performance of all
the members of Unions A, B, and C.39
5. Super Lamination included in its payroll and SSS
registration not just its own employees, but also the
supposed employees of Express Lamination and
Express Coat. This much was admitted by
petitioner in his Motion to Dismiss40 which was
affirmed by the Med-Arbiter in the latter's
Order.41cralawred
6. Petitioner admitted that Super Lamination had
issued and signed the identification cards of
employees who were actually working for Express
Lamination and Express Coat.42
7. Super Lamination, Express Lamination, and
Express Coat were represented by the same
counsel who interposed the same arguments in
their motions before the Med-Arbiters and DOLE.43
Further, we discern from the synchronized movements of
petitioner and the two other companies an attempt to
frustrate or defeat the workers' right to collectively bargain
through the shield of the corporations' separate juridical
personalities. We make this finding on the basis of the
motions to dismiss filed by the three companies. While
similarly alleging the absence of an employer-employee
relationship, they alternately referred to one another as the
employer of the members of the bargaining units sought to
be represented respectively by the unions. This fact was
affirmed by the Med-Arbiters' Orders finding that indeed,
the supposed employees of each establishment were
found to be alternately the employees of either of the two
37
other companies as well. This was precisely the reason
why DOLE consolidated the appeals filed by Unions A, B,
and C.44
Due to the finger-pointing by the three companies at one
another, the petitions were dismissed. As a result, the
three unions were not able to proceed with the conduct of
the certification election. This also caused confusion
among the employees as to who their real employer is, as
Union A claims in its Comment.45
We hold that if we allow petitioner and the two other
companies to continue obstructing the holding of the
election in this manner, their employees and their
respective unions will never have a chance to choose their
bargaining representative. We take note that all three
establishments were unorganized. That is, no union
therein was ever duly recognized or certified as a
bargaining representative.46
Therefore, it is only proper that, in order to safeguard the
right of the workers and Unions A, B, and C to engage in
collective bargaining, the corporate veil of Express
Lamination and Express Coat must be pierced. The
separate existence of Super Lamination, Express
Lamination, and Express Coat must be disregarded. In
effect, we affirm the lower tribunals in ruling that these
companies must be treated as one and the same unit for
purposes of holding a certification election.
Petitioner has cited Diatagon Labor Federation Local v.
Ople47 and Indophil Textile Mill Worker Union v. Calica48 in
which this Court refused to treat separate corporations as
a single bargaining unit. Those cases, however, are not
substantially identical with this case and would not warrant
their application herein. Unlike in the instant case, the
corporations involved were found to be completely
independent or were not involved in any act that frustrated
the laborers' rights.
In Diatagon,49 we refused to include the 236 employees of
Georgia Pacific International Corporation in the bargaining
unit of the employees of Liangga Bay Logging Co., Inc.
This Court's refusal was in light of the fact that the two
corporations were indubitably distinct entities with
separate corporate identities and origins. Moreover, there
was no discernible attempt to frustrate any of their labor-
related rights, as the only conflict was over which
bargaining unit they belonged to.
In Indophil,50 this Court refused to pierce the corporate veil
of Indophil Textile Mill and Indophil Acrylic Manufacturing.
We found that the creation of Indophil Acrylic was not a
device to evade the application of the collective bargaining
agreement (CBA) between petitioner union and Indophil
Textile Mill. This Court further found that despite the
similarity in their business operations, the separate
personalities of the two corporations were maintained and
were not used for any of the purposes specified under the
law that would warrant piercing. It is also apparent in this
case that the workers' rights were not being hampered by
the employers concerned, as the only issue between them
was the extent of the subject CBA's application.
In this case, not only were Super Lamination, Express
Lamination, and Express Coat found to be under the
38
control of petitioner, but there was also a discernible
attempt to disregard the workers' and unions' right to
collective bargaining.
The foregoing considered, we find no error in the CA's
affirmance of the DOLE directive. We affirm DOLE's
application by analogy of the concept of multi-employer
bargaining to justify its Decision to treat the three
companies as one. While the multi-employer bargaining
mechanism is relatively new and purely optional under
Department Order No. 40-03, it illustrates the State's
policy to promote the primacy of free and responsible
exercise of the right to collective bargaining.51 The
existence of this mechanism in our labor laws affirm
DOLE's conclusion that its treatment of the employees of
the three companies herein as a single bargaining unit is
neither impossible nor prohibited.52 It is justified under the
circumstances discussed above.
Besides, it is an established rule that factual findings of
labor officials, who are deemed to have acquired expertise
in matters within their jurisdiction, are generally accorded
by the courts not only respect but even finality when
supported by substantial evidence; i.e., that amount of
relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion.53
The bargaining unit of the rank-and
file employees of the three companies
is appropriate.
Petitioner argues that there is no showing that the rank-
and-file employees of the three companies would
constitute an appropriate bargaining unit on account of the
latter's different geographical locations.54 This contention
lacks merit. The basic test for determining the appropriate
bargaining unit is the application of a standard whereby a
unit is deemed appropriate if it affects a grouping of
employees who have substantial, mutual interests in
wages, hours, working conditions, and other subjects of
collective bargaining.55 We have ruled that geographical
location can be completely disregarded if the communal or
mutual interests of the employees are not sacrificed.56
management relations in the interest of sound and stable
industrial peace.60
WHEREFORE, the Petition for Review on Certiorari under
Rule 45 is DENIED for lack of merit. The Court of Appeals
Decision61 and Resolution62 in CA-G.R. SP No. 109486
are hereby AFFIRMED.
SO ORDERED. cralawlawlibrary

In the present case, there was communal interest among A. Bargaining Agent; Certification Election
the rank-and-file employees of the three companies based Proceedings
on the finding that they were constantly rotated to all three
companies, and that they performed the same or similar Labor Code: Arts. 267-272
duties whenever rotated.57 Therefore, aside from Omnibus Rules, Book V , Rule I, Sec. 1 (d, h, j, o, p, q, t,
geographical location, their employment status and ll, ss, bbb, a, tt, ww),
working conditions were so substantially similar as to Rules VI-X, as amended by D.O. 40, D.O. 40-F-03, series
justify a conclusion that they shared a community of of 2008, and further
interest. This finding is consistent with the policy in favor amended by D.O. 40-I-15, series of 2015
of a single-employer unit, unless the circumstances
require otherwise.58 The more solid the employees are,
the stronger is their bargaining capacity.59 G.R. No. 160352 July 23, 2008

As correctly observed by the CA and DOLE, while there is REPUBLIC OF THE PHILIPPINES, represented by
no prohibition on the mere act of engaging in a work- Department of Labor and Employment
pooling scheme as sister companies, that act will not be (DOLE), Petitioner,
tolerated, and the sister companies' separate juridical vs.
personalities will be disregarded, if they use that scheme KAWASHIMA TEXTILE MFG., PHILIPPINES,
to defeat the workers' right to collective bargaining. The INC., Respondent.
employees' right to collectively bargain with their
employers is necessary to promote harmonious labor- DECISION

39
AUSTRIA-MARTINEZ, J.:
The Republic of the Philippines assails by way of Petition
for Review on Certiorari under Rule 45 of the Rules of
Court, the December 13, 2002 Decision1 of the Court of
Appeals (CA), which reversed the August 18, 2000
Decision2 of the Department of Labor and Employment
(DOLE), and reinstated the May 17, 2000 Order3 of Med-
Arbiter Anastacio L. Bactin, dismissing the petition of
Kawashima Free Workers Union-PTGWO Local Chapter
No. 803 (KFWU) for the conduct of a certification election
in Kawashima Textile Mfg. Phils., Inc. (respondent); and
the October 7, 2003 CA Resolution4 which denied the
motion for reconsideration.
The relevant facts are of record.
On January 24, 2000, KFWU filed with DOLE Regional
Office No. IV, a Petition for Certification Election to be
conducted in the bargaining unit composed of 145 rank-
and-file employees of respondent.5 Attached to its petition
are a Certificate of Creation of Local/Chapter6 issued on
January 19, 2000 by DOLE Regional Office No. IV, stating
that it [KFWU] submitted to said office a Charter Certificate
issued to it by the national federation Phil. Transport &
General Workers Organization (PTGWO), and a Report of
Creation of Local/Chapter.7
Respondent filed a Motion to Dismiss8 the petition on the
ground that KFWU did not acquire any legal personality
because its membership of mixed rank-and-file and
supervisory employees violated Article 245 of the Labor
Code, and its failure to submit its books of account
40
contravened the ruling of the Court in Progressive
Development Corporation v. Secretary, Department of
Labor and Employment.9
In an Order dated May 17, 2000, Med-Arbiter Bactin found
KFWU’s legal personality defective and dismissed its
petition for certification election, thus:
We scrutinize the facts and evidences presented by the
parties and arrived at a decision that at least two (2)
members of [KFWU], namely: Dany I. Fernandez and
Jesus R. Quinto, Jr. are supervisory employees, having a
number of personnel under them. Being supervisory
employees, they are prohibited under Article 245 of the
Labor Code, as amended, to join the union of the rank and
file employees. Dany I. Fernandez and Jesus R. Quinto,
Jr., Chief Engineers of the Maintenance and
Manufacturing Department, respectively, act as foremen
to the line engineers, mechanics and other non-skilled
workers and responsible [for] the preparation and
organization of maintenance shop fabrication and
schedules, inventory and control of materials and supplies
and tasked to implement training plans on line engineers
and evaluate the performance of their subordinates. The
above-stated actual functions of Dany I. Fernandez and
Jesus R. Quinto, Jr. are clear manifestation that they are
supervisory employees.
xxxx
Since petitioner’s members are mixture of rank and
file and supervisory employees, petitioner union, at
this point [in] time, has not attained the status of a
legitimate labor organization. Petitioner should first
exclude the supervisory employees from it
membership before it can attain the status of a
legitimate labor organization. The above judgment is
supported by the decision of the Supreme Court in the
Toyota Case10 wherein the High Tribunal ruled:
"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." (Underscoring omitted.)
xxxx
Furthermore, the commingling of rank and file and
supervisory employees in one (1) bargaining unit cannot
be cured in the exclusion-inclusion proceedings [at] the
pre-election conference. The above ruling is supported by
the Decision of the Supreme Court in Dunlop Slazenger
(Phils.), Inc. vs. Honorable Secretary of Labor and
Employment, et al., G.R. No. 131248 dated December 11,
199811 x x x.
xxxx
WHEREFORE, premises considered, the petition for
certification election is hereby dismissed for lack of
requisite legal status of petitioner to file this instant
petition.
41
SO ORDERED.12 (Emphasis supplied)
On the basis of the aforecited decision, respondent filed
with DOLE Regional Office No. IV a Petition for
Cancellation of Charter/Union Registration of KFWU,13 the
final outcome of which, unfortunately, cannot be
ascertained from the records.
Meanwhile, KFWU appealed14 to the DOLE which issued
a Decision on August 18, 2000, the dispositive portion of
which reads:
WHEREFORE, the appeal is GRANTED. The Order dated
17 May 2000 of the Med-Arbiter is REVERSED and SET
ASIDE. Accordingly, let the entire records of the case be
remanded to the office of origin for the immediate conduct
of certification election, subject to the usual pre-election
conference, among the rank-and-file employees of
Kawashima Textile Manufacturing Philippines, Inc. with
the following choices:
1. Kawashima Free Workers Union-PTGWO Local
Chapter No. 803; and
2. No union.
Pursuant to Rule XI, Section 11.1 of the New
Implementing Rules, the employer is hereby directed to
submit to the office of origin the certified list of current
employees in the bargaining unit for the last three months
prior to the issuance of this decision.
SO DECIDED.15
The DOLE held that Med-Arbiter Bactin's reliance on the
decisions of the Court in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor
Union16 and Dunlop Slazenger, Inc. v. Secretary of Labor
and Employment17 was misplaced, for while Article 245
declares supervisory employees ineligible for membership
in a labor organization for rank-and-file employees, the
provision did not state the effect of such prohibited
membership on the legitimacy of the labor organization
and its right to file for certification election. Neither was
such mixed membership a ground for cancellation of its
registration. Section 11, Paragraph II, Rule XI of
Department Order No. 9 "provides for the dismissal of a
petition for certification election based on lack of legal
personality of a labor organization only on the following
grounds: (1) [KFWU] is not listed by the Regional Office or
the Bureau of Labor Relations in its registry of legitimate
labor organizations; or (2) [KFWU's] legal personality has
been revoked or canceled with finality."18 The DOLE noted
that neither ground existed; on the contrary, KFWU's legal
personality was well-established, for it held a certificate of
creation and had been listed in the registry of legitimate
labor organizations.
As to the failure of KFWU to file its books of account, the
DOLE held that such omission was not a ground for
revocation of union registration or dismissal of petition for
certification election, for under Section 1, Rule VI of
Department Order No. 9, a local or chapter like KFWU was
no longer required to file its books of account.19
42
Respondent filed a Motion for Reconsideration 20 but the
DOLE denied the same in its September 28, 2000
Resolution.21
However, on appeal by respondent, the CA rendered the
December 13, 2002 Decision assailed herein, reversing
the August 18, 2000 DOLE Decision, thus:
Since respondent union clearly consists of both rank
and file and supervisory employees, it cannot qualify
as a legitimate labor organization imbued with the
requisite personality to file a petition for certification
election. This infirmity in union membership cannot
be corrected in the inclusion-exclusion proceedings
during the pre-election conference.
Finally, contrary to the pronouncement of public
respondent, the application of the doctrine enunciated
in Toyota Motor Philippines Corporation vs. Toyota Motor
Philippines Corporation Labor Union was not construed in
a way that effectively denies the fundamental right of
respondent union to organize and seek bargaining
representation x x x.
For ignoring jurisprudential precepts on the matter, the
Court finds that the Undersecretary of Labor, acting under
the authority of the Secretary of Labor, acted with grave
abuse of discretion amounting to lack or excess of
jurisdiction.
WHEREFORE, premises considered, the Petition is
hereby GRANTED. The Decision dated 18 August 2000 of
the Undersecretary of Labor, acting under the authority of
the Secretary, is hereby REVERSED and SET ASIDE.
The Order dated 17 May 2000 of the Med-Arbiter
dismissing the petition for certification election filed by
Kawashima Free Workers Union-PTGWO Local Chapter
No. 803 is REINSTATED.
SO ORDERED.22 (Emphasis supplied)
KFWU filed a Motion for Reconsideration23 but the CA
denied it.
The Republic of the Philippines (petitioner) filed the
present petition to seek closure on two issues:
First, whether a mixed membership of rank-and-file and
supervisory employees in a union is a ground for the
dismissal of a petition for certification election in view of
the amendment brought about by D.O. 9, series of 1997,
which deleted the phraseology in the old rule that "[t]he
appropriate bargaining unit of the rank-and-file employee
shall not include the supervisory employees and/or
security guards;" and
Second, whether the legitimacy of a duly registered labor
organization can be collaterally attacked in a petition for a
certification election through a motion to dismiss filed by
an employer such as Kawashima Textile Manufacturing
Phils., Inc.24
The petition is imbued with merit.
43
The key to the closure that petitioner seeks could have
been Republic Act (R.A.) No. 9481.25 Sections 8 and 9
thereof provide:
Section 8. Article 245 of the Labor Code is hereby
amended to read as follows:
"Art. 245. Ineligibility of Managerial Employees to Join any
Labor Organization; Right of Supervisory Employees. -
Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall
not be eligible for membership in the collective bargaining
unit of the rank-and-file employees but may join, assist or
form separate collective bargaining units and/or legitimate
labor organizations of their own. The rank and file union
and the supervisors' union operating within the same
establishment may join the same federation or national
union."
Section 9. A new provision, Article 245-A is inserted into
the Labor Code to read as follows:
"Art. 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." (Emphasis supplied)
Moreover, under Section 4, a pending petition for
cancellation of registration
will not hinder a legitimate labor organization from initiating
a certification election, viz:
Sec. 4. A new provision is hereby inserted into the Labor
Code as Article 238-A to read as follows:
"Art. 238-A. Effect of a Petition for Cancellation of
Registration. - A petition for cancellation of union
registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a
petition for certification election.
In case of cancellation, nothing herein shall restrict the
right of the union to seek just and equitable remedies in
the appropriate courts." (Emphasis supplied)
Furthermore, under Section 12 of R.A. No. 9481,
employers have no personality to interfere with or thwart a
petition for certification election filed by a legitimate labor
organization, to wit:
Sec. 12. A new provision, Article 258-A is hereby inserted
into the Labor Code to read as follows:
"Art. 258-A. Employer as Bystander. - In all cases, whether
the petition for certification election is filed by an employer
or a legitimate labor organization, the employer shall not
be considered a party thereto with a concomitant right
to oppose a petition for certification election. The
employer's participation in such proceedings shall be
limited to: (1) being notified or informed of petitions of
such nature; and (2) submitting the list of employees
during the pre-election conference should the Med-
44
Arbiter act favorably on the petition." (Emphasis
supplied)
However, R.A. No. 9481 took effect only on June 14,
2007;26 hence, it applies only to labor representation
cases filed on or after said date.27 As the petition for
certification election subject matter of the present petition
was filed by KFWU on January 24, 2000,28 R.A. No. 9481
cannot apply to it. There may have been curative labor
legislations29 that were given retrospective effect,30 but not
the aforecited provisions of R.A. No. 9481, for otherwise,
substantive rights and interests already vested would be
impaired in the process.31
Instead, the law and rules in force at the time of the filing
by KFWU of the petition for certification election on
January 24, 2000 are R.A. No. 6715,32 amending Book V
of Presidential Decree (P.D.) No. 442 (Labor Code),33 as
amended, and the Rules and Regulations Implementing
R.A. No. 6715,34 as amended by Department Order No. 9,
series of 1997.35
It is within the parameters of R.A. No. 6715 and the
Implementing Rules that the Court will now resolve the two
issues raised by petitioner.
If there is one constant precept in our labor laws – be it
Commonwealth Act No. 213 (1936),36 R.A. No. 875
(1953),37 P.D. No. 442 (1974), Executive Order (E.O.) No.
111 (1986)38 or R.A. No. 6715 (1989) - it is that only a
legitimate labor organization may exercise the right to be
certified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for
purposes of collective bargaining.39 What has varied over
the years has been the degree of enforcement of this
precept, as reflected in the shifting scope of administrative
and judicial scrutiny of the composition of a labor
organization before it is allowed to exercise the right of
representation.
One area of contention has been the composition of the
membership of a labor organization, specifically whether
there is a mingling of supervisory and rank-and-file
employees and how such questioned mingling affects its
legitimacy.
It was in R.A. No. 875, under Section 3, that such
questioned mingling was first prohibited,40 to wit:
Sec. 3. Employees’ right to self-organization. – Employees
shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives
of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual
aid or protection. Individuals employed as supervisors
shall not be eligible for membership in a labor organization
of employees under their supervision but may form
separate organizations of their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the
questioned mingling can affect the legitimacy of the labor
organization. Under Section 15, the only instance when a
labor organization loses its legitimacy is when it violates its
duty to bargain collectively; but there is no word on
whether such mingling would also result in loss of
45
legitimacy. Thus, when the issue of whether the
membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came
before the Court En Banc in Lopez v. Chronicle Publication
Employees Association,41 the majority pronounced:
It may be observed that nothing is said of the effect of such
ineligibility upon the union itself or on the status of the
other qualified members thereof should such prohibition
be disregarded. Considering that the law is specific where
it intends to divest a legitimate labor union of any of the
rights and privileges granted to it by law, the absence of
any provision on the effect of the disqualification of one of
its organizers upon the legality of the union, may be
construed to confine the effect of such ineligibility only
upon the membership of the supervisor. In other words,
the invalidity of membership of one of the organizers does
not make the union illegal, where the requirements of the
law for the organization thereof are, nevertheless, satisfied
and met.42 (Emphasis supplied)
Then the Labor Code was enacted in 1974 without
reproducing Sec. 3 of R.A. No. 875. The provision in the
Labor Code closest to Sec. 3 is Article 290,43 which is
deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one
labor organization. Even the Omnibus Rules Implementing
Book V of the Labor Code44 (Omnibus Rules) merely
provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards
to cease operation. – All existing supervisory unions and
unions of security guards shall, upon the effectivity of the
Code, cease to operate as such and their registration
certificates shall be deemed automatically cancelled.
However, existing collective agreements with such unions,
the life of which extends beyond the date of effectivity of
the Code shall be respected until their expiry date insofar
as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the
definition of managerial employees shall become eligible
to join or assist the rank and file organization. The
determination of who are managerial employees and who
are not shall be the subject of negotiation between
representatives of supervisory union and the employer. If
no agreement s reached between the parties, either or
both of them ma bring the issue to the nearest Regional
Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No.
875 prompted the Court to declare in Bulletin v.
Sanchez45 that supervisory employees who do not fall
under the category of managerial employees may join or
assist in the formation of a labor organization for rank-and-
file employees, but they may not form their own labor
organization.
While amending certain provisions of Book V of the Labor
Code, E.O. No. 111 and its implementing rules46 continued
to recognize the right of supervisory employees, who do
not fall under the category of managerial employees, to
join a rank-and-file labor organization.47
46
Effective 1989, R.A. No. 6715 restored the prohibition
against the questioned mingling in one labor organization,
viz:
Sec. 18. Article 245 of the same Code, as amended, is
hereby further amended to read as follows
"Art. 245. Ineligibility of managerial employees to join
any labor organization; right of supervisory
employees. Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own."
(Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715
omitted specifying the exact effect any violation of the
prohibition 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 x x 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 x x.
(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:
xxxx
(c) description of the bargaining unit which shall be the
employer unit unless circumstances otherwise require;
and provided further, that the appropriate bargaining unit
of the rank-and-file employees shall not include
supervisory employees and/or security guards. (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.
47
Thus, when the issue of the effect of mingling was brought
to the fore in Toyota,48 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.
xxxx
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.49 (Emphasis supplied)
In Dunlop,50 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.51
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:
Rule
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall
be in writing and under oath and shall contain, among
others, the following: x x x (c) The description of the
bargaining unit.52
In Pagpalain Haulers, Inc. v. Trajano,53 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:
Sec. 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.
XI 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-PGTWO54 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
Dunlop and reverted to its pronouncement in Lopez that
48
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.55 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.56
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,57 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 for the DOLE to deny recognition to said local or
chapter on account of any question pertaining to its
individual members.58
More to the point is Air Philippines Corporation v. Bureau
of Labor Relations,59 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:60 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
49
circumstances enumerated in Sections (a) and (c) of
Article 239 of the Labor Code.61lavvphil
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.
Consequently, the Court reverses the ruling of the CA and
reinstates that of the DOLE granting the petition for
certification election of KFWU.
Now to the second issue of whether an employer like
respondent may collaterally attack the legitimacy of a labor
organization by filing a motion to dismiss the latter’s
petition for certification election.
Except when it is requested to bargain collectively,62 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.63 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;64 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.65 The employer's only
right in the proceeding is to be notified or informed
thereof.66
of the Court of Appeals2 in CA-G.R. SP No. 60197. The
Court of Appeals sustained the Decision of the
Department of Labor and Employment ("DOLE") directing
the opening of the challenged ballots cast during the
certification election.

The amendments to the Labor Code and its implementing The Antecedent Facts
rules have buttressed that policy even more.
The Samahang Manggagawa sa St. James School of
WHEREFORE, the petition is GRANTED. The December Quezon City ("Samahang Manggagawa") filed a petition
13, 2002 Decision and October 7, 2003 Resolution of the for certification election to determine the collective
Court of Appeals and the May 17, 2000 Order of Med- bargaining representative of the motor pool, construction
Arbiter Anastacio L. Bactin and transportation employees of St. James School of
are REVERSED and SET ASIDE, while the August 18, Quezon City ("St. James"). On 26 June 1999, the
2000 Decision and September 28, 2000 Resolution of the certification election was held at the DOLE office in
Department of Labor and Employment are REINSTATED. Intramuros, Manila. There were 149 eligible voters and 84
voters cast their votes. St. James filed a certification
No costs. election protest challenging the 84 votes. St. James
alleged that it had 179 rank and file employees, none of
SO ORDERED. whom voted in the certification election. St. James argued
that those who voted were not its regular employees but
ST. JAMES SCHOOL OF QUEZON construction workers of an independent contractor,
CITY, Petitioner, v. SAMAHANG MANGGAGAWA SA Architect Conrado Bacoy ("Architect Bacoy").
ST. JAMES SCHOOL OF QUEZON CITY, Respondent.
In an Order dated 6 January 2000,3 Med-Arbiter Tomas F.
DECISION Falconitin ("Med-Arbiter Falconitin") ruled that at the time
of the certification election, the 84 voters were no longer
CARPIO, J.: working at St. James. Med-Arbiter Falconitin supported his
ruling using the roster of rank and file employees
The Case submitted by St. James, which did not include the names
of the 84 voters. Med-Arbiter Falconitin also ruled that
Before the Court is a Petition for Review 1 assailing the 5 since the construction projects have ceased, some of the
September 2001 Decision and 3 January 2002 Resolution workers were no longer entitled to vote in the certification

50
election. Finally, Med-Arbiter Falconitin ruled that even if
the 84 workers were to be included in the 179 rank and file
employees of St. James, the total number of voters would
be 263. Thus, the 84 votes cast would not be sufficient to
constitute a majority of all eligible voters to have a valid
certification election. The dispositive portion of the Order
reads:
WHEREFORE, premises considered, the certification
election protest is hereby given due course.
Accordingly, judgment is hereby rendered, declaring the
certification election for the rank and file employees of
respondent/protestant St. James School of Quezon City
conducted on June 26, 1999, a failure; and null and void
ab initio.
SO ORDERED.4
Samahang Manggagawa appealed to the Secretary of
Labor. In its Decision5 dated 5 May 2000, the
DOLE6 reversed the ruling of Med-Arbiter Falconitin. The
DOLE ruled that Samahang Manggagawa seeks to
represent the non-academic personnel or the rank and file
employees from the motor pool, construction and
transportation departments, and not all the rank and file
employees of St. James. According to the DOLE, Med-
Arbiter Falconitin erred in including all the rank and file
employees of St. James, whether teaching or non-
teaching personnel, in the computation of the total number
of employees. The DOLE ruled that the list submitted by
St. James contained only the administrative, teaching and
51
office personnel of the school. The dispositive portion of
the Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the
order dated 06 January 2000 of the Med-Arbiter is
REVERSED and SET ASIDE. In lieu thereof, an order is
hereby issued directing the Election Officer, Lilibeth
Cagara, DOLE-National Capital Region to open and
canvass the 84 challenged ballots within ten (10) days
from receipt hereof, subject to usual notice and
representation by the parties and thereafter to issue the
corresponding certification of the results.
SO DECIDED.7
St. James filed a motion for reconsideration. The
DOLE8 denied the motion in its 19 June 2000
Resolution.9 St. James filed a special civil action before
the Court of Appeals.
In a Decision10 dated 5 September 2001, the Court of
Appeals dismissed the petition and ruled that the DOLE
did not commit grave abuse of discretion in reversing the
ruling of Med-Arbiter Falconitin. In its 3 January 2002
Resolution,11 the Court of Appeals denied St. James'
motion for reconsideration.
Hence, the petition before this Court.
The Issues
St. James questions the validity of the formation of the
labor union and the validity of the certification election.12
The Ruling of the Court
The petition has no merit.
The Validity of the Formation of the Labor Union
St. James argues that majority of the members of
Samahang Manggagawa are not its employees but
employees of Architect Bacoy, an independent contractor.
St. James may no longer question the validity of the
formation of the labor union.
The records13 show that prior to the holding of the
certification election, St. James filed a petition for
cancellation of Samahang Manggagawa's union
registration. Among the grounds cited in the petition was
the lack of employer-employee relationship between St.
James and Samahang Manggagawa's members. The
Med-Arbiter recommended the cancellation of the union
registration. DOLE Regional Director IV Romeo Young
("Director Young") adopted the Med-Arbiter's
recommendation and cancelled Samahang
Manggagawa's union registration. Samahang
Manggagawa filed an appeal before the Bureau of Labor
Relations ("BLR"). In its Decision14 dated 22 January
1998, the BLR15 reversed Director Young's Decision. In its
Resolution16 of 12 February 1998, the BLR denied St.
James' motion for reconsideration. St. James filed a
special civil action before the Court of Appeals. The case
was docketed as CA-G.R. SP No. 50918. In its 9 February
2001 Decision,17 the Court of Appeals dismissed St.
James' petition and affirmed the BLR's Decision. The
52
Court of Appeals ruled that the construction workers are
actually St. James' regular employees in its motor pool,
construction and transportation departments. The Court of
Appeals also ruled that Architect Bacoy is a labor-only
contractor and thus an agent of St. James, which is the
real employer.
St. James filed a petition for certiorari before this Court.
The case was docketed as G.R. No. 149648. In a
Resolution dated 10 October 2001, this Court denied the
petition for St. James' error in the choice or mode of
appeal.18 The Court's 10 October 2001 Resolution closed
any issue on the validity of the formation of the labor union.
The Validity of the Certification Election
Section 13, Rule XII, Book V of the Omnibus Rules
Implementing the Labor Code ("Omnibus Rules")
provides:
Section 13. Proclamation and certification of results by
election officer; when proper. - Upon completion of the
canvass there being a valid election, the election officer
shall proclaim and certify as winner the union which
obtained a majority of the valid votes cast under any of the
following conditions:
a) No protest had been filed or, even if one was filed, the
same was not perfected within the five-day period for
perfection of the protest;
b) No challenge of eligibility issue was raised or even if one
was raised, the resolution of the same will not materially
change the result.
For this purpose, the election officer shall immediately
issue the corresponding certification, copy furnished all
parties, which shall form part of the records of the case.
The winning union shall have the rights, privileges and
obligations of a duly certified collective bargaining
representative from the time the certification is issued. The
proclamation and certification so issued shall not be
appealable.
According to St. James, the certification election was
conducted without quorum. St. James alleges that it has
179 rank and file employees in its Quezon City Campus.
When the certification election was held, none of these
qualified rank and file employees cast their votes because
they were all on duty in the school premises. The 84 voters
who cast their votes are employees of Architect Bacoy. St.
James also alleges that it has 570 rank and file employees
in all its campuses. Even if the 84 voters are its employees,
the votes do not constitute a majority vote of its rank and
file employees because the quorum should be based on
its 570 rank and file employees.
We cannot sustain the argument.
St. James has five campuses - the Philamlife and Scout
Alcaraz, Quezon City campuses which are pre-schools;
the Parañaque City and Calamba, Laguna campuses
which offer elementary, secondary and college education;
53
and the Tandang Sora, Quezon City campus which offers
elementary and secondary education.19
The members of Samahang Manggagawa are employees
in the Tandang Sora campus. Under its constitution and
by-laws, Samahang Manggagawa seeks to represent the
motor pool, construction and transportation employees of
the Tandang Sora campus.20 Thus, the computation of the
quorum should be based on the rank and file motor pool,
construction and transportation employees of the Tandang
Sora campus and not on all the employees in St. James'
five campuses.
Section 2, Rule XII, Book V of the Omnibus Rules
provides:
Section 2. Qualification of voters; inclusion-exclusion
proceedings. - All employees who are members of the
appropriate bargaining unit sought to be represented by
the petitioner at the time of the certification or consent
election shall be qualified to vote. A dismissed employee
whose dismissal is being contested in a pending case shall
be allowed to vote in the election.
In case of disagreement over the voters' list or over the
eligibility of voters, all contested voters shall be allowed to
vote. However, their votes shall be segregated and sealed
in individual envelopes in accordance with Section 9 of
these Rules.
The motor pool, construction and transportation
employees of the Tandang Sora campus had 149 qualified
voters at the time of the certification election. Hence, the
149 qualified voters should be used to determine the
existence of a quorum. Since a majority or 84 out of the
149 qualified voters cast their votes, a quorum existed in
the certification election.
St. James further alleges that the names of the 84 voters
are not on the list of its rank and file employees. On this
score, we sustain the factual finding of the DOLE that the
list submitted by St. James consists of its administrative,
teaching and office personnel. These administrative,
teaching and office personnel are not members of
Samahang Manggagawa. They do not belong to the
bargaining unit that Samahang Manggagawa seeks to
represent. Hence, the list submitted by St. James may not
be used as basis to determine the members of Samahang
Manggagawa.
WHEREFORE, we DENY the petition. We AFFIRM the 5
September 2001 Decision and the 3 January 2002
Resolution of the Court of Appeals in CA-G.R. SP No.
60197.
SO ORDERED.
[G.R. NO. 152094. July 22, 2004]
DHL PHILIPPINES CORPORATIONUNITED RANK AND
FILE ASSOCIATION-FEDERATION OF FREE
WORKERS (DHL-URFA-FFW), Petitioner, v. BUKLOD
NG MANGGAGAWA NG DHL PHILIPPINES
CORPORATION, Respondent.
DECISION
54
PANGANIBAN, J.:
False statements made by union officers before and
during a certification election -- that the union is
independent and not affiliated with a national federation --
are material facts likely to influence the election
results.This principle finds application in the present case
in which the majority of the employees clearly wanted an
independent union to represent them.Thus, after the
members learned of the misrepresentation, and after a
majority of them disaffiliated themselves from the union
and formed another one, a new certification election
should be held to enable them to express their true will.
The late filing of the Petition for a new election can be
excused under the peculiar facts of this case, considering
that the employees concerned did not sleep on their rights,
but promptly acted to protect their prerogatives.Petitioner
should not be permitted to use legal technicalities to
perpetrate the betrayal foisted by its officers upon the
majority of the employees.Procedural technicalities should
not be allowed to suppress the welfare of labor.
The Case
Before us is a Petition for Review1 under Rule 45 of the
Rules of Court, seeking to annul the December 17, 1999
Decision2 and the January 30, 2002 Resolution3 of the
Court of Appeals (CA) in CA-GR SP No. 53270.The
assailed Decision disposed as
follows:chanroblesvirtua1awlibrary
WHEREFORE, the petition is hereby given due
course.Accordingly, the decision of Rosalinda Dimapilis-
[B]aldoz, Undersecretary of Labor, in behalf of [the]
Secretary of Labor and Employment, is
hereby ANNULED and SET ASIDE and DECLARED to
have NO EFFECT whatsoever.
Public respondent and its representatives are hereby
enjoined to refrain and desist from implementing the said
decision.4 cralawred
The challenged Resolution denied petitioners Motion for
Reconsideration.
The Facts
On November 25, 1997, a certification election was
conducted among the regular rank and file employees in
the main office and the regional branches of DHL
Philippines Corporation. The contending choices were
petitioner and no union.
On January 19, 1998, on the basis of the results of the
certification election, with petitioner receiving 546 votes
and no union garnering 348 votes, the election officer
certified the former as the sole and exclusive bargaining
agent of the rank and file employees of the
corporation.5 cralawred
Meanwhile, on December 19, 1997, Respondent Buklod
ng Manggagawa ng DHL Philippines Corporation
(BUKLOD) filed with the Industrial Relations Division of the
Department of Labor and Employment (DOLE) a Petition
55
for the nullification of the certification election. The officers
of petitioner were charged with committing fraud and
deceit in the election proceedings, particularly by
misrepresenting to the voter-employees that it was an
independent union, when it was in fact an affiliate of the
Federation of Free Workers (FFW).
This misrepresentation was supposedly the basis for their
selection of petitioner in the certification election.Allegedly
supporting this claim was the fact that those whom it had
misled allegedly withdrew their membership from it and
subsequently formed themselves into an independent
union. The latter union, BUKLOD, was issued a Certificate
of Registration by DOLE on December 23, 1997.
On May 18, 1998, Med-Arbiter Tomas F. Falconitin
nullified the November 25, 1997 certification election and
ordered the holding of another one with the following
contending choices: petitioner, respondent, and no choice.
Setting aside the Decision of Med-Arbiter Falconitin,
DOLE Undersecretary Rosalinda Dimapilis-Baldoz held on
appeal that the issue of representation had already been
settled with finality in favor of petitioner, and that no
petitions for certification election would be entertained
within one year from the time the election officer had
issued the Certification Order.
Ruling of the Court of Appeals
The CA held that the withdrawal of a great majority of the
members of petitioner -- 704 out of 894 of them -- provided
a compelling reason to conduct a certification election
anew in order to determine, once and for all, which union
reflected their choice.Under the circumstances, the issue
of representation was not put to rest by the mere issuance
of a Certification Order by the election officer.
According to the appellate court, broader considerations
should be accorded the disaffiliating member-employees
and a new election held to finally ascertain their will,
consistent with the constitutional and labor law policy of
according full protection to labors right to self-
organization.The CA added that the best forum to
determine the veracity of the withdrawal or retraction of
petitioners former members was another certification
election.
The appellate court also held that the election officers
issuance of a Certification Order on January 19, 1998 was
precipitate because, prior thereto, respondent had filed
with the med-arbiter a Petition for nullification of the
election. Furthermore, the Certification was not in
accordance with Department Order No. 9 (DO 9), Series
of 1997. The charges of fraud and deceit, lodged
immediately after the election by petitioners former
members against their officers, should have been treated
as protests or issues of eligibility within the meaning of
Section 13 of DO 9.
Hence, this Petition.6
Issues
In its Memorandum, petitioner submits the following issues
for our consideration:
56
I
Whether or not the Court of Appeals seriously erred and
committed grave abuse of discretion amounting to lack
and/or excess of jurisdiction when it annul[l]ed, set aside,
and declared to have no effect whatsoever, the Decision
of Undersecretary Rosalinda Dimapilis-Baldoz, which in
effect, reinstated and affirmed the Decision of the Med-
Arbiter, nullifying the result of the certification election as
well as ordering the conduct of a new certification election
at DHL Philippines Corporation, considering
that:chanroblesvirtua1awlibrary
(A) The Court of Appeals, as well as the Med-Arbiter,
ignored the undisputed fact that petitioner a quo (herein
respondent) has not yet existed before, during and shortly
after the conduct of certification election on November 25,
1997, and not yet even registered at the time of the filing
of its Petition a quo on December 19, 1997, therefore, has
no legal personality to institute an action.
(B) The Court of Appeals, as well as the Med-Arbiter
ignored and unjustifiably refused to apply Section 13, Rule
XII of Department Order No. 9, there being no protest nor
challenge raised before, during and even after five (5)
days have lapsed from the conduct of the certification
election on November 25, 1997, as the Petition a quo was
only filed on December 19, 1997 a week before herein
respondent was able to obtain its Certificate of
Registration.
(C) The Court of Appeals ignored and unjustifiably refused
to apply Section 3, Rule V of Department Order No. 9, or
commonly know[n] as the Certification-Year Rule, which
means that no certification election should be entertained
within one (1) year from the time the Election Officer
issued the Certification Order.
II
Whether or not the Court of Appeals seriously erred and
committed grave abuse of discretion, amounting to lack
and/or excess of jurisdiction in rendering the assailed
Decision promulgated on December 17, 1999, as the
same was rendered without the [Office of the] Solicitor
General having filed its comment on the Petition a quo,
despite having filed a Manifestation with Motion to the
effect of not having received the Petition filed by
petitioner a quo, which [h]as remained unacted upon; as
well as the Resolution promulgated on January 30, 2002,
which denied herein petitioners Motion for
Reconsideration, which was rendered without the required
comment thereon by the Petitioner a quo, thus, due
process was violated.
III
Whether or not the Court of Appeals seriously erred and
committed grave abuse of discretion amounting to lack
and/or excess of jurisdiction in holding that the resignation,
withdrawal, retraction of the great majority of the former
members of United DHL should be treated as disaffiliation
from such union.
IV
57
Whether or not, the Court of Appeals seriously erred and
committed grave abuse of discretion amounting to lack
and/or excess of jurisdiction in declaring that x x x while in
the February 28, 1996 x x x decision of Med-Arbiter Tomas
Falconitin provides for a certification election among two
(2) specific choices: the private respondent (then as
petitioner), and No Union as the contending choices, what
was conducted on November 25, 1996 (sic) was a
referendum on a choice of yes or no and not certification
order of the Election Officer reflecting the results in the
number of yes votes and no votes, without indicating the
name of the contending choices.
V
Whether or not the Court of Appeals placed both parties in
Limbo, as the dispositive portion of the Decision or
the fallo, which x x x actually constitutes the judgment or
resolution of the court, failed to specify what should be
done by the parties after the rendition of the said Decision
and Resolution, thus, there can be no subject of
execution.7 cralawred
In simpler terms, the issues being raised are as follows: 1)
the validity of the CA Decision and Resolution; and 2) the
validity of the certification election.
The Courts Ruling
The Petition lacks merit.
First Issue:
Validity of the CA Decision and Resolution
Petitioner assails the validity of the CA Decision for having
been rendered without receipt of the required comment of
the Office of the Solicitor General (OSG) on respondents
Petition; and the CA Resolution for havingbeen issued
without receipt of respondents comment on petitioners
Motion for Reconsideration.
This contention is untenable.
The applicable provision is Section 8 of Rule 65 of the
Rules of Court, which provides:chanroblesvirtua1awlibrary
SECTION 8. Proceedings after comment is filed. -- After
the comment or other pleadings required by the court are
filed, or the time for the filing thereof has expired, the court
may hear the case or require the parties to submit
memoranda.If after such hearing or submission of
memoranda or the expiration of the period for the filing
thereof the court finds that the allegations of the petition
are true, it shall render judgment for the relief prayed for or
to which the petitioner is entitled. x x x. (Italics
supplied)cralawlibrary
From the foregoing provision, it is clear that the Petition
may be resolved, notwithstanding the failure of the
adverse party to file a comment. Its failure to do so despite
due notice is its own lookout.Indeed, when a respondent
fails to file its comment within the given period, the court
may decide the case on the basis of the records before it,
specifically the petition and its attachments.8 cralawred
58
Petitioner insists that the failure of the OSG to receive a
copy of the Petition filed before the CA was the reason for
the OSGs failure to file a Comment thereon.Be that as it
may, as correctly pointed out by respondent, petitioner is
not the proper party to invoke such failure.
At any rate, it is the duty of petitioner to defend its position,
as well as those that upheld it -- the tribunal, the board and
the officer -- because it is the party that is ultimately
interested in sustaining the correctness of the disposition
or the validity of the proceedings.9 cralawred
Petitioner further assails the validity of the CA Decision, on
the ground that its dispositive portion or fallo failed to
specify what should be done by the parties after its
promulgation.
All that the law requires is that the judgment must be
definitive.That is, the rights of the parties must be stated
with finality by the decision itself, which must thus
specifically deny or grant the remedy sought by the
action.10 For review by the CA was Undersecretary
Dimapilis-Baldozs Resolution reversing the Decision of
Med-Arbiter Falconitin.
Parenthetically, the ultimate question presented before the
appellate court was whether a new certification election
should be conducted among the employees of DHL
Philippines Corporation.As correctly pointed out by
respondent, in reversing the undersecretarys Resolution,
the CA necessarily reinstated the med-arbiters earlier
Decision to conduct a new certification election.
A judgment is not confined to what appears on the face of
the decision; it encompasses matters necessarily included
in or are necessary to such judgment.11 The Decision of
Med-Arbiter Falconitin and Undersecretary Dimapilis-
Baldoz should be read in the context of and in relation to
the assailed Decision of the CA.The setting aside of the
undersecretarys Resolution necessarily implies the
holding of a new certification election by the med-arbiter
upon receipt of the records of the case and the motion of
the interested party.
Second Issue:
Validity of the Certification Election
Under Section 13 of the Rules Implementing Book V
(Labor Relations) of the Labor Code,12 as amended, the
election officers authority to certify the results of the
election is limited to situations in which there has been no
protest filed; or if there has been any, it has not been
perfected or formalized within five days from the close of
the election proceedings.
Further, Section 14 of the same Rules provides that when
a protest has been perfected, only the med-arbiter can
proclaim and certify the winner.Clearly, this rule is based
on the election officers function, which is merely to conduct
and supervise certification elections.13 It is the med-arbiter
who is authorized to hear and decide representation
cases.14 Consequently, the decision whether to certify the
results of an election or to set them aside due to incidents
occurring during the campaign is within the med-arbiters
discretion.
59
Petitioner argues that the CA gravely erred in rendering its
assailed Decision, considering that no protest or challenge
had been formalized within five days, or raised during the
election proceedings and entered in the minutes
thereof.Petitioner adds that respondent did not file any
protest, either, against the alleged fraud and
misrepresentation by the formers officers during the
election.
We disagree.When the med-arbiter admitted and gave
due course to respondents Petition for nullification of the
election proceedings, the election officer should have
deferred issuing the Certification of the results
thereof.Section 13 of the Implementing Rules cannot
strictly be applied to the present case.
Respondents contention is that a number of employees
were lured by their officers into believing that petitioner
was an independent union. Since the employees had long
desired to have an independent union that would
represent them in collective bargaining, they voted yes in
favor of petitioner. Having been misled, a majority of them
eventually disaffiliated themselves from it and formed an
independent union, respondent herein, which thereafter
protested the conduct of the election. Having been formed
just after such exercise by the defrauded employees who
were former members of petitioner, respondent could not
have reasonably filed its protest within five days from the
close of the election proceedings.
Notably, after it had applied for registration with the Bureau
of Labor Relations (BLR), respondent filed its Petition to
nullify the certification election. Petitioner insistently
opposed the Petition, as respondent had not yet been
issued a certificate of registration at the time.Because
such certificate was issued in favor of the latter four days
after the filing of the Petition, on December 23, 1997, the
misgivings of the former were brushed aside by the med-
arbiter.Indeed, the fact that respondent was not yet a duly
registered labor organization when the Petition was filed is
of no moment, absent any fatal defect in its application for
registration.
The circumstances in the present case show that the
employees did not sleep on their rights.Hence, their failure
to follow strictly the procedural technicalities regarding the
period for filing their protest should not be taken against
them.Mere technicalities should not be allowed to prevail
over the welfare of the workers.15 What is essential is that
they be accorded an opportunity to determine freely and
intelligently which labor organization shall act on their
behalf.16 Having been denied this opportunity by the
betrayal committed by petitioners officers in the present
case, the employees were prevented from making an
intelligent and independent choice.
False Statements of Union Officers
The making of false statements or misrepresentations that
interfere with the free choice of the employees is a valid
ground for protest.A certification election may be set aside
for misstatements made during the campaign, where 1) a
material fact has been misrepresented in the campaign; 2)
an opportunity for reply has been lacking; and 3) the
misrepresentation has had an impact on the free choice of
the employees participating in the election.17 A
60
misrepresentation is likely to have an impact on their free
choice, if it comes from a party who has special knowledge
or is in an authoritative position to know the true facts.This
principle holds true, especially when the employees are
unable to evaluate the truth or the falsity of the
assertions.18 cralawred
The fact that the officers of petitioner especially its
president, misrepresented it to the voting employees as an
independent union constituted a substantial
misrepresentation of material facts of vital concern to
those employees. The materiality of such
misrepresentation is self-evident.The employees wanted
an independent union to represent them in collective
bargaining, free from outside interference.Thus, upon
knowing that petitioner was in fact an affiliate of the FFW,
the members disaffiliated from petitioner and organized
themselves into an independent union. Additionally, the
misrepresentation came from petitioners recognized
representative, who was clearly in a position to hold
himself out as a person who had special knowledge and
was in an authoritative position to know the true facts.
We are not easily persuaded by the argument of petitioner
that the employees had sufficient time between the
misrepresentation and the election to check the truth of its
claims.They could hardly be expected to verify the
accuracy of any statement regarding petitioner, made to
them by its officers.No less than its president stated that it
was an independent union.At the time, the employees had
no reason to doubt him.
We sustain the following findings of Med-Arbiter
Falconitin:chanroblesvirtua1awlibrary
x x x It must be noted at the outset that [respondent] has
charged [petitioners] officers, agents and representative
with fraud or deception in encouraging its members to form
or join and vote for DHL Philippines Corporation United
Rank-and-File Association which they represented as an
independent labor union not affiliated with any labor
federation or national union.Such serious allegations,
supported with affidavits under oath executed by no less
than seven hundred four (704) DHL Philippines
Corporations employees nationwide, cannot just be
ignored.
xxx
Notwithstanding the fact that [petitioner] union was duly
furnished copy of the petition and the affidavits as its
attachments, it surprisingly failed to question, much less
contest, the veracity of the allegations contained in such
affidavits, more than just harping in general terms that the
allegations are simply incredible and [interposing]
vehement denial.Being unassailed and unrefuted, the
allegations in the affidavits which are considered as x x x
official documents must be givenweightand consideration
by this Office.Furthermore, with the failure of [petitioner] to
rebut the affidavits, more than just denying the allegations,
they give rise to the presumption that [petitioner] has
admitted such allegations in the affidavit and with the
admission, it is inescapable that indeed there was fraud or
machination committed by the [petitioner] that seriously
affected the validity and legitimacy of the certification
61
election conducted on November 25, 1997 which gives
rise to a ground to annul or void the said election, having
been marred by fraud, deceptions and
19
machinations. cralawred
This finding of fact of a quasi-judicial agency of DOLE is
persuasive upon the courts.20 cralawred
Although petitioner won in the election, it is now clear that
it does not represent the majority of the bargaining
employees, owing to the affiliation of its members with
respondent.The present uncertainty as to which union has
their support to represent them for collective bargaining
purposes is a salient factor that this Court has seriously
considered.
The bargaining agent must be truly representative of the
employees.21 At the time of the filing by respondent of the
Petition for nullification, allegiances and loyalties of the
employees were like shifting sands that radically affected
their choice of an appropriate bargaining representative.
The polarization of a good number of them followed their
discovery of the fraud committed by the officers of
petitioner.At any rate, the claim that 704 of the employees
are affiliated with respondent is not sufficiently rebutted by
any evidence on record.
The purpose of a certification election is precisely to
ascertain the majority of the employees choice of an
appropriate bargaining unit -- to be or not to be
represented by a labor organization and, in the affirmative
case, by which one.22 cralawred
Once disaffiliation has been demonstrated beyond doubt, subsequent negotiations and registration of a collective
a certification election is the most expeditious way of bargaining agreement (CBA) executed by SLECC with
determining which union should be the exclusive Samahang Manggagawa sa Sta. Lucia East Commercial
bargaining representative of the employees.23 cralawred (SMSLEC) could not bar Sta. Lucia East Commercial
Corporation Workers Association's (SLECCWA) petition
WHEREFORE, the Petition is DENIED, and the assailed for direct certification.
Decision AFFIRMED.Costs against petitioner.
The Facts
SO ORDERED.
The Secretary narrated the facts as follows:
STA. LUCIA EAST COMMERCIAL
CORPORATION, Petitioner, v. HON. SECRETARY OF On 27 February 2001, Confederated Labor Union of the
LABOR AND EMPLOYMENT and STA. LUCIA EAST Philippines (CLUP), in behalf of its chartered local,
COMMERCIAL CORPORATION WORKERS instituted a petition for certification election among the
ASSOCIATION (CLUP LOCAL regular rank-and-file employees of Sta. Lucia East
CHAPTER), Respondents. Commercial Corporation and its Affiliates, docketed as
Case No. RO400-0202-RU-007. The affiliate companies
DECISION included in the petition were SLE Commercial, SLE
Department Store, SLE Cinema, Robsan East Trading,
CARPIO, J.: Bowling Center, Planet Toys, Home Gallery and
Essentials.
The Case
On 21 August 2001, Med-Arbiter Bactin ordered the
This is a Petition for Review assailing the 1 dismissal of the petition due to inappropriateness of the
Decision2 promulgated on 14 August 2003 as well as the bargaining unit. CLUP-Sta. Lucia East Commercial
Resolution3 promulgated on 24 February 2004 of the Corporation and its Affiliates Workers Union appealed the
Court of Appeals (appellate court) in CA-G.R. SP No. order of dismissal to this Office on 14 September 2001. On
77015. The appellate court denied Sta. Lucia East 20 November 2001, CLUP-Sta. Lucia East Commercial
Commercial Corporation's (SLECC) petition Corporation and its Affiliates Workers Union [CLUP-
for certiorari with prayer for writ of preliminary injunction SLECC and its Affiliates Workers Union] moved for the
and temporary restraining order. The appellate court withdrawal of the appeal. On 31 January 2002, this Office
further ruled that the Secretary of Labor and Employment granted the motion and affirmed the dismissal of the
(Secretary) was correct when she held that the petition.

62
In the meantime, on 10 October 2001, [CLUP-SLECC and
its Affiliates Workers Union] reorganized itself and re-
registered as CLUP-Sta. Lucia East Commercial
Corporation Workers Association (herein appellant CLUP-
SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It
was issued Certificate of Creation of a Local Chapter No.
RO400-0110-CC-004.
On the same date, [CLUP-SLECCWA] filed the instant
petition. It alleged that [SLECC] employs about 115
employees and that more than 20% of employees
belonging to the rank-and-file category are its members.
[CLUP-SLECCWA] claimed that no certification election
has been held among them within the last 12 months prior
to the filing of the petition, and while there is another union
registered with DOLE-Regional Office No. IV on 22 June
2001 covering the same employees, namely [SMSLEC], it
has not been recognized as the exclusive bargaining
agent of [SLECC's] employees.
On 22 November 2001, SLECC filed a motion to dismiss
the petition. It averred that it has voluntarily recognized
[SMSLEC] on 20 July 2001 as the exclusive bargaining
agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced
between them. SLECC argued that the petition should be
dismissed for violating the one year and negotiation bar
rules under pars. (c) and (d), Section 11, Rule XI, Book V
of the Omnibus Rules Implementing the Labor Code.
On 29 November 2001, a CBA between [SMSLEC] and
[SLECC] was ratified by its rank-and-file employees and
63
registered with DOLE-Regional Office No. IV on 9 January
2002.
In the meantime, on 19 December 2001, [CLUP-
SLECCWA] filed its Opposition and Comment to
[SLECC'S] Motion to Dismiss. It assailed the validity of the
voluntary recognition of [SMSLEC] by [SLECC] and their
consequent negotiations and execution of a CBA.
According to [CLUP-SLECCWA], the same were tainted
with malice, collusion and conspiracy involving some
officials of the Regional Office. Appellant contended that
Chief LEO Raymundo Agravante, DOLE Regional Office
No. IV, Labor Relations Division should have not approved
and recorded the voluntary recognition of [SMSLEC] by
[SLECC] because it violated one of the major
requirements for voluntary recognition, i.e., non-existence
of another labor organization in the same bargaining unit.
It pointed out that the time of the voluntary recognition on
20 July 2001, appellant's registration as [CLUP-SLECC
and its Affiliates Workers Union], which covers the same
group of employees covered by Samahang Manggagawa
sa Sta. Lucia East Commercial, was existing and has
neither been cancelled or abandoned. [CLUP-SLECCWA]
also accused Med-Arbiter Bactin of malice, collusion and
conspiracy with appellee company when he dismissed the
petition for certification election filed by [SMSLEC] for
being moot and academic because of its voluntary
recognition, when he was fully aware of the pendency of
[CLUP-SLECCWA's] earlier petition for certification
election.
Subsequent pleadings filed by [CLUP-SLECCWA] and
[SLECC] reiterated their respective positions on the
validity and invalidity of the voluntary recognition. On 29
July 2002, Med-Arbiter Bactin issued the assailed Order.4
The Med-Arbiter's Ruling
In his Order dated 29 July 2002, Med-Arbiter Anastacio L.
Bactin dismissed CLUP-SLECCWA's petition for direct
certification on the ground of contract bar rule. The prior
voluntary recognition of SMSLEC and the CBA between
SLECC and SMSLEC bars the filing of CLUP-SLECCWA's
petition for direct certification. SMSLEC is entitled to enjoy
the rights, privileges, and obligations of an exclusive
bargaining representative from the time of the recording of
the voluntary recognition. Moreover, the duly registered
CBA bars the filing of the petition for direct certification.
CLUP-SLECCWA filed a Memorandum of Appeal of the
Med-Arbiter's Order before the Secretary.
The Ruling of the Secretary of Labor and Employment
In her Decision promulgated on 27 December 2002, the
Secretary found merit in CLUP-SLECCWA's appeal. The
Secretary held that the subsequent negotiations and
registration of a CBA executed by SLECC with SMSLEC
could not bar CLUP-SLECCWA's petition. CLUP-SLECC
and its Affiliates Workers Union constituted a registered
labor organization at the time of SLECC's voluntary
recognition of SMSLEC. The dispositive portion of the
Secretary's Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the
Order of the Med-Arbiter dated 29 July 2002 is
64
REVERSED and SET ASIDE. Accordingly, let the entire
records of the case be remanded to the Regional Office of
origin for the immediate conduct of a certification election,
subject to the usual pre-election conference, among the
regular rank-and-file employees of [SLECC], with the
following choices:
1. Sta. Lucia East Commercial Corporation Workers'
Association - CLUP Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East
Commercial; andcralawlibrary
3. No Union.
Pursuant to Rule XI, Section II.1 of Department Order No.
9, appellee corporation is hereby directed to submit to the
office of origin, within ten (10) days from receipt hereof, the
certified list of its employees in the bargaining unit or when
necessary a copy of its payroll covering the same
employees for the last three (3) months preceding the
issuance of this Decision.
Let a copy of this Decision be furnished the Bureau of
Labor Relations and Labor Relations Division of Regional
Office No. IV for the cancellation of the recording of
voluntary recognition in favor of Samahang Manggagawa
sa Sta. Lucia East Commercial and the appropriate
annotation of re-registration of CLUP-Sta. Lucia East
Commercial Corporation and its Affiliates Workers Union
to Sta. Lucia East Commercial Corporation Workers
Association-CLUP Local Chapter.
SO DECIDED.5
SLECC filed a motion for reconsideration which the
Secretary denied for lack of merit in a Resolution dated 27
March 2003. SLECC then filed a petition
for certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary
and quoted extensively from the Secretary's decision. The
appellate court agreed with the Secretary's finding that the
workers sought to be represented by CLUP-SLECC and
its Affiliates Workers Union included the same workers in
the bargaining unit represented by SMSLEC. SMSLEC
was not the only legitimate labor organization operating in
the subject bargaining unit at the time of SMSLEC's
voluntary recognition on 20 July 2001. Thus, SMSLEC's
voluntary recognition was void and could not bar CLUP-
SLECCWA's petition for certification election.
The Issue
SLECC raised only one issue in its petition. SLECC
asserted that the appellate court commited a reversible
error when it affirmed the Secretary's finding that SLECC's
voluntary recognition of SMSLEC was done while a
legitimate labor organization was in existence in the
bargaining unit.
The Ruling of the Court
65
The petition has no merit. We see no reason to overturn
the rulings of the Secretary and of the appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor
organization 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." Upon compliance with all
the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the
roster of legitimate labor organizations.6 Any applicant
labor organization 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.7
Bargaining Unit
The concepts of a union and of a legitimate labor
organization are different from, but related to, the concept
of a bargaining unit. We explained the concept of a
bargaining unit in San Miguel Corporation v.
Laguesma,8 where we stated that:
A bargaining unit is a "group of employees of a given
employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer,
indicated to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining
provisions of the law."
The fundamental factors in determining the appropriate
collective bargaining unit are: (1) the will of the employees
(Globe Doctrine); (2) affinity and unity of the employees'
interest, such as substantial similarity of work and duties,
or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status.
Contrary to petitioner's assertion, this Court has
categorically ruled that the existence of a prior collective
bargaining history is neither decisive nor conclusive in the
determination of what constitutes an appropriate
bargaining unit.
However, employees in two corporations cannot be
treated as a single bargaining unit even if the businesses
of the two corporations are related.9
A Legitimate Labor Organization Representing
An Inappropriate Bargaining Unit
CLUP-SLECC and its Affiliates Workers Union's initial
problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining
unit. However, CLUP-SLECC and its Affiliates Workers
Union subsequently re-registered as CLUP-SLECCWA,
limiting its members to the rank-and-file of SLECC.
SLECC cannot ignore that CLUP-SLECC and its Affiliates
Workers Union was a legitimate labor organization at the
time of SLECC's voluntary recognition of SMSLEC.
SLECC and SMSLEC cannot, by themselves, decide
whether CLUP-SLECC and its Affiliates Workers Union
66
represented an appropriate bargaining
unit.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The inclusion in the union of disqualified employees is not
among the grounds for cancellation of registration, unless
such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections
(a) to (c) of Article 239 of the Labor Code.10 Thus, CLUP-
SLECC and its Affiliates Workers Union, having been
validly issued a certificate of registration, should be
considered as having acquired juridical personality which
may not be attacked collaterally. The proper procedure for
SLECC is to file a petition for cancellation of certificate of
registration11 of CLUP-SLECC and its Affiliates Workers
Union and not to immediately commence voluntary
recognition proceedings with SMSLEC.
SLECC's Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the
representation status of a union in unorganized
establishments.12 SLECC was not an unorganized
establishment when it voluntarily recognized SMSLEC as
its exclusive bargaining representative on 20 July 2001.
CLUP-SLECC and its Affiliates Workers Union filed a
petition for certification election on 27 February 2001 and
this petition remained pending as of 20 July 2001. Thus,
SLECC's voluntary recognition of SMSLEC on 20 July
2001, the subsequent negotiations and resulting
registration of a CBA executed by SLECC and SMSLEC
are void and cannot bar CLUP-SLECCWA's present
petition for certification election.
Employer's Participation in a Petition for Certification
Election
We find it strange that the employer itself, SLECC, filed a
motion to oppose CLUP-SLECCWA's petition for
certification election. In petitions for certification election,
the employer is a mere bystander and cannot oppose the
petition or appeal the Med-Arbiter's decision. The
exception to this rule, which happens when the employer
is requested to bargain collectively, is not present in the
case before us.13
WHEREFORE, we DENY the petition. We AFFIRM the
Decision promulgated on 14 August 2003 as well as the
Resolution promulgated on 24 February 2004 of the Court
of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.
SAMAHAN NG MGA MANGGAGAWA SA SAMMA-
LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG
ALYANSA (SAMMA-LIKHA), Petitioner, v. SAMMA
CORPORATION, Respondent.
DECISION
CORONA, J.:
This is a Petition for Review on Certiorari 1 of the August
31, 2004 decision2 and February 15, 2005 resolution3 of
the Court of Appeals (CA) in CA-G.R. SP No. 77156.
67
Petitioner Samahan ng mga Manggagawa sa Samma'
Lakas sa Industriya ng Kapatirang Haligi ng Alyansa
(SAMMA-LIKHA) filed a petition for certification election on
July 24, 2001 in the Department of Labor and Employment
(DOLE), Regional Office IV.4 It claimed that: (1) it was a
local chapter of the LIKHA Federation, a legitimate labor
organization registered with the DOLE; (2) it sought to
represent all the rank-and-file employees of respondent
Samma Corporation; (3) there was no other legitimate
labor organization representing these rank-and-file
employees; (4) respondent was not a party to any
collective bargaining agreement and (5) no certification or
consent election had been conducted within the employer
unit for the last 12 months prior to the filing of the petition.
Respondent moved for the dismissal of the petition
arguing that (1) LIKHA Federation failed to establish its
legal personality; (2) petitioner failed to prove its existence
as a local chapter; (3) it failed to attach the certificate of
non-forum shopping and (4) it had a prohibited mixture of
supervisory and rank-and-file employees.5
In an order dated November 12, 2002, med-arbiter Arturo
V. Cosuco ordered the dismissal of the petition on the
following grounds: (1) lack of legal personality for failure to
attach the certificate of registration purporting to show its
legal personality; (2) prohibited mixture of rank-and-file
and supervisory employees and (3) failure to submit a
certificate of non-forum shopping.6
Petitioner moved for reconsideration on November 29,
2001. The Regional Director of DOLE Regional Office IV
forwarded the case to the Secretary of Labor. Meanwhile,
on December 14, 2002, respondent filed a petition for
cancellation of petitioner's union registration in the DOLE
Regional Office IV.7
On January 17, 2003, Acting Secretary Manuel G. Imson,
treating the motion for reconsideration as an appeal,
rendered a decision reversing the order of the med-arbiter.
He ruled that the legal personality of a union cannot be
collaterally attacked but may only be questioned in an
independent petition for cancellation of registration. Thus,
he directed the holding of a certification election among
the rank-and-file employees of respondent, subject to the
usual pre-election conference and inclusion-exclusion
proceedings.8
On January 23, 2003 or six days after the issuance of said
decision, respondent filed its comment on the motion for
reconsideration of petitioner, asserting that the order of the
med-arbiter could only be reviewed by way of appeal and
not by a motion for reconsideration pursuant to
Department Order (D.O.) No. 9, series of 1997.9
On February 6, 2003, respondent filed its motion for
reconsideration of the January 17, 2003 decision. In a
resolution dated April 3, 2003, Secretary Patricia A. Sto.
Tomas denied the motion.10
Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr.,
Officer-in-Charge/Regional Director of DOLE Regional
Office IV, issued a resolution revoking the charter
certificate of petitioner as local chapter of LIKHA
Federation on the ground of prohibited mixture of
supervisory and rank-and-file employees and non-
68
compliance with the attestation clause under paragraph 2
of Article 235 of the Labor Code.11 On May 6, 2003,
petitioner moved for the reconsideration of this
resolution.12
Respondent filed a petition for certiorari 13 in the CA
assailing the January 17, 2003 decision and April 3, 2003
resolution of the Secretary of Labor. In a decision dated
August 31, 2004, the CA reversed the same.14 It denied
reconsideration in a resolution dated February 15, 2005. It
held that Administrative Circular No. 04-94 which required
the filing of a certificate of non-forum shopping applied to
petitions for certification election. It also ruled that the
Secretary of Labor erred in granting the appeal despite the
lack of proof of service on respondent. Lastly, it found that
petitioner had no legal standing to file the petition for
certification election because its members were a mixture
of supervisory and rank-and-file employees.15
Hence, this petition.
The issues for our resolution are the following: (1) whether
a certificate for non-forum shopping is required in a petition
for certification election; (2) whether petitioner's motion for
reconsideration which was treated as an appeal by the
Secretary of Labor should not have been given due course
for failure to attach proof of service on respondent and (3)
whether petitioner had the legal personality to file the
petition for certification election.
Requirement of Certificate
Of Non-Forum Shopping
Is Not Required in a Petition
For Certification Election
In ruling against petitioner, the CA declared that under
Administrative Circular No. 04-94,16 a certificate of non-
forum shopping was required in a petition for certification
election. The circular states:
The complaint and other initiatory pleadings referred to
and subject of this Circular are the original civil complaint,
counterclaim, cross-claim, third (fourth, etc.) party
complaint, or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief.
(Emphasis supplied)cralawlibrary
According to the CA, a petition for certification election
asserts a claim, i.e., the conduct of a certification election.
As a result, it is covered by the circular.17
We disagree.
The requirement for a certificate of non-forum shopping
refers to complaints, counter-claims, cross-claims,
petitions or applications where contending parties litigate
their respective positions regarding the claim for relief of
the complainant, claimant, petitioner or applicant. A
certification proceeding, even though initiated by a
"petition," is not a litigation but an investigation of a non-
adversarial and fact-finding character.18
Such proceedings are not predicated upon an
allegation of misconduct requiring relief, but, rather,
are merely of an inquisitorial nature. The Board's
69
functions are not judicial in nature, but are merely of an
investigative character. The object of the proceedings is
not the decision of any alleged commission of wrongs nor
asserted deprivation of rights but is merely the
determination of proper bargaining units and the
ascertainment of the will and choice of the employees in
respect of the selection of a bargaining representative.
The determination of the proceedings does not entail the
entry of remedial orders to redress rights, but culminates
solely in an official designation of bargaining units and an
affirmation of the employees' expressed choice of
bargaining agent.19 (Emphasis supplied)cralawlibrary
In Pena v. Aparicio,20 we ruled against the necessity of
attaching a certification against forum shopping to a
disbarment complaint. We looked into the rationale of the
requirement and concluded that the evil sought to be
avoided is not present in disbarment proceedings.
'[The] rationale for the requirement of a certification
against forum shopping is to apprise the Court of the
pendency of another action or claim involving the same
issues in another court, tribunal or quasi-judicial agency,
and thereby precisely avoid the forum shopping situation.
Filing multiple petitions or complaints constitutes abuse of
court processes, which tends to degrade the
administration of justice, wreaks havoc upon orderly
judicial procedure, and adds to the congestion of the
heavily burdened dockets of the courts. Furthermore, the
rule proscribing forum shopping seeks to promote candor
and transparency among lawyers and their clients in the
pursuit of their cases before the courts to promote the
orderly administration of justice, prevent undue
inconvenience upon the other party, and save the precious
time of the courts. It also aims to prevent the embarrassing
situation of two or more courts or agencies rendering
conflicting resolutions or decisions upon the same issue.
It is in this light that we take a further look at the necessity
of attaching a certification against forum shopping to a
disbarment complaint. It would seem that the scenario
sought to be avoided, i.e., the filing of multiple suits
and the possibility of conflicting decisions, rarely
happens in disbarment complaints considering that
said proceedings are either "taken by the Supreme
Court motu proprio, or by the Integrated Bar of the
Philippines (IBP) upon the verified complaint of any
person." Thus, if the complainant in a disbarment case
fails to attach a certification against forum shopping, the
pendency of another disciplinary action against the same
respondent may still be ascertained with
ease.21 (Emphasis supplied)cralawlibrary
The same situation holds true for a petition for certification
election. Under the omnibus rules implementing the Labor
Code as amended by D.O. No. 9,22 it is supposed to be
filed in the Regional Office which has jurisdiction over the
principal office of the employer or where the bargaining
unit is principally situated.23 The rules further provide that
where two or more petitions involving the same bargaining
unit are filed in one Regional Office, the same shall be
automatically consolidated.24 Hence, the filing of multiple
suits and the possibility of conflicting decisions will rarely
happen in this proceeding and, if it does, will be easy to
discover.
70
Notably, under the Labor Code and the rules pertaining to
the form of the petition for certification election, there is no
requirement for a certificate of non-forum shopping either
in D.O. No. 9, series of 1997 or in D.O. No. 40-03, series
of 2003 which replaced the former.25
Considering the nature of a petition for certification
election and the rules governing it, we therefore hold that
the requirement for a certificate of non-forum shopping is
inapplicable to such a petition.
Treatment of Motion for Reconsideration as an Appeal
The CA ruled that petitioner's motion for reconsideration,
which was treated as an appeal by the Secretary of Labor,
should not have been given due course for lack of proof of
service in accordance with the implementing rules as
amended by D.O. No. 9:
Section 12. Appeal; finality of decision. - The decision of
the Med-Arbiter may be appealed to the Secretary for any
violation of these Rules. Interloculory orders issued by the
Med-Arbiter prior to the grant or denial of the petition,
including order granting motions for intervention issued
after an order calling for a certification election, shall not
be appealable. However, any issue arising therefrom may
be raised in the appeal on the decision granting or denying
the petition.
The appeal shall be under oath and shall consist of a
memorandum of appeal specifically stating the grounds
relied upon by the appellant with the supporting arguments
and evidence. The appeal shall be deemed not filed
unless accompanied by proof of service thereof to
appellee.26 (Emphasis supplied)cralawlibrary
In accepting the appeal, the Secretary of Labor stated:
[Petitioner's] motion for reconsideration of the Med-
Arbiter's Order dated November 12, 2002 was verified
under oath by [petitioner's] president Gil Dispabiladeras
before Notary Public Wilfredo A. Ruiz on 29 November
2002, and recorded in the Notarial Register under
Document No. 186, Page No. 38, Book V, series of 2002.
On page 7 of the said motion also appears the notation
"copy of respondent to be delivered personally with the
name and signature of one Rosita Simon, 11/29/02." The
motion contained the grounds and arguments relied
upon by [petitioner] for the reversal of the assailed Order.
Hence, the motion for reconsideration has complied with
the formal requisites of an appeal.
The signature of Rosita Simon appearing on the last page
of the motion can be considered as compliance with the
required proof of service upon respondent. Rosita
Simon's employment status was a matter that should have
been raised earlier by [respondent]. But [respondent] did
not question the same and slept on its right to oppose or
comment on [petitioner's] motion for reconsideration. It
cannot claim that it was unaware of the filing of the
appeal by [petitioner], because a copy of the indorsement
of the entire records of the petition to the Office of the
Secretary "in view of the memorandum of appeal filed by
Mr. Jesus B. Villamor" was served upon the employer and
legal counsels Atty. Ismael De Guzman and Atty. Anatolio
Sabillo at the Samma Corporation Office, Main Avenue,
71
PEZA, Rosario, Cavite on December 5,
27
2002. (Emphasis supplied)cralawlibrary
The motion for reconsideration was properly treated as an
appeal because it substantially complied with the formal
requisites of the latter. The lack of proof of service was not
fatal as respondent had actually received a copy of the
motion. Consequently, it had the opportunity to oppose the
same. Under these circumstances, we find that the
demands of substantial justice and due process were
satisfied.
We stress that rules of procedure are interpreted liberally
to secure a just, speedy and inexpensive disposition of
every action. They should not be applied if their application
serves no useful purpose or hinders the just and speedy
disposition of cases. Specifically, technical rules and
objections should not hamper the holding of a certification
election wherein employees are to select their bargaining
representative. A contrary rule will defeat the declared
policy of the Stateςηαñrοblεš νιr†υαl lαω lιbrαrÿ
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 organizations and workers'
associations, determination of representation status,
and resolution of intra and inter-union disputes.28 xxx
(Emphasis supplied)cralawlibrary
Legal Personality of Petitioner
Petitioner argues that the erroneous inclusion of one
supervisory employee in the union of rank-and-file
employees was not a ground to impugn its legitimacy as a
legitimate labor organization which had the right to file a
petition for certification election.
We agree.
LIKHA was granted legal personality as a federation under
certificate of registration no. 92-1015-032-11638-FED-LC.
Subsequently, petitioner as its local chapter was issued its
charter certificate no. 2-01.29 With certificates of
registration issued in their favor, they are clothed with legal
personality as legitimate labor organizations:
Section 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.30
-0-
Section 3. Acquisition of legal personality by local
chapter. - A local/chapter constituted in accordance with
Section 1 of this Rule shall acquire legal personality from
the date of filing of the complete documents enumerated
therein. Upon compliance with all the documentary
requirements, the Regional Office or Bureau of Labor
Relations shall issue in favor of the local/chapter a
72
certificate indicating that it is included in the roster of
legitimate labor organizations.31
Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of
registration.32 Unless petitioner's union registration is
cancelled in independent proceedings, it shall continue to
have all the rights of a legitimate labor organization,
including the right to petition for certification election.
Furthermore, the grounds for dismissal of a petition for
certification election based on the lack of legal personality
of a labor organization are the following: (a) petitioner is
not listed by the Regional Office or the Bureau of Labor
Relations in its registry of legitimate labor organizations or
(b) its legal personality has been revoked or cancelled with
finality in accordance with the rules.33
As mentioned, respondent filed a petition for cancellation
of the registration of petitioner on December 14, 2002. In
a resolution dated April 14, 2003, petitioner's charter
certificate was revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this resolution.
Neither of the parties alleged that this resolution revoking
petitioner's charter certificate had attained finality.
However, in this petition, petitioner prayed that its charter
certificate be "reinstated in the roster of active legitimate
labor [organizations]."34 This cannot be granted here. To
repeat, the proceedings on a petition for cancellation of
registration are independent of those of a petition for
certification election. This case originated from the latter.
If it is shown that petitioner's legal personality had already
been revoked or cancelled with finality in accordance
with the rules, then it is no longer a legitimate labor
organization with the right to petition for a certification
election.
A Final Note
Respondent, as employer, had been the one opposing the
holding of a certification election among its rank-and-file
employees. This should not be the case. We have already
declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the
certification election.35
[This] Court notes that it is petitioner, the employer, which
has offered the most tenacious resistance to the holding
of a certification election among its monthly-paid rank-and-
file employees. This must not be so, for the choice of a
collective bargaining agent is the sole concern of the
employees. The only exception to this rule is where the
employer has to file the petition for certification election
pursuant to Article 258 of the Labor Code because it was
requested to bargain collectively, which exception finds no
application in the case before us. Its role in a certification
election has aptly been described in Trade Unions of the
Philippines and Allied Services (TUPAS) v. Trajano, as
that of a mere bystander. It has no legal standing in a
certification election as it cannot oppose the petition or
appeal the Med-Arbiter's orders related thereto. . .36
WHEREFORE, the petition is hereby GRANTED. Let the
records of the case be remanded to the office of origin, the
Regional Office IV of the Department of Labor and
73
Employment, for determination of the status of petitioner's
legal personality. If petitioner is still a legitimate labor
organization, then said office shall conduct a certification
election subject to the usual pre-election conference.
SO ORDERED.
CHRIS GARMENTS
CORPORATION, Petitioner, v. HON. PATRICIA A. STO.
TOMAS and CHRIS GARMENTS WORKERS UNION-
PTGWO LOCAL CHAPTER No. 832, Respondents.
DECISION
QUISUMBING, J.:
Petitioner assails the Resolutions dated February 22,
20051 and March 16, 20052 of the Court of Appeals in CA-
G.R. SP No. 88444, which dismissed its petition
for certiorari due to its failure to file a motion for
reconsideration from the Decision3 of the Secretary of the
Department of Labor and Employment before filing the
petition.
The relevant facts are as follows:
Petitioner Chris Garments Corporation is engaged in the
manufacture and export of quality garments and apparel.
On February 8, 2002, respondent Chris Garments
Workers Union PTGWO, Local Chapter No. 832, filed a
petition for certification election with the Med-Arbiter. The
union sought to represent petitioner s rank-and-file
employees not covered by its Collective Bargaining
Agreement (CBA) with the Samahan Ng Mga
Manggagawa sa Chris Garments Corporation Solidarity of
Union in the Philippines for Empowerment and Reforms
(SMCGC-SUPER), the certified bargaining agent of the
rank-and-file employees. The union alleged that it is a
legitimate labor organization with a Certificate of Creation
of Local/Chapter No. PTGWO-8324 dated January 31,
2002 issued by the Bureau of Labor Relations.5
Petitioner moved to dismiss the petition. It argued that it
has an existing CBA from July 1, 1999 to June 30, 2004
with SMCGC-SUPER which bars any petition for
certification election prior to the 60-day freedom period. It
also contended that the union members are not its regular
employees since they are direct employees of qualified
and independent contractors.6
The union countered that its members are regular
employees of petitioner since: (1) they are engaged in
activities necessary and desirable to its main business
although they are called agency employees; (2) their
length of service have spanned an average of four years;
(3) petitioner controlled their work attitude and
performance; and (4) petitioner paid their salaries. The
union added that while there is an existing CBA between
petitioner and SMCGC-SUPER, there are other rank-and-
file employees not covered by the CBA who seek
representation for collective bargaining purposes. It also
contended that the contract bar rule does not apply.7
74
The Med-Arbiter dismissed the petition. The Med-Arbiter
ruled that there was no employer-employee relationship
between the parties since the union itself admitted that its
members are agency employees. The Med-Arbiter also
held that even if the union members are considered direct
employees of petitioner, the petition for certification
election will still fail due to the contract bar rule under
Article 2328 of the Labor Code. Hence, a petition could
only be filed during the 60-day freedom period of the CBA
or from May 1, 2004 to June 30, 2004. Nevertheless, the
Med-Arbiter ruled that the union may avail of the CBA
benefits by paying agency fees to SMCGC-SUPER.9
In a Resolution10 dated December 27, 2002, the Secretary
of Labor and Employment affirmed the decision of the
Med-Arbiter. She ruled that petitioner failed to prove that
the union members are employees of qualified and
independent contractors with substantial capital or
investment and added that petitioner had the right to
control the performance of the work of such employees.
She also noted that the union members are garment
workers who performed activities directly related to
petitioner s main business. Thus, the union members may
be considered part of the bargaining unit of petitioner s
rank-and-file employees. However, she held that the
petition could not be entertained except during the 60-day
freedom period. She also found no reason to split
petitioner s bargaining unit.
On May 16, 2003, the union filed a second petition for
certification election.The Med-Arbiter dismissed the
petition on the ground that it was barred by a prior
judgment. On appeal, the Secretary of Labor and
Employment affirmed the decision of the Med-Arbiter.11
On June 4, 2004, the union filed a third petition for
certification election.12 The Med-Arbiter dismissed the
petition on the grounds that no employer-employee
relationship exists between the parties and that the case
was barred by a prior judgment. On appeal, the Secretary
of Labor and Employment granted the petition in a
Decision13 dated January 18, 2005. Thus:
WHEREFORE, the appeal filed by Chris Garment[s]
Workers Union PTGWO is hereby GRANTED. The 7 July
2004 Order of Med-Arbiter Tranquilino B. Reyes is
hereby REVERSED and SET ASIDE. Accordingly, let the
entire records of the case be remanded to the Regional
Office of origin for the immediate conduct of a certification
election, subject to the usual pre-election conference,
among the regular rank-and-file employees of Chris
Garments Corporation, with the following choices:
1. Chris Garments Workers Union PTGWO Local
Chapter No. 832;
2. Samahan ng Manggagawa sa Chris Garments Corp.
SUPER; andcralawlibrary
3. No Union.
Pursuant to Section 13(e), Rule VIII of Department Order
No. 40-03, the employer is hereby directed to submit to the
office of origin, within ten (10) days from receipt hereof, the
certified list of its employees in the bargaining unit or when
75
necessary a copy of its payroll covering the same
employees for the last three (3) months preceding the
issuance of this Decision.
SO DECIDED.14
Petitioner received a copy of the decision on January 25,
2005. On February 4, 2005, petitioner filed a petition
for certiorari with the Court of Appeals which was
dismissed due to its failure to file a motion for
reconsideration of the decision before filing the petition.
Incidentally, a certification election was conducted on June
21, 2005 among petitioner s rank-and-file employees
where SMCGC-SUPER emerged as the winning union.
On January 20, 2006, the Med-Arbiter certified SMCGC-
SUPER as the sole and exclusive bargaining agent of all
the rank-and-file employees of petitioner.15
Petitioner now comes before us arguing that:
I.
THE COURT OF APPEALS SERIOUSLY ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION IN
DISMISSING THE PETITION [FOR CERTIORARI] ON
THE SOLE GROUND THAT THE COMPANY DID NOT
FILE A MOTION FOR RECONSIDERATION DESPITE
SECTION 21, RULE VIII OF DEPARTMENT ORDER NO.
43-03, . . . SERIES OF 2003, [WHICH] PROHIBITS THE
FILING OF A MOTION FOR RECONSIDERATION FROM
A DECISION OF THE SECRETARY OF LABOR.
II. PUBLIC RESPONDENT SERIOUSLY ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION IN NOT
THE COURT OF APPEALS SERIOUSLY ERRED AND DISMISSING OUTRIGHT THE APPEAL OF PRIVATE
COMMITTED GRAVE ABUSE OF DISCRETION IN RESPONDENT FOR FAILURE TO SUBMIT A
REFUSING TO RESOLVE THE MERITS OF THE CERTIFICATION AGAINST FORUM SHOPPING.16
PETITION AS IT DISMISSED THE SAME BY MERE,
ALBEIT, BASELESS TECHNICALITY WHICH ONLY The principal issues are: (1) Is a motion for reconsideration
FRUSTRATED RATHER THAN PROMOTED necessary before a party can file a petition
SUBSTANTIAL JUSTICE . . . for certiorari from the decision of the Secretary of Labor
and Employment? (2) Is the case barred by res judicata or
III. conclusiveness of judgment? and (3) Is there an employer-
employee relationship between petitioner and the union
PUBLIC RESPONDENT SERIOUSLY ERRED AND members?cralawred
COMMITTED GRAVE ABUSE OF DISCRETION IN
REVERSING THE DECISION OF THE MED-ARBITER First. It is settled that the filing of a motion for
AND GIVING [DUE] COURSE TO THE PETITION FOR reconsideration is a prerequisite to the filing of a special
CERTIFICATION ELECTION FILED BY PRIVATE civil action for certiorari to give the lower court the
RESPONDENT CGWU-PTGWO DESPITE THE opportunity to correct itself.17 This rule, however, admits of
ABSENCE OF ANY EMPLOYER-EMPLOYEE exceptions, such as when a motion for reconsideration
RELATIONSHIP BETWEEN THE COMPANY AND ITS would be useless under the circumstances.18
MEMBERS.
Under Department Order No. 40-03, Series of 2003,19 the
IV. decision of the Secretary of Labor and Employment shall
be final and executory after ten days from receipt thereof
PUBLIC RESPONDENT SERIOUSLY ERRED AND by the parties and that it shall not be subject of a motion
COMMITTED GRAVE ABUSE OF DISCRETION IN for reconsideration.
REVERSING THE FINDINGS OF THE MED-ARBITER
THAT THE PETITION FOR CERTIFICATION ELECTION In this case, the Decision dated January 18, 2005 of the
WAS BARRED BY RES JUDICATA AND/OR THE Secretary of Labor and Employment was received by
PRINCIPLE OF CONCLUSIVENESS OF JUDGMENT. petitioner on January 25, 2005. It would have become final
and executory on February 4, 2005, the tenth day from
V. petitioner s receipt of the decision. However, petitioner
filed a petition for certiorari with the Court of Appeals on

76
even date. Clearly, petitioner availed of the proper remedy
since Department Order No. 40-03 explicitly prohibits the
filing of a motion for reconsideration. Such motion
becomes dispensable and not at all necessary.
Second. The doctrine of res judicata provides that a final
judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their
privies in all later suits on points and matters determined
in the former suit.20 The elements of res judicata are: (1)
the judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties;
(3) the disposition of the case must be a judgment on the
merits; and (4) there must be as between the first and
second action, identity of parties, subject matter, and
causes of action.21
Res judicata has a dual aspect: first, "bar by prior
judgment" which is provided in Rule 39, Section 47(b)22 of
the 1997 Rules of Civil Procedure and second,
"conclusiveness of judgment" which is provided in Section
47(c)23 of the same Rule.
There is "bar by prior judgment" when, as between the first
case where the judgment was rendered, and the second
case that is sought to be barred, there is identity of parties,
subject matter, and causes of action.24 In this instance, the
judgment in the first case constitutes an absolute bar to
the second action. Otherwise put, the judgment or decree
of the court of competent jurisdiction on the merits
concludes the litigation between the parties, as well as
their privies, and constitutes a bar to a new action or suit
77
involving the same cause of action before the same or any
other tribunal.25
On the other hand, the doctrine of "conclusiveness of
judgment" provides that issues actually and directly
resolved in a former suit cannot again be raised in any
future case between the same parties involving a different
cause of action. Under this doctrine, identity of causes of
action is not required but merely identity of issues.
Otherwise stated, conclusiveness of judgment bars the
relitigation of particular facts or issues in another litigation
between the same parties on a different claim or cause of
action.26
In the instant case, there is no dispute as to the presence
of the first three elements of res judicata. The Resolution
dated December 27, 2002 of the Secretary of Labor and
Employment on the first petition for certification election
became final and executory. It was rendered on the merits
and the Secretary of Labor and Employment had
jurisdiction over the case. Now, is the fourth element
identity of parties, subject matter, and causes of action
between the first and third petitions for certification election
present? We hold in the negative.
The Secretary of Labor and Employment dismissed the
first petition as it was filed outside the 60-day freedom
period. At that time therefore, the union has no cause of
action since they are not yet legally allowed to challenge
openly and formally the status of SMCGC-SUPER as the
exclusive bargaining representative of the bargaining unit.
Such dismissal, however, has no bearing in the instant
case since the third petition for certification election was
filed well within the 60-day freedom period. Otherwise
stated, there is no identity of causes of action to speak of
since in the first petition, the union has no cause of action
while in the third, a cause of action already exists for the
union as they are now legally allowed to challenge the
status of SMCGC-SUPER as exclusive bargaining
representative.
Third. The matter of employer-employee relationship has
been resolved with finality by the Secretary of Labor and
Employment in the Resolution dated December 27, 2002.
Since petitioner did not appeal this factual finding, then, it
may be considered as the final resolution of such issue. To
reiterate, "conclusiveness of judgment" has the effect of
preclusion of issues.27
WHEREFORE, the instant petition is DENIED for lack of
merit.
SO ORDERED.
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
78
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 Decision 1 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.
Simonette Calabocal to decide which among those votes
would be opened and tallied. Eleven (11) votes were
initially segregated because they were
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 probationary employees and, pursuant to the existing
Collective Bargaining Agreement (CBA), such employees
cannot vote. It bears noting early on, 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.
cast 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
79
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.
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.
80
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.
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
81
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 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
82
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:
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:
83
(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.
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 th
e Order of the Secretary of Labor and Employment,
whether affirming or denying the appeal, becomes final a
nd executory.
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
84
(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 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.
85
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
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.
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
86
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
Decision3 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,6 and 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
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
87
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-
15
Calleja and Oriental Tin Can Labor Union v.
Secretary of Labor and Employment,16 it can be
presumed that "duress, coercion or valuable
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-Samang Sinumpaang
19
Salaysay dated March 20, 2006 of eight union members;
another Sama-Samang Sinumpaang 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.
88
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-Samang Sinumpaang
24
Salaysay 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
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:
89
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.
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
90
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 x x x
xxxx
xxxx
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 x x, or any
other tribunal or agency; if there is such other action or
proceeding, he must state the status of the same x x x.
xxxx
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.
91
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 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
92
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
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. 9481 40 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:
93
(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;
xxxx
(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
xxxx
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;
xxxx
 (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;
94
(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, Annalyn
Poniente and Rowel Dolendo;
(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 Certifications50 by 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.
95
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.
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
96
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 affiant during 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 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
97
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.
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;
98
(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 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
54
discretion." 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
99
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.
Costs against petitioner.
SO ORDERED.
PICOP RESOURCES, INCORPORATED
(PRI), Petitioner,
vs.
ANACLETO L. TAÑECA, GEREMIAS S. TATO, JAIME
N. CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B.
BALGOA, MANUEL G. ABUCAY, MOISES M.
ALBARAN, MARGARITO G. ALICANTE, JERRY
ROMEO T. AVILA, LORENZO D. CANON, RAUL P.
DUERO, DANILO Y. ILAN, MANUEL M. MATURAN, JR.,
LUISITO R. POPERA, CLEMENTINO C. QUIMAN,
ROBERTO Q. SILOT, CHARLITO D. SINDAY,
REMBERT B. SUZON ALLAN J. TRIMIDAL, and
NAMAPRI-SPFL, Respondents.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court seeking the reversal of the
Decision1 dated July 25, 2003 and Resolution2 dated
October 23, 2003 of the Court of Appeals in CA-G.R. SP
No. 71760, setting aside the Resolutions dated October 8,
20013 and April 29, 20024 of the National Labor Relations
Commission in NLRC CA No. M-006309-2001 and
reinstating the Decision5 dated March 16, 2001 of the
Labor Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Tañeca,
Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias
Tato, Martiniano Magayon, Manuel Abucay and fourteen
(14) others filed a Complaint for unfair labor practice,
illegal dismissal and money claims against petitioner
PICOP Resources, Incorporated (PRI), Wilfredo Fuentes
(in his capacity as PRI's Vice President/Resident
Manager), Atty. Romero Boniel (in his capacity as PRI's
Manager of Legal/Labor), Southern Philippines Federation
of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity
as Secretary General of SPFL), Pascasio Trugillo (in his
capacity as Local President of Nagkahiusang Mamumuo
sa PICOP Resources, Inc.- SPFL [NAMAPRI-SPFL]) and
100
Atty. Proculo Fuentes, Jr.6 (in his capacity as National
President of SPFL).
Respondents were regular rank-and-file employees of PRI
and bona fide members of Nagkahiusang Mamumuo
sa PRI Southern Philippines Federation of Labor
(NAMAPRI-SPFL), which is the collective bargaining
agent for the rank-and-file employees of petitioner PRI.
PRI has a collective bargaining agreement (CBA) with
NAMAPRI-SPFL for a period of five (5) years from May 22,
1995 until May 22, 2000.
The CBA contained the following union security
provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate
bargaining unit who are members of the
UNION at the time of the signing of this
AGREEMENT shall, as a condition of
continued employment by the
COMPANY, maintain their membership in
the UNION in good standing during the
effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be
employed to occupy a position covered by
the bargaining unit shall be advised by the
COMPANY that they are required to file an
 application for membership with the UNION
within thirty (30) days from the date his
appointment shall have been made regular.
6.3 The COMPANY, upon the written
request of the UNION and after
compliance with the requirements of the
New Labor Code, shall give notice of
termination of services of any employee
who shall fail to fulfill the condition
provided in Section 6.1 and 6.2 of this
Article, but it assumes no obligation to
discharge any employee if it has reasonable
grounds to believe either that membership in
the UNION was not available to the
employee on the same terms and conditions
generally applicable to other members, or
that membership was denied or terminated
for reasons other than voluntary resignation
or non-payment of regular union dues.
Separation under the Section is understood
to be for cause, consequently, the dismissed
employee is not entitled to separation
benefits provided under the New Labor Code
and in this AGREEMENT."7
On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes)
sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for,
supported and signed the Petition for Certification Election
of the Federation of Free Workers Union (FFW) during the
effectivity of the CBA. NAMAPRI-SPFL considered said
act of campaigning for and signing the petition for
101
certification election of FFW as an act of disloyalty and a
valid basis for termination for a cause in accordance with
its Constitution and By-Laws, and the terms and conditions
of the CBA, specifically Article II, Sections 6.1 and 6.2 on
Union Security Clause.
In a letter dated May 23, 2000, Mr. Pascasio Trugillo
requested the management of PRI to investigate those
union members who signed the Petition for Certification
Election of FFW during the existence of their CBA.
NAMAPRI-SPFL, likewise, furnished PRI with machine
copy of the authorization letters dated March 19, 20 and
21, 2000, which contained the names and signatures of
employees.
Acting on the May 16 and May 23, 2000 letters of the
NAMAPRI-SPFL, Atty. Romero A. Boniel issued a
memorandum addressed to the concerned employees to
explain in writing within 72 hours why their employment
should not be terminated due to acts of disloyalty as
alleged by their Union.
Within the period from May 26 to June 2, 2000, a number
of employees who were served "explanation
memorandum" submitted their explanation, while some
did not.
In a letter dated June 2, 2000, Atty. Boniel endorsed the
explanation letters of the employees to Atty. Fuentes for
evaluation and final disposition in accordance with the
CBA.
After evaluation, in a letter dated July 12, 2000, Atty.
Fuentes advised the management of PRI that the Union
found the member's explanations to be unsatisfactory. He
reiterated the demand for termination, but only of 46
member-employees, including respondents.
On October 16, 2000, PRI served notices of termination
for causes to the 31 out of the 46 employees whom
NAMAPRIL-SPFL sought to be terminated on the ground
of "acts of disloyalty" committed against it when
respondents allegedly supported and signed the Petition
for Certification Election of FFW before the "freedom
period" during the effectivity of the CBA. A Notice dated
October 21, 2000 was also served on the Department of
Labor and Employment Office (DOLE), Caraga Region.
Respondents then accused PRI of Unfair Labor Practice
punishable under Article 248 (a), (b), (c), (d) and (e) of the
Labor Code, while Atty. Fuentes and Wilbur T. Fuentes
and Pascasio Trujillo were accused of violating Article 248
(a) and (b) of the Labor Code.
Respondents alleged that none of them ever withdrew
their membership from NAMAPRI-SPFL or submitted to
PRI any union dues and check-off disauthorizations
against NAMAPRI-SPFL. They claimed that they continue
to remain on record as bona fide members of NAMAPRI-
SPFL. They pointed out that a patent manifestation of
one’s disloyalty would have been the explicit resignation
or withdrawal of membership from the Union accompanied
by an advice to management to discontinue union dues
and check-off deductions. They insisted that mere
affixation of signature on such authorization to file a
102
petition for certification election was not per se an act of
disloyalty. They claimed that while it may be true that they
signed the said authorization before the start of the
freedom period, the petition of FFW was only filed with the
DOLE on May 18, 2000, or 58 days after the start of the
freedom period.
Respondents maintained that their acts of signing the
authorization signifying support to the filing of a Petition for
Certification Election of FFW was merely prompted by
their desire to have a certification election among the rank-
and-file employees of PRI with hopes of a CBA negotiation
in due time; and not to cause the downfall of NAMAPRI-
SPFL.
Furthermore, respondents contended that there was lack
of procedural due process. Both the letter dated May 16,
2000 of Atty. Fuentes and the follow-up letter dated May
23, 2000 of Trujillo addressed to PRI did not mention their
names. Respondents stressed that NAMAPRI-SPFL
merely requested PRI to investigate union members who
supported the Petition for Certification Election of FFW.
Respondents claimed that they should have been
summoned individually, confronted with the accusation
and investigated accordingly and from where the Union
may base its findings of disloyalty and, thereafter,
recommend to management the termination for
causes.1avvphi1
Respondents, likewise, argued that at the time NAMAPRI-
SPFL demanded their termination, it was no longer the
bargaining representative of the rank-and-file workers of
PRI, because the CBA had already expired on May 22,
2000. Hence, there could be no justification in PRI’s act of
dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI, Wilfredo
Fuentes and Atty. Boniel in giving in to the wishes of the
Union in discharging them on the ground of disloyalty to
the Union amounted to interference with, restraint or
coercion of respondents’ exercise of their right to self-
organization. The act indirectly required petitioners to
support and maintain their membership with NAMAPRI-
SPFL as a condition for their continued employment. The
acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo
amounted to actual restraint and coercion of the
petitioners in the exercise of their rights to self-
organization and constituted acts of unfair labor practice.
In a Decision8 dated March 16, 2001, the Labor Arbiter
declared the respondents’ dismissal to be illegal and
ordered PRI to reinstate respondents to their former or
equivalent positions without loss of seniority rights and to
jointly and solidarily pay their backwages. The dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby
entered:
1. Declaring complainants’ dismissal illegal; and
2. Ordering respondents Picop Resources Inc.
(PRI) and NAMAPRI-SPFL to reinstate
complainants to their former or equivalent positions
without loss of seniority rights and to jointly and
solidarily pay their backwages in the total amount of
103
₱420,339.30 as shown in the said Annex "A" plus
damages in the amount of ₱10,000.00 each, or a
total of ₱210,000.00 and attorney’s fees equivalent
to 10% of the total monetary award.
SO ORDERED.9
PRI and NAMAPRI-SPFL appealed to the National Labor
Relations Commission (NLRC), which reversed the
decision of the Labor Arbiter; thus, declaring the dismissal
of respondents from employment as legal.
Respondents filed a motion for reconsideration, but it was
denied on April 29, 2001 for lack of merit.
Unsatisfied, respondents filed a petition
for certiorari under Rule 65 before the Court of Appeals
and sought the nullification of the Resolution of the NLRC
dated October 8, 2001 which reversed the Decision dated
March 16. 2001 of Labor Arbiter and the Resolution dated
April 29, 2002, which denied respondent’s motion for
reconsideration.
On July 25, 2003, the Court of Appeals reversed and set
aside the assailed Resolutions of the NLRC and reinstated
the Decision dated March 16, 2001 of the Labor Arbiter.
Thus, before this Court, PRI, as petitioner, raised the
following issues:
I
WHETHER AN EXISTING COLLECTIVELY (sic)
BARGAINING AGREEMENT (CBA) CAN BE GIVEN ITS
FULL FORCE AND EFFECT IN ALL ITS TERMS AND
CONDITION INCLUDING ITS UNION SECURITY
CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN
NO NEW CBA HAS YET BEEN ENTERED INTO.
II
WHETHER OR NOT AN HONEST ERROR IN THE
INTERPRETATION AND/OR CONCLUSION OF LAW
FALL WITHIN THE AMBIT OF THE EXTRAORDINARY
REMEDY OF CERTIORARI UNDER RULE 65, REVISED
RULES OF COURT.10
We will first delve on the technical issue raised.
PRI perceived a patent error in the mode of appeal elected
by respondents for the purpose of assailing the decision of
the NLRC. It claimed that assuming that the NLRC erred
in its judgment on the legal issues, its error, if any, is not
tantamount to abuse of discretion falling within the ambit
of Rule 65.
Petitioner is mistaken.
The power of the Court of Appeals to review NLRC
decisions via Rule 65 or Petition for Certiorari has been
settled as early as in our decision in St. Martin Funeral
Home v. National Labor Relations Commission.11 This
Court held that the proper vehicle for such review was a
Special Civil Action for Certiorari under Rule 65 of the
Rules of Court, and that this action should be filed in the
104
Court of Appeals in strict observance of the doctrine of the
hierarchy of courts.12 Moreover, it is already settled that
under Section 9 of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902[10] (An Act Expanding
the Jurisdiction of the Court of Appeals, amending for the
purpose of Section Nine of Batas Pambansa Blg. 129 as
amended, known as the Judiciary Reorganization Act of
1980), the Court of Appeals – pursuant to the exercise of
its original jurisdiction over Petitions for Certiorari – is
specifically given the power to pass upon the evidence, if
and when necessary, to resolve factual issues. 13
We now come to the main issue of whether there was just
cause to terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid
and legal. It claimed to have acted in good faith at the
instance of the incumbent union pursuant to the Union
Security Clause of the CBA.
Citing Article 253 of the Labor Code,14 PRI contends that
as parties to the CBA, they are enjoined to keep the status
quo and continue in full force and effect the terms and
conditions of the existing CBA during the 60-day period
and/or until a new agreement is reached by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and
comprehends "closed shop," "union shop," "maintenance
of membership," or any other form of agreement which
imposes upon employees the obligation to acquire or
retain union membership as a condition affecting
employment. There is union shop when all new regular
employees are required to join the union within a certain
period as a condition for their continued employment.
There is maintenance of membership shop when
employees, who are union members as of the effective
date of the agreement, or who thereafter become
members, must maintain union membership as a condition
for continued employment until they are promoted or
transferred out of the bargaining unit, or the agreement is
terminated. A closed shop, on the other hand, may be
defined as an enterprise in which, by agreement between
the employer and his employees or their representatives,
no person may be employed in any or certain agreed
departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains
a member in good standing of a union entirely comprised
of or of which the employees in interest are a part.15
However, in terminating the employment of an employee
by enforcing the union security clause, the employer
needs to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA;
and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These
requisites constitute just cause for terminating an
employee based on the union security provision of the
CBA.16
As to the first requisite, there is no question that the CBA
between PRI and respondents included a union security
clause, specifically, a maintenance of membership as
stipulated in Sections 6 of Article II, Union Security and
105
Check-Off. Following the same provision, PRI, upon
written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its
good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL,
in two (2) occasions demanded from PRI, in their letters
dated May 16 and 23, 2000, to terminate the employment
of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no
sufficient evidence to support the decision of PRI to
terminate the employment of the respondents.
PRI alleged that respondents were terminated from
employment based on the alleged acts of disloyalty they
committed when they signed an authorization for the
Federation of Free Workers (FFW) to file a Petition for
Certification Election among all rank-and-file employees of
PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their
Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it
held that the mere signing of the authorization in support
of the Petition for Certification Election of FFW on March
19, 20 and 21, or before the "freedom period," is not
sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually
filed during the freedom period. Nothing in the records
would show that respondents failed to maintain their
membership in good standing in the Union. Respondents
did not resign or withdraw their membership from the
Union to which they belong. Respondents continued to
pay their union dues and never joined the FFW.
Significantly, petitioner's act of dismissing respondents
stemmed from the latter's act of signing an authorization
letter to file a petition for certification election as they
signed it outside the freedom period. However, we are
constrained to believe that an "authorization letter to file a
petition for certification election" is different from an actual
"Petition for Certification Election." Likewise, as per
records, it was clear that the actual Petition for Certification
Election of FFW was filed only on May 18, 2000.17 Thus, it
was within the ambit of the freedom period which
commenced from March 21, 2000 until May 21, 2000.
Strictly speaking, what is prohibited is the filing of a petition
for certification election outside the 60-day freedom
period.18 This is not the situation in this case. If at all, the
signing of the authorization to file a certification election
was merely preparatory to the filing of the petition for
certification election, or an exercise of respondents’ right
to self-organization.
Moreover, PRI anchored their decision to terminate
respondents’ employment on Article 253 of the Labor
Code which states that "it shall be the duty of both
parties to keep the status quo and to continue in full
force and effect the terms and conditions of the
existing agreement during the 60-day period and/or
until a new agreement is reached by the parties." It
claimed that they are still bound by the Union Security
Clause of the CBA even after the expiration of the CBA;
106
hence, the need to terminate the employment of
respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is
particularly enlightening. It reads:
Article 256. Representation issue in organized
establishments. - In organized establishments, when a
verified petition questioning the majority status of the
incumbent bargaining agent is filed before the Department
of Labor and Employment within the sixty-day period
before the expiration of a collective bargaining agreement,
the Med-Arbiter shall automatically order an election by
secret ballot when the verified petition is supported by the
written consent of at least twenty-five percent (25%) of all
the employees in the bargaining unit to ascertain the will
of the employees in the appropriate bargaining unit. To
have a valid election, at least a majority of all eligible voters
in the unit must have cast their votes. The labor union
receiving the majority of the valid votes cast shall be
certified as the exclusive bargaining agent of all the
workers in the unit. When an election which provides for
three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be
conducted between the labor unions receiving the two
highest number of votes: Provided, That the total number
of votes for all contending unions is at least fifty per cent
(50%) of the number of votes cast.
At the expiration of the freedom period, the employer
shall continue to recognize the majority status of the
incumbent bargaining agent where no petition for
certification election is filed.19
Applying the same provision, it can be said that while it is
incumbent for the employer to continue to recognize the
majority status of the incumbent bargaining agent even
after the expiration of the freedom period, they could only
do so when no petition for certification election was filed.
The reason is, with a pending petition for certification, any
such agreement entered into by management with a labor
organization is fraught with the risk that such a labor union
may not be chosen thereafter as the collective bargaining
representative.20 The provision for status quo is
conditioned on the fact that no certification election was
filed during the freedom period. Any other view would
render nugatory the clear statutory policy to favor
certification election as the means of ascertaining the true
expression of the will of the workers as to which labor
organization would represent them.21
In the instant case, four (4) petitions were filed as early as
May 12, 2000. In fact, a petition for certification election
was already ordered by the Med-Arbiter of DOLE Caraga
Region on August 23, 2000.22 Therefore, following Article
256, at the expiration of the freedom period, PRI's
obligation to recognize NAMAPRI-SPFL as the incumbent
bargaining agent does not hold true when petitions for
certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides
for automatic renewal pertains only to the economic
provisions of the CBA, and does not include
representational aspect of the CBA. An existing CBA
107
cannot constitute a bar to a filing of a petition for
certification election. When there is a representational
issue, the status quo provision in so far as the need to
await the creation of a new agreement will not apply.
Otherwise, it will create an absurd situation where the
union members will be forced to maintain membership by
virtue of the union security clause existing under the CBA
and, thereafter, support another union when filing a
petition for certification election. If we apply it, there will
always be an issue of disloyalty whenever the employees
exercise their right to self-organization. The holding of a
certification election is a statutory policy that should not be
circumvented,23 or compromised.1avvphi
Time and again, we have ruled that we adhere to the policy
of enhancing the welfare of the workers. Their freedom to
choose who should be their bargaining representative is of
paramount importance. The fact that there already exists
a bargaining representative in the unit concerned is of no
moment as long as the petition for certification election
was filed within the freedom period. What is imperative is
that by such a petition for certification election the
employees are given the opportunity to make known of
who shall have the right to represent them thereafter. Not
only some, but all of them should have the right to do so.
What is equally important is that everyone be given a
democratic space in the bargaining unit concerned.24
We will emphasize anew that the power to dismiss is a
normal prerogative of the employer. This, however, is not
without limitations. The employer is bound to exercise
caution in terminating the services of his employees
especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement.
Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee,
because it affects not only his position but also his means
of livelihood. Employers should, therefore, respect and
protect the rights of their employees, which include the
right to labor.25
An employee who is illegally dismissed is entitled to the
twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to
the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount
to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715,
employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits, or
their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the
time of their actual reinstatement. But if reinstatement is
no longer possible, the backwages shall be computed from
the time of their illegal termination up to the finality of the
decision. Moreover, respondents, having been compelled
to litigate in order to seek redress for their illegal dismissal,
are entitled to the award of attorney’s fees equivalent to
10% of the total monetary award.26
WHEREFORE, the petition is DENIED. The Decision
dated July 25, 2003 and the Resolution dated October 23,
2003 of the Court of Appeals in CA-G.R. SP No. 71760,
which set aside the Resolutions dated October 8, 2001
and April 29, 2002 of the National Labor Relations
Commission in NLRC CA No. M-006309-2001, are
108
AFFIRMED accordingly. Respondents are hereby
awarded full backwages and other allowances, without
qualifications and diminutions, computed from the time
they were illegally dismissed up to the time they are
actually reinstated. Let this case be remanded to the Labor
Arbiter for proper computation of the full backwages due
respondents, in accordance with Article 279 of the Labor
Code, as expeditiously as possible.
SO ORDERED.
LEGEND INTERNATIONAL RESORTS LIMITED,
PETITIONER, VS. KILUSANG MANGGAGAWA NG
LEGENDA (KML- INDEPENDENT), RESPONDENT.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the
September 18, 2003 Decision of the Court of Appeals in
CA-G.R. SP No. 72848 which found no grave abuse of
discretion on the part of the Office of the Secretary of the
Department of Labor and Employment (DOLE) which ruled
in favor of Kilusang Manggagawa ng
Legenda (KML). Also assailed is the September 14, 2005
Resolution denying petitioner's motion for reconsideration.
Factual Antecedents
On June 6, 2001, KML filed with the Med-Arbitration Unit
of the DOLE, San Fernando, Pampanga, a Petition for
Certification Election[1] docketed as Case No. RO300-
0106-RU-001. KML alleged that it is a legitimate labor
organization of the rank and file employees of Legend
International Resorts Limited (LEGEND). KML claimed
that it was issued its Certificate of Registration No. RO300-
0105-UR-002 by the DOLE on May 18, 2001.
LEGEND moved to dismiss[2] the petition alleging that
KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory
employees in violation of Article 245 of the Labor Code.
LEGEND also claimed that KML committed acts of fraud
and misrepresentation when it made it appear that certain
employees attended its general membership meeting on
April 5, 2001 when in reality some of them were either at
work; have already resigned as of March 2001; or were
abroad.
In its Comment,[3] KML argued that even if 41 of its
members are indeed supervisory employees and therefore
excluded from its membership, the certification election
could still proceed because the required number of the
total rank and file employees necessary for certification
purposes is still sustained. KML also claimed that its
legitimacy as a labor union could not be collaterally
attacked in the certification election proceedings but only
through a separate and independent action for
cancellation of union registration. Finally, as to the alleged
acts of misrepresentation, KML asserted that LEGEND
failed to substantiate its claim.
Ruling of the Med-Arbiter
109
On September 20, 2001, the Med-Arbiter[4] rendered
judgment[5] dismissing for lack of merit the petition for
certification election. The Med-Arbiter found that indeed
there were several supervisory employees in KML's
membership. Since Article 245 of the Labor Code
expressly prohibits supervisory employees from joining the
union of rank and file employees, the Med-Arbiter
concluded that KML is not a legitimate labor
organization. KML was also found to have fraudulently
procured its registration certificate by misrepresenting that
70 employees were among those who attended its
organizational meeting on April 5, 2001 when in fact they
were either at work or elsewhere.
KML thus appealed to the Office of the Secretary of the
DOLE.
Ruling of the Office of the Secretary of DOLE
On May 22, 2002, the Office of the Secretary of DOLE
rendered its Decision[6] granting KML's appeal thereby
reversing and setting aside the Med-Arbiter's
Decision. The Office of the Secretary of DOLE held that
KML's legitimacy as a union could not be collaterally
attacked, citing Section 5,[7] Rule V of Department Order
No. 9, series of 1997.
The Office of the Secretary of DOLE also opined that
Article 245 of the Labor Code merely provides for the
prohibition on managerial employees to form or join a
union and the ineligibility of supervisors to join the union of
the rank and file employees and vice versa. It declared
that any violation of the provision of Article 245 does
not ipso facto render the existence of the labor its earlier arguments. It also alleged that on August 24,
organization illegal. Moreover, it held that Section 11, 2001, it filed a Petition[10] for Cancellation of Union
paragraph II of Rule XI which provides for the grounds for Registration of KML docketed as Case No. RO300-0108-
dismissal of a petition for certification election does not CP-001 which was granted[11] by the DOLE Regional
include mixed membership in one union. Office No. III of San Fernando, Pampanga in its
Decision[12] dated November 7, 2001.
The dispositive portion of the Office of the Secretary of
DOLE's Decision reads: In a Resolution[13] dated August 20, 2002, the Office of the
Secretary of DOLE denied LEGEND's motion for
WHEREFORE, the appeal is hereby GRANTED and the reconsideration. It opined that Section 11, paragraph II(a),
order of the Med-Arbiter dated 20 September 2001 is Rule XI of Department Order No. 9 requires a final order
REVERSED and SET ASIDE. of cancellation before a petition for certification election
may be dismissed on the ground of lack of legal
Accordingly, let the entire record of the case be remanded personality. Besides, it noted that the November 7, 2001
to the regional office of origin for the immediate conduct of Decision of DOLE Regional Office No. III of San Fernando,
the certification election, subject to the usual pre-election Pampanga in Case No. RO300-0108-CP-001 was
conference, among the rank and file employees of reversed by the Bureau of Labor Relations in a Decision
LEGEND INTERNATIONAL RESORTS LIMITED with the dated March 26, 2002.
following choices:
Ruling of the Court of Appeals
1. KILUSANG MANGGAGAWA NG LEGENDA (KML-
INDEPENDENT); and Undeterred, LEGEND filed a Petition for Certiorari[14] with
the Court of Appeals docketed as CA-G.R. SP No.
2. NO UNION. 72848. LEGEND alleged that the Office of the Secretary
of DOLE gravely abused its discretion in reversing and
Pursuant to Rule XI, Section II.1 of D.O. No. 9, the setting aside the Decision of the Med-Arbiter despite
employer is hereby directed to submit to the office of origin, substantial and overwhelming evidence against KML.
within ten days from receipt of the decision, the certified
list of employees in the bargaining unit for the last three (3) For its part, KML alleged that the Decision dated March
months prior to the issuance of this decision. 26, 2002 of the Bureau of Labor Relations in Case No.
RO300-0108-CP-001 denying LEGEND's petition for
SO DECIDED.[8] cancellation and upholding KML's legitimacy as a labor
organization has already become final and executory,
LEGEND filed its Motion for Reconsideration[9] reiterating
110
entry of judgment having been made on August 21,
2002.[15]
The Office of the Secretary of DOLE also filed its
Comment[16] asserting that KML's legitimacy cannot be
attacked collaterally. Finally, the Office of the Secretary of
DOLE stressed that LEGEND has no legal personality to
participate in the certification election proceedings.
On September 18, 2003, the Court of Appeals rendered its
Decision[17] finding no grave abuse of discretion on the
part of the Office of the Secretary of DOLE. The appellate
court held that the issue on the legitimacy of KML as a
labor organization has already been settled with finality in
Case No. RO300-0108-CP-001. The March 26, 2002
Decision of the Bureau of Labor Relations upholding the
legitimacy of KML as a labor organization had long
become final and executory for failure of LEGEND to
appeal the same. Thus, having already been settled that
KML is a legitimate labor organization, the latter could
properly file a petition for certification election. There was
nothing left for the Office of the Secretary of DOLE to do
but to order the holding of such certification election.
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, and finding that
no grave abuse of discretion amounting to lack or excess
of jurisdiction has been committed by the Department of
Labor and Employment, the assailed May 22, 2002
Decision and August 20, 2002 Resolution in Case No.
RO300-106-RU-001 are UPHELD and AFFIRMED. The
instant petition is DENIED due course and, accordingly,
DISMISSED for lack of merit.[18]
111
LEGEND filed a Motion for Reconsideration[19] alleging,
among others, that it has appealed to the Court of Appeals
the March 26, 2002 Decision in Case No. RO300-0108-
CP-001 denying its petition for cancellation and that it is
still pending resolution.
On September 14, 2005, the appellate court denied
LEGEND's motion for reconsideration.
Hence, this Petition for Review on Certiorari raising the
lone assignment of error, viz:
WHETHER X X X THE HONORABLE COURT OF
APPEALS COMMITTED SERIOUS ERRORS IN THE
APPLICATION OF LAW IN DENYING THE
PETITIONER'S PETITION FOR CERTIORARI.[20]
Petitioner's Arguments
LEGEND submits that the Court of Appeals grievously
erred in ruling that the March 26, 2002 Decision denying
its Petition for Cancellation of KML's registration has
already become final and executory. It asserts that it has
seasonably filed a Petition for Certiorari[21] before the CA
docketed as CA-G.R. SP No. 72659 assailing said
Decision. In fact, on June 30, 2005, the Court of Appeals
granted the petition, reversed the March 26, 2002 Decision
of the Bureau of Labor Relations and reinstated the
November 7, 2001 Decision of the DOLE Regional Office
III ordering the cancellation of KML's registration.
Finally, LEGEND posits that the cancellation of KML's
certificate of registration should retroact to the time of its
issuance.[22] It thus claims that the petition for certification Court of Appeals and which at that time is still pending
election and all of KML's activities should be nullified resolution. The Court of Appeals never bothered to look
because it has no legal personality to file the same, much into this allegation and instead dismissed outright
less demand collective bargaining with LEGEND.[23] LEGEND's motion for reconsideration. By doing so, the
Court of Appeals in effect maintained its earlier ruling that
LEGEND thus prays that the September 20, 2001 the March 26, 2002 Decision of the Bureau of Labor
Decision of the Med-Arbiter dismissing KML's petition for Relations upholding the legitimacy of KML as a labor
certification election be reinstated.[24] organization has long become final and executory for
failure of LEGEND to appeal the same.
Respondent's Arguments
This is inaccurate. Records show that (in the cancellation
In its Comment filed before this Court dated March 21, of registration case) LEGEND has timely filed on
2006, KML insists that the Decision of the Bureau of Labor September 6, 2002 a petition for certiorari[26] before the
Relations upholding its legitimacy as a labor organization Court of Appeals which was docketed as CA-G.R. SP No.
has already attained finality[25] hence there was no more 72659 assailing the March 26, 2002 Decision of the
hindrance to the holding of a certification Bureau of Labor Relations. In fact, KML received a copy
election. Moreover, it claims that the instant petition has of said petition on September 10, 2002[27] and has filed its
become moot because the certification election sought to Comment thereto on December 2, 2002.[28] Thus, we find
be prevented had already been conducted. it quite interesting for KML to claim in its Comment (in the
certification petition case) before this Court dated March
Our Ruling 21, 2006[29] that the Bureau of Labor Relations' Decision in
the petition for cancellation case has already attained
The petition is partly meritorious. finality. Even in its Memorandum[30] dated March 13,
2007 filed before us, KML is still insisting that the Bureau
LEGEND has timely appealed the of Labor Relations' Decision has become final and
March 26, 2002 Decision of the Bureau executory.
of Labor Relations to the Court of
Appeals. Our perusal of the records shows that on June 30, 2005,
the Court of Appeals rendered its Decision[31] in CA-G.R.
We cannot understand why the Court of Appeals totally SP No. 72659 reversing the March 26, 2002 Decision of
disregarded LEGEND's allegation in its Motion for the Bureau of Labor Relations and reinstating the
Reconsideration that the March 26, 2002 Decision of the November 7, 2001 Decision of the Med-Arbiter which
Bureau of Labor Relations has not yet attained finality canceled the certificate of registration of KML.[32] On
considering that it has timely appealed the same to the
112
September 30, 2005, KML's motion for reconsideration
was denied for lack of merit.[33] On November 25, 2005,
KML filed its Petition for Review on Certiorari[34] before this
Court which was docketed as G.R. No. 169972. However,
the same was denied in a Resolution[35] dated February
13, 2006 for having been filed out of time. KML moved for
reconsideration but it was denied with finality in a
Resolution[36] dated June 7, 2006. Thereafter, the said
Decision canceling the certificate of registration of KML as
a labor organization became final and executory and entry
of judgment was made on July 18, 2006.[37]
The cancellation of KML's certificate of
registration should not retroact to the
time of its issuance.
Notwithstanding the finality of the Decision canceling the
certificate of registration of KML, we cannot subscribe to
LEGEND's proposition that the cancellation of KML's
certificate of registration should retroact to the time of its
issuance. LEGEND claims that KML's petition for
certification election filed during the pendency of the
petition for cancellation and its demand to enter into
collective bargaining agreement with LEGEND should be
dismissed due to KML's lack of legal personality.
This issue is not new or novel. In Pepsi-Cola Products
Philippines, Inc. v. Secretary of Labor,[38] we already ruled
that:
Anent the issue of whether or not the Petition to
cancel/revoke registration is a prejudicial question to the
petition for certification election, the following ruling in the
113
case of Association of the Court of Appeals Employees
(ACAE) v. Hon. Pura Ferrer-Calleja, x x x is in point, to wit:
x x x It is well-settled rule that `a certification proceedings
is not a litigation in the sense that the term is ordinarily
understood, but an investigation of a non-adversarial and
fact finding character.' (Associated Labor Unions (ALU) v.
Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph
and Telephone Corporation v. NLRC, 183 SCRA
451 [1990]. Thus, the technical rules of evidence do not
apply if the decision to grant it proceeds from an
examination of the sufficiency of the petition as well as a
careful look into the arguments contained in the position
papers and other documents.
At any rate, the Court applies the established rule correctly
followed by the public respondent that an order to hold a
certification election is proper despite the pendency
of the petition for cancellation of the registration
certificate of the respondent union. The rationale for
this is that at the time the respondent union filed its
petition, it still had the legal personality to perform
such act absent an order directing the
cancellation.[39] (Emphasis supplied.)
In Capitol Medical Center, Inc. v. Hon. Trajano,[40] we also
held that "the pendency of a petition for cancellation of
union registration does not preclude collective
bargaining."[41] Citing the Secretary of Labor, we held viz:
That there is a pending cancellation proceedings
against the respondent Union is not a bar to set in
motion the mechanics of collective bargaining. If a
certification election may still be ordered despite the
pendency of a petition to cancel the union's
registration certificate x x x more so should the
collective bargaining process continue despite its
pendency. [42](Emphasis supplied.)
In Association of Court of Appeals Employees v. Ferrer-
Calleja,[43] this Court was tasked to resolve the issue of
whether "the certification proceedings should be
suspended pending [the petitioner's] petition for the
cancellation of union registration of the
UCECA ." [44] [45] The Court resolved the issue in the
negative holding that "an order to hold a certification
election is proper despite the pendency of the petition
for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the
time the respondent union filed its petition, it still had the
legal personality to perform such act absent an order
directing a cancellation."[46] We reiterated this view
in Samahan ng Manggagawa sa Pacific Plastic v. Hon.
Laguesma[47] where we declared that "a certification
election can be conducted despite pendency of a
petition to cancel the union registration
certificate. For the fact is that at the time the respondent
union filed its petition for certification, it still had the legal
personality to perform such act absent an order directing
its cancellation."[48]
Based on the foregoing jurisprudence, it is clear that a
certification election may be conducted during the
pendency of the cancellation proceedings. This is
because at the time the petition for certification was filed,
the petitioning union is presumed to possess the legal
personality to file the same. There is therefore no basis
114
for LEGEND's assertion that the cancellation of KML's
certificate of registration should retroact to the time of its
issuance or that it effectively nullified all of KML's activities,
including its filing of the petition for certification election
and its demand to collectively bargain.
The legitimacy of the legal personality
of KML cannot be collaterally attacked
in a petition for certification election.
We agree with the ruling of the Office of the Secretary of
DOLE that the legitimacy of the legal personality of KML
cannot be collaterally attacked in a petition for certification
election proceeding. This is in consonance with our ruling
in Laguna Autoparts Manufacturing Corporation v. Office
of the Secretary, Department of Labor and
Employment[49] that "such legal personality may not be
subject to a collateral attack but only through a separate
action instituted particularly for the purpose of assailing
it."[50] We further held therein that:
This is categorically prescribed by Section 5, Rule V of the
Implementing Rules of Book V, which states as follows:
SEC. 5.[51] Effect of registration. - The labor organization
or worker's 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.
Hence, to raise the issue of the respondent union's legal
personality is not proper in this case. The pronouncement
of the Labor Relations Division Chief, that the respondent stipulate that a labor organization shall be deemed
union acquired a legal personality x x x cannot be registered and vested with legal personality on the date of
challenged in a petition for certification election. issuance of its certificate of registration. Once a certificate
of registration is issued to a union, its legal personality
The discussion of the Secretary of Labor and Employment cannot be subject to a collateral attack. In may be
on this point is also enlightening, thus: questioned only in an independent petition for cancellation
in accordance with Section 5 of Rule V, Book V of the
. . . Section 5, Rule V of D.O. 9 is instructive on the Implementing Rules."[53]
matter. It provides that the legal personality of a union
cannot be the subject of collateral attack in a petition for WHEREFORE, in view of the foregoing, the petition
certification election, but may be questioned only in an is PARTLY GRANTED. The Decision of the Court of
independent petition for cancellation of union Appeals dated September 18, 2003 in CA-G.R. SP No.
registration. This has been the rule since NUBE v. 72848 insofar as it affirms the May 22, 2002 Decision and
Minister of Labor, 110 SCRA 274 (1981). What applies in August 20, 2002 Resolution of the Office of the Secretary
this case is the principle that once a union acquires a of Department of Labor and Employment
legitimate status as a labor organization, it continues as is AFFIRMED. The Decision of the Court of Appeals
such until its certificate of registration is cancelled or insofar as it declares that the March 26, 2002 Decision of
revoked in an independent action for cancellation. the Bureau of Labor Relations in Case No. RO300-0108-
CP-001 upholding that the legitimacy of KML as a labor
Equally important is Section 11, Paragraph II, Rule IX of organization has long become final and executory for
D.O. 9, which provides for the dismissal of a petition for failure of LEGEND to appeal the same,
certification election based on the lack of legal personality is REVERSED and SET ASIDE.
of a labor organization only in the following instances: (1)
appellant is not listed by the Regional Office or the BLR in SO ORDERED.
its registry of legitimate labor organizations; or (2)
appellant's legal personality has been revoked or SAMAHANG MANGGAGAWA SA CHARTER
cancelled with finality. Since appellant is listed in the CHEMICAL SOLIDARITY OF UNIONS IN THE
registry of legitimate labor organizations, and its legitimacy PHILIPPINES FOR EMPOWERMENT AND REFORMS
has not been revoked or cancelled with finality, the (SMCC-SUPER), ZACARRIAS JERRY VICTORIO -
granting of its petition for certification election is proper.[52] UNION PRESIDENT, PETITIONER,VS. CHARTER
CHEMICAL AND COATING CORPORATION,
"[T]he legal personality of a legitimate labor organization x RESPONDENT.
x x cannot be subject to a collateral attack. The law is very
clear on this matter. x x x The Implementing Rules
115

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
Decision[1] in CA-G.R. SP No. 58203, which annulled and
set aside the January 13, 2000 Decision[2] of the
Department of Labor and Employment (DOLE) in OS-A-6-
53-99 (NCR-OD-M-9902-019) and the September 16,
2005 Resolution[3] denying petitioner union's motion for
reconsideration.
Factual Antecedents
On February 19, 1999, Samahang Manggagawa sa
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.
On April 14, 1999, respondent company filed an Answer
116
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 Decision[6] dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not
a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at
Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang 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 Code[7] 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 Decision[8] 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-isang Lakas Manggagawa sa 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 contrary, the prior
certification election filed by Pinag-isang Lakas
117
Manggagawa sa 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. Samahang Manggagawa sa 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
I Petitioner union claims that the litigation of the issue as to
Whether x x x 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
118
Whether x x x 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 x x 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
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 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
119
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 Union[14] 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 this case occurred in 1999, we shall decide the issues
dismissed on the ground that another union had previously under the pertinent legal provisions then in force (i.e., R.A.
filed a petition for certification No. 6715,[18] amending Book V of the Labor Code, and the
election seeking to represent the same bargaining rules and regulations[19] implementing R.A. No. 6715, as
unit in respondent company. amended by D.O. No. 9,[20]

Upon motion for reconsideration by petitioner union on series of 1997) pursuant to our ruling in Republic v.
January 13, 2000, the DOLE reversed its previous ruling. Kawashima Textile Mfg., Philippines, Inc.[21]
It upheld the right of petitioner union to file the subject
petition for certification election because its previous In the main, the CA ruled that petitioner union failed to
decision was based on a mistaken appreciation of comply with the requisite documents for registration under
facts.[15] From this adverse decision, respondent company Article 235 of the Labor Code and its implementing rules.
timely moved for reconsideration by reiterating its previous It agreed with the Med-Arbiter that the Charter
arguments before the Med-Arbiter that petitioner union has Certificate, Sama-samang Pahayag ng Pagsapi
no legal personality to file the subject petition for at Authorization, and Listahan ng mga Dumalo sa
certification election. Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas were not executed under
The July 16, 1999 Decision of the DOLE, therefore, never oath. Thus, petitioner union cannot be accorded the status
attained finality because the parties timely moved for of a legitimate labor organization.
reconsideration. The issue then as to the legal personality
of petitioner union to file the certification election was We disagree.
properly raised before the DOLE, the appellate court and
now this Court. The then prevailing Section 1, Rule VI of the Implementing
Rules of Book V, as amended by D.O. No. 9, series of
The charter certificate need not be 1997, provides:
certified under oath by the local union's
secretary or treasurer and attested to Section 1. Chartering and creation of a local chapter -- A
by its president. duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office
Preliminarily, we must note that Congress enacted or to the Bureau two (2) copies of the following:
Republic Act (R.A.) No. 9481[16] which took effect on June
14, 2007.[17] This law introduced substantial amendments (a) A charter certificate issued by the federation or
to the Labor Code. However, since the operative facts in national union indicating the creation or establishment of
the local/chapter;
120

(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.
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-samang Pahayag ng Pagsapi
at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang 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
121
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 x x 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-
laws[26]-- 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
245[27] 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
Union[28] (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 union failed to present
any rebuttal evidence in the proceedings below after
respondent company submitted in evidence the job
descriptions[29] 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
122
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 x x 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 x x.
(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 x x x
(c) description of the bargaining unit which shall be
the employer unit unless circumstances otherwise
require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall
not include supervisory employees and/or security
guards. (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
123
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 x x x
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:
Rule XI
Certification Elections
x x x x
Sec. 4. Forms and contents of petition. - The petition shall
be in writing and under oath and shall contain, among
others, the following: x x x (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
124
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 Dunlop and 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 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.
125
9, series of 1997, was still in effect.
Hence, Kawashima applies 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
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.
certification election should not prevent the conduct of the
certification election, this review has to look again at the
seemingly never-ending quest of the petitioner employer
to stop the conduct of the certification election on the
ground of the pendency of proceedings to cancel the labor
organization’s registration it had initiated on the ground
that the membership of the labor organization was a
mixture of managerial and supervisory employees with the
rank-and-file employees.

SO ORDERED. Under review at the instance of the employer is the

decision promulgated on December 13, 2005,1 whereby
the Court of Appeals (CA) dismissed its petition
THE HERITAGE HOTEL MANILA, ACTING THROUGH for certiorari to assail the resolutions of respondent
ITS OWNER, GRAND PLAZA HOTEL Secretary of Labor and Employment sanctioning the
CORPORATION, Petitioner, v. SECRETARY OF LABOR conduct of the certification election initiated by respondent
AND EMPLOYMENT; MED-ARBITER TOMAS F. labor organization.2cralawlawlibrary
FALCONITIN; AND NATIONAL UNION OF WORKERS
IN THE HOTEL, RESTAURANT AND ALLIED Antecedents
INDUSTRIES–HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER (NUWHRAIN- On October 11, 1995, respondent National Union of
HHMSC), Respondents. Workers in Hotel Restaurant and Allied Industries-
Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-
DECISION HHMSC) filed a petition for certification election,3 seeking
to represent all the supervisory employees of Heritage
BERSAMIN, J.: Hotel Manila. The petitioner filed its opposition, but the
opposition was deemed denied on February 14, 1996
Although case law has repeatedly held that the employer when Med-Arbiter Napoleon V. Fernando issued his order
was but a bystander in respect of the conduct of the for the conduct of the certification election.
certification election to decide the labor organization to
represent the employees in the bargaining unit, and that The petitioner appealed the order of Med-Arbiter
the pendency of the cancellation of union registration Fernando, but the appeal was also denied. A pre-election
brought against the labor organization applying for the conference was then scheduled. On February 20, 1998,
however, the pre-election conference was suspended until
126
further notice because of the repeated non-appearance of
NUWHRAIN-HHMSC.4cralawlawlibrary
On January 29, 2000, NUWHRAIN-HHMSC moved for the
conduct of the pre-election conference. The petitioner
primarily filed its comment on the list of employees
submitted by NUWHRAIN-HHMSC, and simultaneously
sought the exclusion of some from the list of employees
for occupying either confidential or managerial
positions.5 The petitioner filed a motion to dismiss on April
17, 2000,6 raising the prolonged lack of interest of
NUWHRAIN-HHMSC to pursue its petition for certification
election.
On May 12, 2000, the petitioner filed a petition for the
cancellation of NUWHRAIN-HHMSC’s registration as a
labor union for failing to submit its annual financial reports
and an updated list of members as required by Article 238
and Article 239 of the Labor Code, docketed as Case No.
NCR-OD-0005-004-IRD entitled The Heritage Hotel
Manila, acting through its owner, Grand Plaza Hotel
Corporation v. National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHSMC).7 It filed
another motion on June 1, 2000 to seek either the
dismissal or the suspension of the proceedings on the
basis of its pending petition for the cancellation of union
registration.8cralawlawlibrary
The following day, however, the Department of Labor and
Employment (DOLE) issued a notice scheduling the
certification elections on June 23, 2000.9cralawlawlibrary
127
Dissatisfied, the petitioner commenced in the CA on June
14, 2000 a special civil action for certiorari,10 alleging that
the DOLE gravely abused its discretion in not suspending
the certification election proceedings. On June 23, 2000,
the CA dismissed the petition for certiorari for non-
exhaustion of administrative remedies.11cralawlawlibrary
The certification election proceeded as scheduled, and
NUWHRAIN-HHMSC obtained the majority vote of the
bargaining unit.12 The petitioner filed a protest (with motion
to defer the certification of the election results and the
winner),13 insisting on the illegitimacy of NUWHRAIN-
HHMSC.
Ruling of the Med-Arbiter
On January 26, 2001, Med-Arbiter Tomas F. Falconitin
issued an order,14 ruling that the petition for the
cancellation of union registration was not a bar to the
holding of the certification election, and disposing
thusly:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, respondent
employer/protestant’s protest with motion to defer
certification of results and winner is hereby dismissed for
lack of merit.
Accordingly, this Office hereby certify pursuant to the rules
that petitioner/protestee, National Union of Workers in
Hotels, Restaurants and Allied Industries-Heritage Hotel
Manila Supervisory Chapter (NUWHRAIN-HHSMC) is the
sole and exclusive bargaining agent of all supervisory
employees of the Heritage Hotel Manila acting through its
owner, Grand Plaza Hotel Corporation for purposes of
collective bargaining with respect to wages, and hours of
work and other terms and conditions of employment.
SO ORDERED.
The petitioner timely appealed to the DOLE Secretary
claiming that: (a) the membership of NUWHRAIN-HHMSC
consisted of managerial, confidential, and rank-and-file
employees; (b) NUWHRAIN-HHMSC failed to comply with
the reportorial requirements; and (c) Med-Arbiter
Falconitin simply brushed aside serious questions on the
illegitimacy of NUWHRAIN-HHMSC.15 It contended that a
labor union of mixed membership of supervisory and rank-
and-file employees had no legal right to petition for the
certification election pursuant to the pronouncements
in Toyota Motor Philippines Corporation v. Toyota Motor
Philippines Corporation Labor Union16(Toyota
Motor) and Dunlop Slazenger (Phils.) v. Secretary of
Labor and Employment17(Dunlop Slazenger).
Ruling of the DOLE Secretary
On August 21, 2002, then DOLE Secretary Patricia A. Sto.
Tomas issued a resolution denying the appeal,18 and
affirming the order of Med-Arbiter
Falconitin, viz:chanRoblesvirtualLawlibrary
WHEREFORE, the appeal is DENIED. The order of the
Med-Arbiter dated 26 January 2001 is hereby AFFIRMED.
SO RESOLVED.
DOLE Secretary Sto. Tomas observed that the petitioner’s
reliance on Toyota Motor and Dunlop Slazenger was
128
misplaced because both rulings were already overturned
by SPI Technologies, Inc. v. Department of Labor and
Employment,19 to the effect that once a union acquired a
legitimate status as a labor organization, it continued as
such until its certificate of registration was cancelled or
revoked in an independent action for cancellation.
The petitioner moved for reconsideration.
In denying the motion on October 21, 2002, the DOLE
Secretary declared that the mixture or co-mingling of
employees in a union was not a ground for dismissing a
petition for the certification election under Section 11, par.
II, Rule XI of Department Order No. 9; that the appropriate
remedy was to exclude the ineligible employees from the
bargaining unit during the inclusion-exclusion
proceedings;20 that the dismissal of the petition for the
certification election based on the legitimacy of the
petitioning union would be inappropriate because it would
effectively allow a collateral attack against the union’s
legal personality; and that a collateral attack against the
personality of the labor organization was prohibited under
Section 5, Rule V of Department Order No. 9, Series of
1997.21cralawlawlibrary
Upon denial of its motion for reconsideration, the petitioner
elevated the matter to the CA by petition
for certiorari.22cralawlawlibrary
Ruling of the CA
On December 13, 2005,23 the CA dismissed the petition
for certiorari, giving its following
disquisition:chanRoblesvirtualLawlibrary
The petition for certiorari filed by the petitioner is, in
essence, a continuation of the debate on the relevance of
the Toyota Motor, Dunlop Slazenger and Progressive
Development cases to the issues raised.
Toyota Motor and Dunlop Slazenger are anchored on the
provisions of Article 245 of the Labor Code which prohibit
managerial employees from joining any labor union and
permit supervisory employees to form a separate union of
their own. The language naturally suggests that a labor
organization cannot carry a mixture of supervisory and
rank-and-file employees. Thus, courts have held that a
union cannot become a legitimate labor union if it shelters
under its wing both types of employees. But there are
elements of an elliptical reasoning in the holding of these
two cases that a petition for certification election may not
prosper until the composition of the union is settled
therein. Toyota Motor, in particular, makes the blanket
statement that a supervisory union has no right to file a
certification election for as long as it counts rank-and-file
employees among its ranks. More than four years
after Dunlop Slazenger, the Court clarified in Tagaytay
Highlands International Golf Club Inc vs Tagaytay
Highlands Employees Union-PTGWO that while Article
245 prohibits supervisory employees from joining a rank-
and-file union, it does not provide what the effect is if a
rank-and-file union takes in supervisory employees as
members, or vice versa. Toyota Motor and Dunlop
Slazenger jump into an unnecessary conclusion when
they foster the notion that Article 245 carries with it the
authorization to inquire collaterally into the issue wherever
it rears its ugly head.
129
Tagaytay Highlands proclaims, in the light of Department
Order 9, that after a certificate of registration is issued to a
union, its legal personality cannot be subject to a collateral
attack. It may be questioned only in an independent
petition for cancellation. In fine, Toyota and Dunlop
Slazenger are a spent force. Since Tagaytay
Highlands was handed down after these two cases, it
constitutes the latest expression of the will of the Supreme
Court and supersedes or overturns previous rulings
inconsistent with it. From this perspective, it is needless
to discuss whether SPI Technologies as a mere resolution
of the Court may prevail over a full-blown decision
that Toyota Motor or Dunlop Slazenger was. The ruling
in SPI Technologies has been echoed in Tagaytay
Highlands, for which reason it is with Tagaytay Highlands,
not SPI Technologies, that the petitioner must joust.
The fact that the cancellation proceeding has not yet been
resolved makes it obvious that the legal personality of the
respondent union is still very much in force. The DOLE
has thus every reason to proceed with the certification
election and commits no grave abuse of discretion in
allowing it to prosper because the right to be certified as
collective bargaining agent is one of the legitimate
privileges of a registered union. It is for the petitioner to
expedite the cancellation case if it wants to put an end to
the certification case, but it cannot place the issue of the
union’s legitimacy in the certification case, for that would
be tantamount to making the collateral attack the DOLE
has staunchly argued to be impermissible.
The reference made by the petitioner to
another Progressive Development case that it would be
more prudent for the DOLE to suspend the certification
case until the issue of the legality of the registration is
resolved, has also been satisfactorily answered. Section
11, Rule XI of Department Order 9 provides for the
grounds for the dismissal of a petition for certification
election, and the pendency of a petition for cancellation of
union registration is not one of them. Like Toyota
Motor and Dunlop Slazenger, the
second Progressive case came before Department Order
9.
IN VIEW OF THE FOREGOING, the disputed resolutions
of the Secretary of Labor and Employment are
AFFIRMED, and the petition is DISMISSED.
SO ORDERED.
The petitioner sought reconsideration,24 but its motion was
denied.
Issues
Hence, this appeal, with the petitioner insisting
that:chanRoblesvirtualLawlibrary
I employees); that suspension of the certification election
THE COURT OF APPEALS ERRED IN RULING
THAT TAGAYTAY HIGHLANDS APPLIES TO THE CASE
AT BAR
II
[THE HONORABLE COURT OF APPEALS] SERIOUSLY
130
ERRED WHEN IT DISREGARDED PROGRESSIVE
DEVELOPMENT CORPORATION – PIZZA HUT V.
LAGUESMA WHICH HELD THAT IT WOULD BE MORE
PRUDENT TO SUSPEND THE CERTIFICATION CASE
UNTIL THE ISSUE OF THE LEGALITY OF THE
REGISTRATION OF THE UNION IS FINALLY
RESOLVED
III
BECAUSE OF THE PASSAGE OF TIME, RESPONDENT
UNION NO LONGER POSSESSES THE MAJORITY
STATUS SUCH THAT A NEW CERTIFICATION
ELECTION IS IN ORDER25chanrobleslaw
The petitioner maintains that the ruling in Tagaytay
Highlands International Golf Club Inc v. Tagaytay
Highlands Employees Union-PTGWO26 (Tagaytay
Highlands) was inapplicable because it involved the co-
mingling of supervisory and rank-and-file employees in
one labor organization, while the issue here related to the
mixture of membership between two employee groups —
one vested with the right to self-organization (i.e., the rank-
and-file and supervisory employees), and the other
deprived of such right (i.e., managerial and confidential
was appropriate because a finding of “illegal mixture” of
membership during a petition for the cancellation of union
registration determined whether or not the union had met
the 20% representation requirement under Article 234(c)
of the Labor Code; 27 and that in holding that mixed
membership was not a ground for canceling the union
registration, except when such was done through
misrepresentation, false representation or fraud under the
circumstances enumerated in Article 239(a) and (c) of
the Labor Code, the CA completely ignored the 20%
requirement under Article 234(c) of the Labor Code.
The petitioner posits that the grounds for dismissing a
petition for the certification election under Section 11, Rule
XI of Department Order No. 9, Series of 1997, were not
exclusive because the other grounds available under
the Rules of Court could be invoked; that in Progressive
Development Corporation v. Secretary, Department of
Labor and Employment,28 the Court ruled that prudence
could justify the suspension of the certification election
proceedings until the issue of the legality of the union
registration could be finally resolved; that the non-
submission of the annual financial statements and the list
of members in the period from 1996 to 1999 constituted a
serious challenge to NUWHRAIN-HHMSC’s right to file its
petition for the certification election; and that from the time
of the conduct of the certification election on June 23,
2000, the composition of NUWHRAIN-HHMSC had
substantially changed, thereby necessitating another
certification election to determine the true will of the
bargaining unit.
In short, should the petition for the cancellation of union
registration based on mixed membership of supervisors
and managers in a labor union, and the non-submission of
reportorial requirements to the DOLE justify the
suspension of the proceedings for the certification
elections or even the denial of the petition for the
certification election?
Ruling
131
We deny the petition for review on certiorari.
Basic in the realm of labor union rights is that the
certification election is the sole concern of the
workers,29 and the employer is deemed an intruder as far
as the certification election is concerned.30 Thus, the
petitioner lacked the legal personality to assail the
proceedings for the certification election,31 and should
stand aside as a mere bystander who could not oppose
the petition, or even appeal the Med-Arbiter’s orders
relative to the conduct of the certification election.32 As the
Court has explained in Republic v. Kawashima Textile
Mfg., Philippines,
33
Inc. (Kawashima):chanRoblesvirtualLawlibrary
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 petitioner’s meddling in the conduct of the certification
election among its employees unduly gave rise to the
suspicion that it intended to establish a company
union.34 For that reason, the challenges it posed against
the certification election proceedings were rightly denied.
Under the long established rule, too, the filing of the
petition for the cancellation of NUWHRAIN-HHMSC’s
registration should not bar the conduct of the certification
election.35 In that respect, only a final order for the
cancellation of the registration would have prevented
NUWHRAIN-HHMSC from continuing to enjoy all the
rights conferred on it as a legitimate labor union, including
the right to the petition for the certification election. 36 This
rule is now enshrined in Article 238-A of the Labor Code,
as amended by Republic Act No. 9481,37 which
reads:chanRoblesvirtualLawlibrary
Article 238-A. Effect of a Petition for Cancellation of
Registration. – A petition for cancellation of union
registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a
petition for certification election.
xxxx
Still, the petitioner assails the failure of NUWHRAIN-
HHMSC to submit its periodic financial reports and
updated list of its members pursuant to Article 238 and
Article 239 of the Labor Code. It contends that the serious
challenges against the legitimacy of NUWHRAIN-HHMSC
as a union raised in the petition for the cancellation of
union registration should have cautioned the Med-Arbiter
against conducting the certification election.
132
The petitioner does not convince us.
In The Heritage Hotel Manila v. National Union of Workers
in the Hotel, Restaurant and Allied Industries-Heritage
Hotel Manila Supervisors Chapter (NUWHRAIN-
HHMSC),38 the Court declared that the dismissal of the
petition for the cancellation of the registration of
NUWHRAIN-HHMSC was proper when viewed against
the primordial right of the workers to self-organization,
collective bargaining negotiations and peaceful concerted
actions, viz:chanRoblesvirtualLawlibrary
x x x x
[Articles 238 and 239 of the Labor Code] give the Regional
Director ample discretion in dealing with a petition for
cancellation of a union's registration, particularly,
determining whether the union still meets the requirements
prescribed by law. It is sufficient to give the Regional
Director license to treat the late filing of required
documents as sufficient compliance with the requirements
of the law. After all, the law requires the labor organization
to submit the annual financial report and list of members
in order to verify if it is still viable and financially
sustainable as an organization so as to protect the
employer and employees from fraudulent or fly-by-night
unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved,
though belatedly.
We cannot ascribe abuse of discretion to the Regional
Director and the DOLE Secretary in denying the petition
for cancellation of respondent's registration. The union
members and, in fact, all the employees belonging to the
appropriate bargaining unit should not be deprived of a
bargaining agent, merely because of the negligence of the
union officers who were responsible for the submission of
the documents to the BLR.
Labor authorities should, indeed, act with circumspection
in treating petitions for cancellation of union registration,
lest they be accused of interfering with union activities. In
resolving the petition, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3 of
the Constitution, i.e., the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities. Labor authorities should
bear in mind that registration confers upon a union the
status of legitimacy and the concomitant right and
privileges granted by law to a legitimate labor organization,
particularly the right to participate in or ask for certification
election in a bargaining unit. Thus, the cancellation of a
certificate of registration is the equivalent of snuffing out
the life of a labor organization. For without such
registration, it loses - as a rule - its rights under the Labor
Code.
It is worth mentioning that the Labor Code's provisions on
cancellation of union registration and on reportorial
requirements have been recently amended by Republic
Act (R.A.) No. 9481, 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,
which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to
strengthen the workers’ right to self-organization and
133
enhance the Philippines' compliance with its international
obligations as embodied in the International Labor
Organization (ILO) Convention No. 87, pertaining to the
non-dissolution of workers’ organizations by administrative
authority. Thus, R.A. No. 9481 amended Article 239 to
read:chanRoblesvirtualLawlibrary
ART. 239. Grounds for Cancellation of Union
Registration.--The following may constitute grounds for
cancellation of union
registration:chanRoblesvirtualLawlibrary
(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.
R.A. No. 9481 also inserted in the Labor Code Article 242-
A, which provides:chanroblesvirtuallawlibrary
ART. 242-A. Reportorial Requirements.--The following are
documents required to be submitted to the Bureau by the
legitimate labor organization
concerned:chanRoblesvirtualLawlibrary
(a) Its constitution and by-laws, or amendments thereto,
the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-laws
within thirty (30) days from adoption or ratification of the
constitution and by-laws or amendments thereto;
Toyota Motor and Dunlop Slazenger involved petitions for
(b) Its list of officers, minutes of the election of officers, and certification election filed on November 26, 1992 and
list of voters within thirty (30) days from election; September 15, 1995, respectively. In both cases, we
applied the Rules and Regulations Implementing R.A. No.
(c) Its annual financial report within thirty (30) days after 6715 (also known as the 1989 Amended Omnibus Rules),
the close of every fiscal year; and the prevailing rule then.

(d) Its list of members at least once a year or whenever The 1989 Amended Omnibus Rules was amended on
required by the Bureau. June 21, 1997 by Department Order No. 9, Series of 1997.
Among the amendments was the removal of the
Failure to comply with the above requirements shall requirement of indicating in the petition for the certification
not be a ground for cancellation of union registration election that there was no co-mingling of rank-and-file and
but shall subject the erring officers or members to supervisory employees in the membership of the labor
suspension, expulsion from membership, or any union. This was the prevailing rule when the Court
appropriate penalty. promulgated Tagaytay Highlands, declaring therein that
mixed membership should have no bearing on the
xxxx legitimacy of a registered labor organization, unless the
co-mingling was due to misrepresentation, false statement
The ruling thereby wrote finis to the challenge being posed or fraud as provided in Article 239 of the Labor
by the petitioner against the illegitimacy of NUWHRAIN- Code.40cralawlawlibrary
HHMSC.
Presently, then, the mixed membership does not result in
The remaining issue to be resolved is which the illegitimacy of the registered labor union unless the
among Toyota Motor, Dunlop Slazenger and Tagaytay same was done through misrepresentation, false
Highlands applied in resolving the dispute arising from the statement or fraud according to Article 239 of the Labor
mixed membership in NUWHRAIN-HHMSC. Code. In Air Philippines Corporation v. Bureau of Labor
Relations,41 we categorically explained that—
This is not a novel matter. In Kawashima,39 we have
reconciled our rulings in Toyota Motor, Dunlop Clearly, then, for the purpose of de-certifying a union, it is
Slazenger and Tagaytay Highlands by emphasizing on not enough to establish that the rank-and-file union
the laws prevailing at the time of filing of the petition for the includes ineligible employees in its membership. Pursuant
certification election. to Article 239 (a) and (c) of the Labor Code, it must be
shown that there was misrepresentation, false statement
134
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, 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.
We note that NUWHRAIN-HHMSC filed its petition for the
certification election on October 11, 1995. Conformably
with Kawashima, the applicable law was the 1989
Amended Omnibus Rules, and the prevailing rule was the
pronouncement in Toyota Motor and Dunlop Slazenger to
the effect that a labor union of mixed membership was not
possessed with the requisite personality to file a petition
for the certification election.
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC.
We expound.
In both Toyota Motor and Dunlop Slazenger, the Court
was convinced that the concerned labor unions were
comprised by mixed rank-and-file and supervisory
employees. In Toyota Motor, the employer submitted the
job descriptions of the concerned employees to prove that
there were supervisors in the petitioning union for rank-
and-file employees. In Dunlop Slazenger, the Court
observed that the labor union of supervisors included
employees occupying positions that apparently belonged
to the rank-and-file. In both Toyota Motor and Dunlop
Slazenger, the employers were able to adduce substantial
evidence to prove the existence of the mixed membership.
Based on the records herein, however, the petitioner failed
135
in that respect. To recall, it raised the issue of the mixed
membership in its comment on the list of members
submitted by NUWHRAIN-HHMSC, and in its protest. In
the comment, it merely identified the positions that were
either confidential or managerial, but did not present any
supporting evidence to prove or explain the identification.
In the protest, it only enumerated the positions that were
allegedly confidential and managerial, and identified two
employees that belonged to the rank-and-file, but did not
offer any description to show that the positions belonged
to different employee groups.
Worth reiterating is that the actual functions of an
employee, not his job designation, determined whether the
employee occupied a managerial, supervisory or rank-
and-file position.42 As to confidential employees who were
excluded from the right to self-organization, they must (1)
assist or act in a confidential capacity, in regard (2) to
persons who formulated, determined, and effectuated
management policies in the field of labor relations.43 In that
regard, mere allegations sans substance would not be
enough, most especially because the constitutional right of
workers to self-organization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had
already spoken, and elected it as the bargaining agent. As
between the rigid application of Toyota
Motors and Dunlop Slazenger, and the right of the workers
to self-organization, we prefer the latter. For us, the choice
is clear and settled. “What is important is that there is an
unmistakeable intent of the members of [the] union to
exercise their right to organize. We cannot impose
rigorous restraints on such right if we are to give meaning
to the protection to labor and social justice clauses of the Before this Court are consolidated Rule 45 petitions
Constitution.” 44cralawlawlibrary challenging the Decision1 and the Resolution2 issued by
the Court of Appeals (CA) in CA-G.R. SP No. 100722.
WHEREFORE, the Court DENIES the petition for review
on certiorari; AFFIRMS the decision promulgated on THE FACTS
December 13, 2005 by the Court of Appeals;
and ORDERS the petitioner to pay the costs of suit. Samahan ng Manggagawa sa Ren Transport (SMART) is
a registered union, which had a five-year collective
SO ORDERED bargaining agreement (CBA) with Ren Transport Corp.
(Ren Transport) set to expire on 31 December 2004.3 The
60-day freedom period of the CBA passed without a
• REN TRANSPORT CORP. AND/OR REYNALDO challenge to SMART'S majority status as bargaining
PAZCOGUIN III, Petitioners, v. NATIONAL LABOR agent.4 SMART thereafter conveyed its willingness to
RELATIONS COMMISSION (2ND DIVISION), bargain with Ren Transport, to which it sent bargaining
SAMAHANG MANGGAGAWA SA REN TRANSPORT- proposals. Ren Transport, however, failed to reply to the
ASSOCIATION OF DEMOCRATIC LABOR demand.5chanrobleslaw
ASSOCIATIONS (SMART-ADLO) REPRESENTED BY
ITS PRESIDENT NESTOR FULMINAR, Respondents. Subsequently, two members of SMART wrote to the
Department of Labor and Employment - National Capital
G.R. No. 188252 Region (DOLE-NCR). The office was informed that a
majority of the members of SMART had decided to
SAMAHANG MANGGAGAWA SA REN TRANSPORT- disaffiliate from their mother federation to form another
ASSOCIATION OF DEMOCRATIC LABOR union, Ren Transport Employees Association
ASSOCIATIONS (SMART-ADLO) REPRESENTED BY (RTEA).6 SMART contested the alleged disaffiliation
NESTOR FULMINAR, Petitioner, v. REN TRANSPORT through a letter dated 4 April 2005.7chanrobleslaw
CORP. AND/OR REYNALDO PAZCOGUIN
III, Respondents. During the pendency of the disaffiliation dispute at the
DOLE-NCR, Ren Transport stopped the remittance to
DECISION SMART of the union dues that had been checked off from
the salaries of union workers as provided under the
SERENO, C.J.: CBA.8 Further, on 19 April 2005, Ren Transport voluntarily
recognized RTEA as the sole and exclusive bargaining
agent of the rank-and-file employees of their
company.9chanrobleslaw
136
On 6 July 2005, SMART filed with the labor arbiter a The NLRC issued a decision13 affirming the labor arbiter's
complaint for unfair labor practice against Ren Transport.10 finding of unfair labor practice on the part of Ren
Transport. Union dues were ordered remitted to SMART.
THE LABOR ARBITER'S RULING
The NLRC also awarded moral damages to SMART,
The labor arbiter rendered a decision11 finding Ren saying that Ren transport's refusal to bargain was inspired
Transport guilty of acts of unfair labor practice. The former by malice or bad faith. The precipitate recognition of RTEA
explained that since the disaffiliation issue remained evidenced such bad faith, considering that it was done
pending, SMART continued to be the certified collective despite the pendency of the disaffiliation dispute at the
bargaining agent; hence, Ren Transport's refusal to send DOLE-NCR.
a counter-proposal to SMART was not justified. The labor
arbiter also held that the company's failure to remit the Ren Transport filed a motion for
union dues to SMART and the voluntary recognition of reconsideration14 alleging, among others, that the NLRC
RTEA were clear indications of interference with the failed to resolve all the arguments the former had raised in
employees' exercise of the right to self-organize. its memorandum of appeal.

Both parties elevated the case to the National Labor The NLRC denied the motion for
Relations Commission (NLRC). SMART contested only reconsideration,15 prompting Ren Transport to file a Rule
the failure of the labor arbiter to award damages. 65 petition with the CA.16chanrobleslaw

Ren Transport challenged the entire Decision, assigning THE CA RULING

four errors in its Memorandum of Appeal, namely: (1)
SMART was no longer the exclusive bargaining agent; (2)
Ren Transport did not fail to bargain collectively with
SMART; (3) Ren Transport was not obliged to remit dues
to SMART; and (4) SMART lacked the personality to sue
Ren Transport.12 All the assigned errors were based on
the assertion that SMART had lost its majority status.
On 30 January 2009, the CA rendered a
decision17 partially granting the petition. It deleted the
award of moral damages to SMART, but affirmed the
NLRC decision on all other matters. The CA ruled that
SMART, as a corporation, was not entitled to moral
damages.18chanrobleslaw

The appeals were consolidated. On the contention that the NLRC decided the case without
considering all the arguments of Ren Transport, the CA
THE NLRC RULING found that the latter had passed upon the principal issue
of the existence of unfair labor practice.
137

Hence, both parties appealed to this Court.
THE ISSUES
Based on the foregoing facts and arguments raised in the
petitions, the threshold issues to be resolved are the
following: (1) whether Ren Transport committed acts of
unfair labor practice; (2) whether the decision rendered by
the NLRC is valid on account of its failure to pass upon all
the errors assigned by Ren Transport; and (3) whether
SMART is entitled to moral damages.
OUR RULING
We deny the petitions for lack of merit.
I petition for a certification election. If there is no such
Ren Transport committed acts of unfair labor practice.
Ren Transport violated its duty to bargain collectively
with SMART.
Ren Transport concedes that it refused to bargain
collectively with SMART. It claims, though, that the latter
ceased to be the exclusive bargaining agent of the rank-
and-file employees because of the disaffiliation of the
majority of its members.19chanrobleslaw
The argument deserves no consideration.
Violation of the duty to bargain collectively is an unfair
labor practice under Article 258(g) of the Labor Code. An
138
instance of this practice is the refusal to bargain
collectively as held in General Milling Corp. v. CA.20 In that
case, the employer anchored its refusal to bargain with
and recognize the union on several letters received by the
former regarding the withdrawal of the workers'
membership from the union. We rejected the defense,
saying that the employer had devised a flimsy excuse by
attacking the existence of the union and the status of the
union's membership to prevent any
negotiation.21chanrobleslaw
It bears stressing that Ren Transport had a duty to bargain
collectively with SMART. Under Article 263 in relation to
Article 267 of the Labor Code, it is during the freedom
period — or the last 60 days before the expiration of the
CBA — when another union may challenge the majority
status of the bargaining agent through the filing of a
petition filed during the freedom period, then the employer
"shall continue to recognize the majority status of the
incumbent bargaining agent where no petition for
certification election is filed."22chanrobleslaw
In the present case, the facts are not up for debate. No
petition for certification election challenging the majority
status of SMART was filed during the freedom period,
which was from November 1 to December 31, 2004 — the
60-day period prior to the expiration of the five-year CBA.
SMART therefore remained the exclusive bargaining
agent of the rank-and-file employees.
Given that SMART continued to be the workers' exclusive
bargaining agent, Ren Transport had the corresponding
duty to bargain collectively with the former. Ren
Transport's refusal to do so constitutes an unfair labor
practice.
Consequently, Ren Transport cannot avail itself of the
defense that SMART no longer represents the majority of
the workers. The fact that no petition for certification
election was filed within the freedom period prevented Ren
Transport from challenging SMART'S existence and
membership.
Moreover, it must be stressed that, according to the labor
arbiter, the purported disaffiliation from SMART was
nothing but a convenient, self-serving excuse.23 This
factual finding, having been affirmed by both the CA and
the NLRC, is now conclusive upon the Court.24 We do not
see any patent error that would take the instant case out
of the general rule.
Ren Transport interfered with the exercise of the
employees' right to self-organize.
Interference with the employees' right to self-organization
is considered an unfair labor practice under Article 258 (a)
of the Labor Code. In this case, the labor arbiter found that
the failure to remit the union dues to SMART and the
voluntary recognition of RTEA were clear indications of
interference with the employees' right to self-
organization.25cralawred It must be stressed that this
finding was affirmed by the NLRC and the CA; as such, it
is binding on the Court, especially when we consider that
it is not tainted with any blatant error. As aptly pointed out
by the labor arbiter, these acts were ill-timed in view of the
139
existence of a labor controversy over membership in the
union.26chanrobleslaw
Ren Transport also uses the supposed disaffiliation from
SMART to justify the failure to remit union dues to the latter
and the voluntary recognition of RTEA. However, for
reasons already discussed, this claim is considered a lame
excuse that cannot validate those acts.
II.
The NLRC decision is valid.
Ren Transport next argues that the decision rendered by
the NLRC is defective considering that it has failed to
resolve all the issues in its Memorandum of
Appeal.27chanrobleslaw
We do not agree.
Section 14, Article VIII of the 1987 Constitution, states that
"[n]o decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the
law on which it is based." It has been held that the
constitutional provision does not require a "point-by-point
consideration and resolution of the issues raised by the
parties."28chanrobleslaw
In the present case, the decision shows that the NLRC
resolved the focal issue raised by Ren Transport: whether
or not SMART remained the exclusive bargaining agent,
such that Ren Transport could be found guilty of acts of
unfair labor practice. We quote the NLRC
discussion:ChanRoblesVirtualawlibrary
At the outset, let it be stated that insofar as the principal
issue of whether unfair labor practice was committed by
respondents, there is no occasion to find, or even
entertain, doubts that the findings and conclusion of the
Labor Arbiter that unfair labor practice (ULP) was
committed against the complainants, are infused with
serious errors. We quote:ChanRoblesVirtualawlibrary
[I]t is our considered view that the respondents committed
acts of unfair labor practice even if the CBA between the
complainant union and respondent company already
expired and majority of the workers of the existing
bargaining agent disaffiliated therefrom, formed its own
union and have it registered as an independent one, still
the respondent Company has the duty to bargain
collectively with the existing bargaining agent. It bears
stressing that the disaffiliation issue of the members of the
complainant union is still pending before the DOLE and
has not yet attained its finality; that there is no new
bargaining agent certified yet by the DOLE, there is no
legal basis yet for the respondent company to disregard
the personality of the complainant union and refused or
ignored the agent for renewal of its CBA. It is still the
certified collective bargaining agent of the workers,
because there was no new [u]nion yet being certified by
the DOLE as the new bargaining agent of the workers.
The above discourse shows the factual and legal bases for
the NLRC's resolution of the issue of whether Ren
Transport committed unfair labor practice and thereby
satisfies the constitutional provision on the contents of a
decision. The NLRC succeeded in disposing of all the
arguments raised by Ren Transport without going through
every argument, as all the assigned errors hinged on the
majority status of SMART.29 All of these errors were
140
addressed and settled by the NLRC by finding that SMART
was still the exclusive bargaining agent of the employees
of Ren Transport.
As aptly stated by the CA, a court or any other tribunal is
not required to pass upon all the errors assigned by Ren
Transport; the resolution of the main question renders the
other issues academic or inconsequential.30chanrobleslaw
At this juncture, it is well to note that addressing every one
of the errors assigned would not be in keeping with the
policy of judicial economy. Judicial economy refers to
"efficiency in the operation of the courts and the judicial
system; especially the efficient management of litigation
so as to minimize duplication of effort and to avoid wasting
the judiciary's time and resources."31 In Salud v. Court of
Appeals,32 the Court remarked that judicial economy is a
"strong [norm] in a society in need of swift justice."33 Now,
more than ever, the value of brevity in the writing of a
decision assumes greater significance, as we belong to an
age in which dockets of the courts are congested and their
resources limited.
III.
SMART is not entitled to an award of moral damages.
We now address the petition of SMART, which faults the
CA for deleting the grant of moral
34
damages. chanrobleslaw
We hold that the CA correctly dropped the NLRC's award
of moral damages to SMART. Indeed, a corporation is not,
as a general rule, entitled to moral damages. Being a mere
artificial being, it is incapable of experiencing physical PHIL-JAPAN WORKERS UNIONSOLIDARITY OF
suffering or sentiments like wounded feelings, serious UNIONS IN THE PIDLIPPINES FOR EMPOWERMENT
anxiety, mental anguish or moral shock.35chanrobleslaw AND REFORMS (P JWU-SUPER), MEDARBITER
CLARISSA G. BELTRANLERIOS and SECRETARY
Although this Court has allowed the grant of moral PATRICIA A. STO. TOMAS OF THE DEPARTMENT OF
damages to corporations in certain situations,36 it must be LABOR AND EMPLOYMENT, Petitioners,
remembered that the grant is not automatic. The claimant vs.
must still prove the factual basis of the damage and the PHIL-JAPAN INDUSTRIAL MANUFACTURING
causal relation to the defendant's acts.37 In this case, while CORPORATION, Respondent.
there is a showing of bad faith on the part of the employer
in the commission of acts of unfair labor practice, there is DECISION
no evidence establishing the factual basis of the damage
on the part of SMART. DEL CASTILLO, J.:

WHEREFORE, premises considered, the petitions The court or tribunal exercising quasi-judicial functions is
are DENIED. The Decision dated 30 January 2009 and the bereft of any right or personality to question the decision
Resolution dated 20 May 2009 issued by the Court of of an appellate court reversing its decision.1
Appeals in CA-G.R. SP No. 100722 are AFFIRMED.
These consolidated Petitions for Review on
SO ORDERED.chanRoblesvirtualLawlibrary Certiorari2 assail the Decisions of the Court of Appeals
(CA)issued in two separate petitions, but involving the
same issue of whether Section 17, Rule VIII of Department
REPUBLIC OF THE PHILIPPINES, represented by the Order No. 40-03 is unconstitutional. The first is the
HONORABLE SECRETARY OF LABOR AND Decision3 dated March 18, 2005 in CA-G.R. SP No.
EMPLOYMENT (DOLE), Petitioner, 80603, which granted the Petition for Certiorari4 filed by
vs. herein respondent Namboku Peak, Inc. (Namboku)
NAMBOKU PEAK, INC., Respondent. challenging the October 22, 2003 letter-resolution5 of
Secretary of Labor and Employment Patricia A. Sto.
x-----------------------x Tomas. Said letter-resolution affirmedthe Med-Arbiter’s
Order6 dated June 17, 2003 denying Namboku’s motion to
G.R. No.170091 defer the conduct of certification election pending
resolution of its appeal.

141
The second is the Decision7 dated January 19, 2005 in
CA-G.R. SP. No. 80106, which granted the Petition for
Certiorari8 filed by hereinrespondent PhilJapan Industrial
Manufacturing Corporation (Phil-Japan) seeking to
declare Section 17, Rule VIII of Department Order No. 40-
03 unconstitutional for unduly depriving it of its right to
appeal the August 25, 2003 Decision9 of the MedArbiter.
Said Decision of the Med-Arbiter, in turn, granted the
Petition 10 of PhilJapan Workers Union-Solidarity of
Unionsin the Philippines for Empowerment and Reforms
(PJWU-SUPER) seeking to determine the exclusive
bargaining representative in Phil-Japan and ordered the
conduct of certification election.
Factual Antecedents
The facts, insofar as G.R. No. 169745 is concerned and
as culled from the records, are as follows:
Namboku is a domestic corporation engaged in the
business of providing manpower services to
variousclients, mainly airline companies. On April 28,
2003, the Philippine Aircraft Loaders and Cargo
Employees AssociationSolidarity of Unions in the
Philippines for Empowerment and Reforms (PALCEA-
SUPER) filed a Petition11 for direct certification election
before the Med-Arbiter seeking to represent the rank-and-
file employees of Namboku assigned at the Cargo and
Loading Station of the Philippine Airlines (PAL) in Ninoy
Aquino International Airport. In support of its Petition,
PALCEA-SUPER alleged that it is a local chapter affiliate
of Solidarity of Unions in the Philippines for Empowerment
and Reforms; that its members are composed of regular
142
rank-and-file employees of Namboku assigned at said
Cargo and Loading Station of PAL; that out of the 155
regular rank-and-file employees of Namboku, 122 or 78%
are its members; and, that Namboku is an unorganized
establishment.
Namboku opposed the Petition12 on the ground of
inappropriateness. It claimed that the members of the
PALCEA-SUPER are project employees. Hence, they
cannot represent its regular rank-and-file employees. It
emphasized that their individual ProjectEmployee
Contract clearly provides that their employment is for a
fixed period of time and dependent upon its Services
Agreement13 with PAL. However, PALCEA-SUPER
misrepresented the status of its members by claimingthat
they are regular employees of Namboku.
On June 17, 2003, the Med-Arbiter issued an
Order14 holding that the members of PALCEA-SUPER are
regular employees of Namboku. She explained that while
Namboku informed them at the time of their engagement
that their employment is for a fixed period of time, it did
not, however, apprise them that the same is for a specific
activity, nor was the completion or termination made
known to them at the time oftheir engagement. Also,
asopposed to the nature of its business, the tasks for
which Namboku engaged their services do not appear to
be separate and independent activities with pre-
determined duration or completion. The Med-Arbiter thus
granted the Petition and ordered the conduct of
certification election. The dispositive portion of the Order
reads:
WHEREFORE, premises considered, certification election
is hereby ordered among the regular rank and file
employees of NAMBOK[U] PEAK, INC., subject to pre-
election conference, with the following choices:
1. Philippine Aircraft Loaders and Cargo
Employees Association – Solidarity of Unions in the
Philippines for Empowerment and Reforms
(PALCEA-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed
to submit within ten (10) days from receipt hereof, 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 months prior to this
issuance.
SO ORDERED.15
Namboku appealed16 the Med-Arbiter’s Order to the
Secretary of the Labor, maintaining that the members of
PALCEA-SUPER are mere project employees. It insisted
that the combination of project and regular employees
would render a bargaining unit inappropriate for lack of
substantial-mutual interest.
In the meantime, on July 29, 2003, Namboku received a
summons setting the pre-election conference on July 31,
2003 and stating that the Order granting the conduct of a
certification election in an unorganized establishment is
not appealable.17
143
Whereupon, Namboku filed a Manifestation and
Motion,18 as well as a Supplemental Motion and
Manifestation,19 seeking to suspend the conduct of
certification election pending resolution of its appeal. It
contended that Section 17,20 Rule VIII of Department
Order No. 40-03 prohibiting the filing of an appeal from an
order granting the conduct of a certification election in an
unorganized establishment is unconstitutional because it
runs counter to Article 25921 of the Labor Code.
In a letter-resolution 22dated October 22, 2003, however,
the Secretary of Labor denied the appeal and affirmed the
Med-Arbiter’s June 17, 2003 Order. In rejecting
Namboku’s contention that Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional, the
Secretary of Labor ratiocinated that unless said
Department Order is declared by a competent court as
unconstitutional, her office would treat the same as valid.
Undeterred, Namboku filed before the CA a Petition for
Certiorari,23 which was docketed as CA-G.R. SP No.
80630. Namboku imputed grave abuse of discretion on the
part of the Secretary ofLabor in (i) not resolving the issue
of appropriateness and (ii) rejecting its appeal based on
an invalid provision of Department Order 40-03.
With regard to G.R. No. 170091, an examination ofthe
records reveals the following facts:
Phil-Japan is a domestic corporation engaged in
manufacturing mufflers, chassis and other car accessories
for local and international markets. On June 6, 2003,
PJWU-SUPER filed before the Med-Arbiter a
Petition24 seeking to determine the sole and exclusive
bargaining representative of rank-and-file employees in
Phil-Japan. PJWU-SUPER alleged that it is a legitimate
labor organization; that out of the 100 rank-and-file
employeesof Phil-Japan, 69 or 69% are members of
PJWU-SUPER; that Phil-Japan is an unorganized
establishment; and, that there has been no certification
election conducted during the last 12 months prior to the
filing of its Petition.
Phil-Japan opposed the Petition,25 claiming that the
members of PJWUSUPER are not its employees. It
alleged that the listed members of PJWUSUPER have
either resigned, finished their contracts, orare employees
of its job contractors CMC Management and PEPC
Management Services. Itthus prayed for the dismissal of
the Petition or, inthe alternative, suspension of the
proceedings pending determination of the existence of
employer-employee relationship.
On August 25, 2003, the Med-Arbiter rendered a
Decision26 ordering the conduct of certification election. It
held, among others, that the documents submitted are not
sufficient to resolve the issue of the existence of
employeremployee relationship.Considering, however,
that Section 15,Rule VIII of the Rules Implementing Book
V ofthe Labor Code prohibits the suspension of
proceedings based on the pendency of such issue, she
allowed the employees to vote. Their votes, however, shall
be segregated, and the determination of whether the
number of such segregated ballots is material to the
outcome of the election shall be made after the conduct of
the election. The dispositive portion of the Decision reads:
144
WHEREFORE, premises considered, this petition for
certification election is hereby GRANTED. Certification
election is hereby ordered conducted among the regular
rank-and-file workers of Phil-Japan Ind. Mfg. Corporation
with the following choices:
1. Phil-Japan Workers Union-Solidarityof Unions in
the Philippines for Empowerment and Reforms
(PJWU-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed
to submit within ten (10) days from receipt hereof, 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 months prior to this
issuance.
SO ORDERED.27
Aggrieved, Phil-Japan appealed28 the Decision of the
Med-Arbiter to the Office of the Secretary of Labor
asserting that the Med-Arbiter gravely abused her
discretion in not resolving the issue ofwhether employer-
employee relationship existed between the parties.
In a hearing held on October 7, 2003, Hearing Officer
Lourdes T. Ching informed Phil-Japan that its appeal will
not be acted upon pursuant to Section 17, Rule VIII of
Department Order No. 40-03and that the certification
election will proceed accordingly.
Undaunted, Phil-Japan filed before the CA a Petition for
Certiorari,29 which was docketed asCA-G.R. SP No.
80106. Phil-Japan ascribedgrave abuse of discretion on
the part of the Med-Arbiter in refusing torule on the
existence of employer-employee relationship despite the
presence of sufficient evidence on the matter. It also
claimed thatthe Secretary of Labor gravely abused her
discretion in refusing to act on its appeal despite the
existence of such right. As to the Secretary of Labor’s
reliance on Section 17, Rule VIII of Department Order No.
40-03, PhilJapan asserted that the samecannot overturn
the clear provision of Article 259 of the Labor Code.
Rulings of the Court of Appeals
On March 18, 2005, the CA issued its Decision30 in CA-
G.R. SP No. 80603 (now subject of G.R. No.
169745)granting Namboku’s Petition and reversing the
October 22, 2003 letter-resolution of the Secretary of
Labor. It sustained Namboku’s position that the members
of PALCEA-SUPER are project employees and, hence,
they are not similarly situated with the company’s regular
rank-and-file employees. The CA also nullified Section 17,
Rule VIII of Department Order No. 40-03 for being in
conflict with Article 259 of the Labor Code.
The Secretary of Labor filed a Motion for
Reconsideration.31 This prompted Namboku to file a
Motion to Expunge32 on the ground that the Secretary of
Labor is a mere nominalparty who has no legal standing
to participate or prosecute the case. It argued that the
Secretary of Labor should have refrained from filing the
145
said Motion for Reconsideration and should
havemaintained the cold neutrality of an impartial judge.
On September 15, 2005, the CA issued a
Resolution33 denying the Secretary of Labor’s Motion for
Reconsideration on the ground, among others, that she is
merely a nominal party to the case and has no personal
interest therein.
Anent CA-G.R. No. 80106 (now subject of G.R.170091),
the CA, in its January 19, 2005 Decision,34 reversed and
set aside the ruling of the Med-Arbiter. It likewise agreed
with Phil-Japan that before extending labor benefits, the
determination of whether anemployer-employee
relationship exists is a primordial consideration. And
based on the documents submitted, the CA was convinced
that out of the 69 members of PJWU-SUPER, 67 were not
employees of Phil-Japan.
The CA further declared that for being violative of Article
259 of the Labor Code, Section 17, Rule VIII of
Department Order No. 40-03 has no legal force and effect.
PJWU-SUPER and DOLE filed separate Motions for
Reconsideration.35 On September 12, 2005, the CA
issued a Resolution36 denying both motions and upholding
its January 19, 2005 Decision.
Issues
On November 3, 2005, the Secretary of Labor filed before
this Court a Petition for Review on Certiorari docketed as
G.R. No. 170091 assailing the January 19, 2005 Decision
in CA-G.R. SP No. 80106. She avers that:
THE COURT OF APPEALS ERRED IN DECLARING AS
OF NO LEGAL FORCE AND EFFECT SECTION 17,
RULE VIII OFD.O. 40-03.37
Then on November 11, 2005,the Secretary of Laborfiled
another Petition for Review on Certiorari docketed as G.R.
No. 169745 challenging the March 18, 2005 Decision in
CA-G.R. SP No. 80603. She anchors her Petition on the
following issues:
I.
WHETHER X X X THE COURT OF APPEALS
COMMITTED GRAVE ERROR IN DECLARING SECTION
17, RULE VIII OF DEPARTMENT ORDER NO. 40-03
NULL AND VOID FOR BEING IN CONFLICT WITH
ARTICLE 259 OF THE LABOR CODE, AS AMENDED.
II.
WHETHER PROJECT EMPLOYEES MAY BE
INCLUDED IN THE PETITION FOR CERTIFICATION
ELECTION INVOLVING REGULAR EMPLOYEES.38
Since both Petitions seek to uphold the validity of Section
17, Rule VIII of Department Order No. 40-03, this Court
ordered their consolidation.39
Secretary of Labor’s Arguments
146
The Secretary of Labor insists that Section 17, Rule VIII of
Department Order No. 40-03 is in harmony with Article 259
of the Labor Code for it does not deny the aggrieved party
in an unorganized establishment the right to appeal. It
merely defers the exercise of such rightuntil after the
certification election shall have been conducted. In the
meantime, the aggrieved party may raise any issue arising
therefrom as a protest. Such rule, according to the
Secretary of Labor, is in consonance with the policy of the
State toencourage the workers to organize and with the
mandate ofthe Med-Arbiter to automatically conduct a
certification election.
The Secretary of Labor likewise argues that Article 259
applies only when there is a violation of the rules and
regulations in the conduct of the certification election. It
does not cover the order ofthe Med-Arbiter granting the
conduct of certification election. Moreover, the appeal
contemplated under Article 259 must be filed by a party to
the certification election proceedings, to which the
employer, Namboku, is a mere stranger.
The Secretary of Labor further contends that the
combination of regular rank-and-file employees and
project employees in a certified bargaining unit does not
pose any legal obstacle.
Namboku’s Arguments
In opposing the Petition, Namboku questions the locus
standi of the Secretary of Labor, insisting that she is
merely a nominal party in the Petitions for Certiorari filed
with the CA. Namboku strongly stresses that as a quasi-
judicial officer, the Secretary of Labor should detach
herself from cases where her decision is appealed to a
higher court for review. Besides,her office never
participated or defended the validity of Section 17
beforethe CA. It was only after the CA rendered its
Decision nullifying the subject provision of Department
Order No. 40-03 that the Secretary of Labor took an active
stance to defend the validity thereof.
With respect to the substantive aspect, Namboku remains
steadfast in its position that Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional for it
unduly restricts the statutory right of the management to
appeal the decision of the Med-Arbiter to the Secretary of
Labor in an unorganized establishment. It created a
distinction that does not appear in Article 259 of the Labor
Code that it seeks to implement.
Namboku likewise echoes the ruling of the CA that there
exists a statutory difference between regular and project
employees.1âwphi1 Theyhave divergent duties,
responsibilities, and status and duration of employment.
They do not receive the same benefits. Hence, they
cannot unite into a homogenous or appropriate bargaining
unit.
Phil-Japan’s Arguments
In defending the Decision of the CA, Phil-Japan argues
that Section 17, Rule VIII of Department Order No. 40-03
restricting the statutory right of the employer to appeal will
not stand judicial scrutiny. It stresses that the authority of
the Med-Arbiter to determine the existence of an
147
employer-employee relationship and the right of a party to
appeal the former’s decision thereon to the Secretary of
Labor are already settled. Phil-Japan insists that under
Article 259 of the Labor Code the remedy of appeal
isavailable to any party for the purpose of assailing the
disposition of the Med-Arbiter allowing the conduct of
certification election without any distinction whether the
establishment concerned is organized or unorganized.
Our Ruling
The Petitions are denied. The Secretary of Labor isnot the
real party-ininterest vested with personality to file the
present petitions. A real party-in-interest is the party who
stands to bebenefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit.40 As thus
defined, the real parties-in-interest in these cases would
have been PALCEA-SUPER and PJWU-SUPER. It would
have been their duty to appear and defend the ruling of the
Secretary of Labor for they are the ones who were
interested that the same be sustained. Of course, they had
the option not to pursue the case beforea higher court, as
what they did in these cases. As to the Secretary of Labor,
she was impleaded in the Petitions for Certiorari filed
before the CA as a nominal party because one of the
issues involved therein was whether she committed an
error of jurisdiction. But that does not make her a real
party-in-interest or vests her withauthority to appeal the
Decisions of the CA in case it reverses her ruling. Under
Section 1,41 Rule 45 of the Rules of Court, only real
parties-in-interest who participated in the litigation of the
case before the CA canavail of an appeal by certiorari. In
Judge Santiago v. Court of Appeals,42 Judge Pedro T.
Santiago rejected the amicablesettlement submitted by
the parties in an expropriation proceeding pending before
his sala for being manifestly iniquitous to the government.
When the CA reversed his decision, Judge Santiago,
apparently motivated by his sincere desire to protect the
government, filed a petition before this Court seeking the
reinstatement of his ruling. In denying his petition, this
Court ruled that:
x x x Section 1 of Rule 45 allows a party to appeal by
certiorari from a judgment of the Court of Appeals by filing
withthis Court a petition for review on certiorari. But
petitioner judge was not a party either in the expropriation
proceedings or in the certiorari proceeding in the Court of
Appeals. His being named as respondent in the Court of
Appeals was merely to comply with the rule that in original
petitions for certiorari, the court or the judge, in his capacity
as such, should be named as party respondent because
the question in such a proceeding is the jurisdiction of the
court itself. (See Mayol v. Blanco, 61 Phil. 547 [1935], cited
in Commentson the Rules of Court, Moran, Vol. II, 1979
ed., p. 471). "In special proceedings, the judge whose
order is under attack is merely a nominal party; wherefore,
a judge in his official capacity, should not be made to
appear as a party seeking reversal of a decision that is
unfavorable to the action taken by him. A decent regard for
the judicial hierarchy bars a judge from suing against the
adverse opinion of a higher court, x x x." (Alcasid v.
Samson, 102 Phil. 735, 740 [1957]).43
A similar ruling was arrived at in Government Service
Insurance System v. The Hon. Court of Appeals (8th
Div.).44 In that case, upon petition of GSIS, the Securities
148
and Exchange Commission (SEC) issued a cease and
desist order restraining the use of proxies during the
scheduled annual stockholders’ meeting of Manila Electric
Company.When the private respondents therein filed a
petition for certiorari and prohibition, the CA invalidated the
SEC’s cease and desist order. Uncomfortable with the
CA’s ruling, SEC appealed to this Court. In denying SEC’s
appeal, this Court ratiocinated as follows:
x x x Under Section 1 of Rule45, which governs appeals
by certiorari, the right to file the appeal is restricted to "a
party," meaning that only the real parties-ininterest who
litigated the petition for certiorari before the Court of
Appeals are entitled to appeal the same under Rule 45.
The SEC and its two officers may have been designated
as respondents in the petition for certiorari filed with the
Court of Appeals, but under Section 5 ofRule 65 they are
not entitled to be classified as real parties-in-interest.
Under the provision, the judge, court, quasijudicial agency,
tribunal, corporation, board, officer or person to whom
grave abuse of discretion is imputed (the SEC and its two
officers in this case) are denominated only as public
respondents.The provision further states that "public
respondents shall not appear in or file an answer or
comment to the petition or any pleading therein." Justice
Regalado explains:
[R]ule 65 involves an original special civil action
specifically directed against the person, court, agency or
party a quo which had committed not only a mistake of
judgment but an error of jurisdiction, hence should be
made public respondents in that action brought to nullify
their invalidacts. It shall, however be the duty of the party
litigant, whether in an appeal under Rule 45 or in a special
civil action in Rule65, to defend in his behalf and the party
whose adjudication is assailed, as he is the one interested
in sustaining the correctness of the disposition or the
validity of the proceedings.45
It does not escape the attention of this Court that G.R. No.
170091 was cleverly captioned as "Phil-Japan Workers
Union Solidarity of Unions in the Philippines for
Empowerment and Reforms (PJWU-SUPER), Med-
Arbiter Clarissa G. Beltran-Lerios and Secretary Patricia
Sto.Tomas of the Department of Labor and Employment,
petitioners, versus Court of Appeals46 and Phil-Japan
Industrial Manufacturing Corporation." But the same was
actually filed by the Secretary of Labor all by herself. The
body of the Petition does not include PJWU-SUPER as
one of the parties. Neither did its agent or representative
sign the verification and certification against forum-
shopping. In other words, PJWUSUPER had no
participation in the preparation and filing of the Petition in
G.R. No. 170091.
Another reason that heavily militates against entertaining
these Petitions is that the Secretary of Laborshould have
remained impartial and detached from the cases she has
decided even if the same are appealed to a higher court
for review.
In Pleyto v. PNP-Criminal Investigation & Detection
Group,47 the Ombudsman ordered the dismissal of
Salvador A. Pleyto from the service. When Pleyto filed a
Petition for Review questioning his dismissal before the
CA, the Ombudsman intervened. The Ombudsman
149
argued that as a competent disciplining body, it has the
right "to defend its own findings of factand law relative to
the imposition of its decisions and ensure that its
judgments inadministrative disciplinary cases [are] upheld
by the appellate court."48 Further, as "the agency which
rendered the assailed Decision, it is bestequipped with the
knowledgeof the facts, laws and circumstances that led to
the finding of guilt against petitioner."49 The CA allowed
the Ombudsman to intervene and admitted the latter’s
Comment and Memorandum.
In ruling that the CA erred in allowing the Ombudsman to
actively participate in the case, this Court declared that:
It is a well-known doctrine that a judge should detach
himself from cases where his decision is appealed toa
higher court for review. The raison d'etrefor such doctrine
is the fact that a judgeis not an active combatant in such
proceeding and must leave the opposing parties to
contend their individual positions and the appellate court
to decide the issues without his active participation. When
a judge actively participates in the appeal of his judgment,
he, in a way, ceases to be judicial and has become
adversarial instead.
The court or the quasi-judicial agency must be detached
and impartial, not only when hearing and resolving the
case before it, but even when its judgment is brought on
appeal before a higher court. The judge of a court or the
officer of a quasi-judicial agency must keep in mind thathe
is an adjudicator who must settle the controversies
between parties in accordance with the evidence and the
applicable laws, regulations, and/or jurisprudence. His
judgment should already clearly and completely state his
findings of fact and law. There must be no more need for
him to justify further his judgment when it is appealed
before appellate courts. When the court judge orthe quasi-
judicial officer intervenes as a party in the appealed case,
he inevitably forsakes his detachment and impartiality, and
his interest in the case becomes personal since his
objective now is no longer only to settle the controversy
between the original parties (which he had already
accomplished by rendering his judgment), but more
significantly, to refute the appellant’s assignment of errors,
defend his judgment, and prevent it from being overturned
on appeal.50
But the Secretary of Labor next contends that with the
nullification of Department Order No. 40-03, she has now
become a party adversely affected by the CA ruling. In
support of her contention, the Secretary of Labor poses
the question: who may now appeal the Decisionsof the CA
to the Supreme Court? Certainly, neither Namboku nor
Phil-Japan would appeala favorable decision.
The National Appellate Board v. P/Insp.
51
Mamauag provides the complete answer. Thus:
However, the government party that can appeal is not the
disciplining authority or tribunal which previously heard the
case and imposed the penalty of demotion or dismissal
from the service. The government party appealing must be
one that is prosecuting the administrative case against the
respondent. Otherwise, an anomalous situation will result
where the disciplining authority or tribunal hearing the
case, instead of being impartial and detached, becomes
150
an active participant in prosecuting the respondent. Thus,
in Mathay, Jr. v. Court of Appeals, decided after Dacoycoy,
the Court declared:
To be sure, when the resolutions of the Civil Service
Commission were brought before the Court of Appeals,
the Civil Service Commission was included only as a
nominal party. As a quasi-judicial body, the Civil Service
Commission can be likened to a judge who should "detach
himself from cases where his decision is appealed to a
higher court for review."
In instituting G.R. No. 126354, the Civil Service
Commission dangerously departed from its role as
adjudicator and became an advocate. Its mandated
function is to "hear and decide administrative cases
instituted by or brought before it directly or on appeal,
including contested appointments and to review decisions
and actions of its offices and agencies," not to litigate.52
Here, both cases emanated from the petitions for
certification election filed with the Med-Arbiter and
subsequently appealed to the Secretary of Labor. She had
occasion to hear the parties’ respective contentions and
rule thereon. As the officer who rendered the decision now
subject of these cases, the Secretary of Labor should have
remained impartial and detached from the time the cases
reached her until the same were being scrutinized on
appeal.53
True, the issue of whether Section 17, Rule VIII
ofDepartment Order No. 40-03 is unconstitutional is a
matter of great concern and deserves everyone’s
attention. But this Court cannot pass upon and resolve the
same in these Petitions. Otherwise, it will countenance the
objectionable actions of the Secretary of Labor and run
afoul of the abovecited settled decisions. WHEREFORE,
for the foregoing reasons, the Petitions in G.R. Nos.
169745 and 170091 are DENIED.
SO ORDERED.
T & H SHOPFITTERS CORPORATION/GIN QUEEN
CORPORATION, STINNES HUANG, BEN HUANG AND
ROGELIO MADRIAGA, Petitioners, v. T & H Callorina,6 Romeo Blanco, Gilbert M. Garcia, Carlos F.
SHOPFITTERS CORPORATION/GIN QUEEN
WORKERS UNION, ELPIDIO ZALDIVAR, DARIOS
GONZALES, WILLIAM DOMINGO, BOBBY CASTILLO,
JIMMY M. PASCUA, GERMANO M. BAJO, RICO L.
MANZANO, ALLAN L. CALLORINA, ROMEO BLANCO,
GILBERT M. GARCIA, CARLOS F. GERILLO,
EDUARDO A. GRANDE, EDILBRANDO MARTICIO,
VIVENCIO SUSANO, ROLANDO GARCIA, JR.,
MICHAEL FABABIER, ROWELL MADRIAGA, PRESNIL
TOLENTINO, MARVIN VENTURA, FRANCISCO
RIVARES, PLACIDO TOLENTINO AND ROLANDO
ROMERO, Respondents.
DECISION
MENDOZA, J.:
Assailed in this petition for review on certiorari under Rule
45 of the Rules of Court are: 1) the November 12, 2009
151
Decision1 of the Court of Appeals (CA), in CA–G.R. SP No.
107188, which affirmed the July 24, 2007 and November
13, 2008 Decision2 of the National Labor Relations
Commission (NLRC); and 2) its March 24, 2010
Resolution3 denying reconsideration of its decision.
The Facts
On September 7, 2004, the T&H Shopfitters
Corporation/Gin Queen Corporation workers union (THS–
GQ Union) and Elpidio Zaldivar,4 Darios Gonzales,
William Domingo, Bobby Castillo, Jimmy M. Pascua,
Germano M. Bajo,5 Rico L. Manzano, Allan L.
Gerillo, Eduardo A. Grande, Edilbrando Marticio, Vivencio
Susano, Rolando Garcia, Jr., Michael Fababier, Rowell
Madriaga, Presnil Tolentino, Marvin Ventura, Francisco
Rivares, Placido Tolentino, and Rolando Romero
(respondents), all of whom are officers and/or members of
THS–GQ union, filed their Complaint7 for Unfair Labor
Practice (ULP) by way of union busting, and Illegal
Lockout, with moral and exemplary damages and
attorney’s fees, against T&H Shopfitters Corporation (T&H
Shopfitters) and Gin Queen Corporation (Gin Queen)
(collectively referred to as “petitioners”), before the Labor
Arbiter (LA).
Respondents treated T&H Shopfitters and Gin Queen as
a single entity and their sole employer. In their desire to
improve their working conditions, respondents and other
employees of petitioners held their first formal meeting on
November 23, 2003 to discuss the formation of a union.
The following day or on November 24, 2003, seventeen
(17) employees were barred from entering petitioners’
factory premises located in Castillejos, Zambales, and
ordered to transfer to T&H Shopfitters’ warehouse at Subic
Bay Freeport Zone (SBFZ) purportedly because of its
expansion. Afterwards, the said seventeen (17)
employees were repeatedly ordered to go on forced leave
due to the unavailability of work.
On December 18, 2003, the Department of Labor and
Employment (DOLE), Regional Office No. III issued a
certificate of registration in favor of THS–GQ Union.
Respondents contended that the affected employees were
not given regular work assignments, while subcontractors
were continuously hired to perform their functions. This
development prompted respondents to seek the
assistance of the National Conciliation and Mediation
Board. Subsequently, an agreement between petitioners
and THS–GQ Union was reached. Petitioners agreed to
give priority to regular employees in the distribution of work
assignments. Respondents averred, however, that
petitioners never complied with its commitment but instead
hired contractual workers.
On March 24, 2004, THS–GQ Union filed a petition for
certification election. On July 12, 2004, an order was
issued to hold the certification election in both T&H
Shopfitters and Gin Queen. Eventually, the certification
election was scheduled on October 11, 2004.
Meanwhile, through a memorandum, dated August 17,
2004, petitioner Ben Huang (Huang), Director for Gin
Queen, informed its employees of the expiration of the
152
lease contract between Gin Queen and its lessor in
Castillejos, Zambales and announced the relocation of its
office and workers to Cabangan, Zambales. Some of the
respondents, who visited the site in Cabangan, discovered
that it was a “talahiban” or grassland. Later, the said union
officers and members were made to work as grass cutters
in Cabangan, under the supervision of a certain Barangay
Captain Greg Pangan. Due to these circumstances, the
employees assigned in Cabangan did not report for work.
As a consequence, the THS–GQ Union president was
made to explain why he should not be terminated for
insubordination. The other employees who likewise failed
to report in Cabangan were meted out with suspension.
On October 10, 2004, petitioners sponsored a field trip to
Iba, Zambales, for its employees. The officers and
members of the THS–GQ Union were purportedly
excluded from the field trip. On the evening of the field trip,
a certain Angel Madriaga, a sales officer of petitioners,
campaigned against the union in the forthcoming
certification election.
The following day or on October 11, 2004, the employees
were escorted from the field trip to the polling center in
Zambales to cast their votes. On October 13, 2004, the
remaining employees situated at the SBFZ plant cast their
votes as well. Due to the heavy pressure exerted by
petitioners, the votes for “no union” prevailed. On October
14, 2004, the THS–GQ Union filed its protest with respect
to the certification election proceedings.
Respondents averred that the following week after the
certification elections were held, petitioners retrenched
THG–GQ Union officers and members assigned at the
Zambales plant. Respondents claimed that the work
weeks of those employees in the SBFZ plant were
drastically reduced to only three (3) days in a month.
In its defense, Gin Queen, claiming that it is a corporation
separate and distinct from T&H Shopfitters, stressed that
respondents were all employees. Gin Queen claimed that
due to the decrease in orders from its customers, they had
to resort to cost cutting measures to avoid anticipated
financial losses. Thus, it assigned work on a rotational
basis. It was of the impression that the employees, who
opposed its economic measures, were merely motivated
by spite in filing the complaint for ULP against it.
In addition, Gin Queen explained that its transfer from
Castillejos, Zambales to Cabangan, Zambales was a
result of the expiration of its lease agreement with Myra D.
Lumibao (Myra), its lessor. Since the Cabangan site was
bare and still required construction, Gin Queen offered
work, to employees who opted to stay, on rotation as well.
In its Decision,8 dated December 21, 2005, the LA
dismissed respondents’ complaint and all their money
claims for lack of merit.
In dismissing the complaint, the LA explained:
x x x x.
In the case at bar, we carefully examined the grounds
raised by the complainants [herein respondents] as basis
for claiming that the respondents [herein petitioners]
153
committed unfair labor practices by way of illegal lockout,
one of which is the alleged transfer of 17 workers to Subic
Bay Freeport Zone, however, we are dismay (sic) to know
that not even one of these 17 workers is a complainant in
these cases. While the labor union may represent its
members in filing cases before this Office, at least these
members must show their intention to file a case by signing
in the complaint to prove that they have grievances against
their employer which was lacking in these cases. Further,
there was no showing that the transfer of these 17 workers
is considered an unfair labor practice of the respondents
considering that their transfer was effected long before the
union was organized.
We also analyzed the allegations of the complainants that
the transfer of the working cite (sic) of the respondent Gin
Queen Corporation was a part of the unfair labor practices
committed by the respondents, however, the complainants
failed miserably to controvert the documentary evidence
adduced by the respondent Gin Queen Corporation that
the lease contract agreement of the place had already
expired and it was the management prerogative to transfer
as a cost cutting measures. Again the transfer of the place
of work would not be considered as unfair labor practice.
Complainants alleged that the respondents committed
unfair labor practices by means of ‘lockout’ wherein the
respondents should have temporarily refused to provide
work to the complainants by a result of labor or industrial
dispute. Complainants failed to show that the rotation of
work for them is considered an unfair labor practice and
considered a ‘Lockout’. Complainants rather submitted
several notices showing that the company has no
sufficient orders coming from clients and does not have
enough raw materials for production as basis for these
complainants not to render work and be rotated, and thus
controvert their allegations that there was ‘lockout’
committed by the respondents. Further, the documentary
evidences adduced by the complainants clearly show that
respondents never terminated the complainants when
they were given their notices of suspension negating the
claim that there was ‘lockout’ committed by respondents.
x x x x.9
Aggrieved, respondents appealed to the NLRC. In its July
24, 2007 Decision, the NLRC reversed the LA decision
and ruled in favor of respondents. The dispositive portion
of the said decision reads:
WHEREFORE, the decision appealed from is
hereby REVERSED.
Respondents T & H Shopfitters Corp., Gin Queen Corp.
(or ‘MDL’, as it is now called), Stennis Huang, as well as
the presidents of the respondent corporations as of
November 2003 and the date of the execution of this
decision are hereby ordered to pay each of the
complainants moral and exemplary damages amounting
to P50,000.00 and P35,000.00 respectively. In addition,
they shall pay the complainants attorney’s fees equivalent
to ten percent (10%) of the total judgment award.
SO ORDERED.
In granting the appeal, the NLRC reasoned:
154
Based on the above–mentioned affidavits,10 it may be
concluded that the respondents [herein petitioners]
committed unfair labor practice acts consisting in
interfering with the exercise of the employees’ right to self–
organization (specifically, sponsoring a field trip on the day
preceding the certification election, warning the
employees of dire consequences should the union prevail,
and escorting them to the polling center) and
discriminating in regard to conditions of employment in
order to discourage union membership (assigning union
officers and active union members as grass cutters on
rotation basis).
xxxx
Furthermore, it is noteworthy that, based on their Articles
of Incorporation, T & H Corporation and Gin Queen
Corporation are engaged in the same line of business.
It should also be noted that respondents did not controvert
the allegations to the effect that Myra D. Lumibao, the
supposed lessor of respondent corporations, is the wife of
respondent Stennis Huang, and that Gin Queen
Corporation has been renamed ‘MDL’, but still carries on
the same business in the same premises using the same
machines and facilities. These circumstances, together
with the supposed assignment of respondent Stennis
Huang’s interest in Gin Queen Corporation to a third party
are badges of fraud that justify the piercing of the veil of
corporate fiction. x x x
Thus, based on the foregoing, respondents T & H
Shopfitters Corporation, Gin Queen Corporation (now
known as ‘MDL’) and Stennis Huang, as well as the
presidents of the respondent corporations as of November
2003 and the date of execution of this decision may be
held liable for unfair labor practice and the corresponding
award of moral and exemplary damages.11
Petitioners filed a motion for reconsideration but the NLRC
denied the same in its November 13, 2008 Decision.
Dissatisfied with the adverse ruling, petitioners instituted a
petition for certiorari under Rule 65 of the Rules of Court
before the CA arguing grave abuse of discretion on the
part of the NLRC in reversing the LA decision.
In its Decision, dated November 12, 2009, the
CA sustained the NLRC ruling. The fallo of which reads:
WHEREFORE, premises considered, the petition for
certiorari is DENIED. The NLRC Decisions dated July 24,
2007 and November 13, 2008 in NLRC NCR CA NO.
048258 (NLRC RAB III–09–7882–04, NLRC RAB III–09–
7980–04) are AFFIRMED.
SO ORDERED.
The CA held that errors of judgment are not within the
province of a special civil action for certiorari. It declared
that factual findings of quasi–judicial agencies that had
acquired expertise in matters entrusted to their jurisdiction
were accorded not only respect but finality if they were
supported by substantial evidence. The CA noted that the
NLRC considered the evidence and applied the law in this
155
case, thus, no grave abuse of discretion could be imputed
on the part of the NLRC in reversing the LA ruling.
Petitioners moved for reconsideration but the same was
denied by the CA in its March 24, 2010 Resolution.
Not in conformity with the ruling of the CA, petitioners seek
relief with this Court raising the following
ISSUES
I. WHETHER OR NOT PETITIONERS T & H
SHOPFITTERS CORPORATION AND GIN QUEEN
CORPORATION ARE ONE AND THE SAME
CORPORATION.
II. WHETHER OR NOT PETITIONER GIN QUEEN
CORPORATION IS LIABLE TO THE RESPONDENTS
FOR UNFAIR LABOR PRACTICE.
III. WHETHER OR NOT THE AWARD OF MORAL AND
EXEMPLARY DAMAGES IN FAVOR OF THE
RESPONDENTS IS PROPER.
IV. WHETHER OR NOT THE AWARD OF TEN PERCENT
(10%) ATTORNEY’S FEES IN FAVOR OF THE
RESPONDENT IS PROPER.12
Simply put, the issue for the Court’s resolution is whether
ULP acts were committed by petitioners against
respondents in the case at bench.
In support of their position, petitioners stress that T&H
Shopfitters and Gin Queen are corporations separate and
distinct from each other. Consequently, T&H Shopfitters
and Stinnes Huang, an officer of T&H Shopfitters, cannot
be held liable for ULP for the reason that there is no
employer–employee relationship between the former and
respondents. Further, Gin Queen avers that its decision to
implement an enforced rotation of work assignments for
respondents was a management prerogative permitted by
law, justified by the decrease in the orders it received from
its customers. It explains that its failure to present concrete
proof of its decreasing orders was due to the impossibility
of proving a negative assertion. It also asserts that the
transfer from Castillejos to Cabangan was made in good
faith and solely because of the expiration of its lease
contract in Castillejos.
The Court’s Ruling
As to the issue of ULP, petitioners’ argument is utterly
without merit.
In the case at bench, petitioners are being accused of
violations of paragraphs (a), (c), and (e) of Article 257
(formerly Article 248) of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.––It shall
be unlawful for an employer to commit any of the following
unfair labor practices:
(a) To interfere with, restrain or coerce employees in the
exercise of their right to self–organization;
156
xxxx
(c) To contract out services or functions being performed
by union members when such will interfere with, restrain,
or coerce employees in the exercise of their right to self–
organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and
other terms and conditions of employment in order to
encourage or discourage membership in any labor
organization. x x x
The concept of ULP is embodied in Article 256 (formerly
Article 247) of the Labor Code,14 which provides:
Article 256. Concept of unfair labor practice and procedure
for prosecution thereof.––Unfair labor practices violate the
constitutional right of workers and employees to self–
organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain
collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and
stable labor–management relations.
xxxx
In essence, ULP relates to the commission of acts that
transgress the workers’ right to organize. As specified in
Articles 248 [now Article 257] and 249 [now Article 258] of
the Labor Code, the prohibited acts must necessarily
relate to the workers’ right to self–organization x x x.15
In the case of Insular Life Assurance Co., Ltd. Employees
Association – NATU v. Insular Life Assurance Co.
Ltd.,16 this Court had occasion to lay down the test of
whether an employer has interfered with and coerced
employees in the exercise of their right to self–
organization, that is, whether the employer has engaged
in conduct which, it may reasonably be said, tends to
interfere with the free exercise of employees’ rights; and
that it is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by
statements of threats of the employer if there is
a reasonable inference that anti–union conduct of the
employer does have an adverse effect on self–
organization and collective bargaining.
The questioned acts of petitioners, namely: 1) sponsoring
a field trip to Zambales for its employees, to the exclusion
of union members, before the scheduled certification
election; 2) the active campaign by the sales officer of
petitioners against the union prevailing as a bargaining
agent during the field trip; 3) escorting its employees after
the field trip to the polling center; 4) the continuous hiring
of subcontractors performing respondents’ functions; 5)
assigning union members to the Cabangan site to work as
grass cutters; and 6) the enforcement of work on a
rotational basis for union members, all reek of interference
on the part of petitioners.
Indubitably, the various acts of petitioners, taken together,
reasonably support an inference that, indeed, such were
157
all orchestrated to restrict respondents’ free exercise of
their right to self–organization. The Court is of the
considered view that petitioners’ undisputed actions prior
and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in
the affairs of its employees in selecting their exclusive
bargaining representative. In Holy Child Catholic School v.
Hon. Patricia Sto. Tomas,17 the Court ruled that a
certification election was the sole concern of the workers,
save when the employer itself had to file the petition x x x,
but even after such filing, its role in the certification process
ceased and became merely a bystander. Thus, petitioners
had no business persuading and/or assisting its
employees in their legally protected independent process
of selecting their exclusive bargaining representative. The
fact and peculiar timing of the field trip sponsored by
petitioners for its employees not affiliated with THS–GQ
Union, although a positive enticement, was undoubtedly
extraneous influence designed to impede respondents in
their quest to be certified. This cannot be countenanced.
Not content with achieving a “no union” vote in the
certification election, petitioners launched a vindictive
campaign against union members by assigning work on a
rotational basis while subcontractors performed the latter’s
functions regularly. Worse, some of the respondents were
made to work as grass cutters in an effort to dissuade them
from further collective action. Again, this cannot be
countenanced.
More importantly, petitioners’ bare denial of some of the
complained acts and unacceptable explanations, a mere
afterthought at best, cannot prevail over respondents’
detailed narration of the events that transpired. At this
juncture, it bears to emphasize that in labor cases, the For reference:
quantum of proof necessary is substantial evidence,18 or • (Voluntary Recognition)
that amount of relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if
other minds, equally reasonable, might conceivably opine STA. LUCIA EAST COMMERCIAL
otherwise.19 CORPORATION, Petitioner, v. HON. SECRETARY OF
LABOR AND EMPLOYMENT and STA. LUCIA EAST
In fine, mindful of the nature of the charge of ULP, COMMERCIAL CORPORATION WORKERS
including its civil and/or criminal consequences, the Court ASSOCIATION (CLUP LOCAL
finds that the NLRC, as correctly sustained by the CA, had CHAPTER), Respondents.
sufficient factual and legal bases to support its finding of
ULP. DECISION

Anent the issue on the award of attorney’s fess, the
applicable law concerning the grant thereof in labor cases
is Article 11120 of the Labor Code. Pursuant thereto, the
award of 10% attorney’s fees is limited to cases of unlawful
withholding of wages. In this case, however, the Court
cannot find any claim or proof that petitioners unlawfully
withheld the wages of respondents. Consequently, the
grant of 10% attorney’s fees in favor of respondents is not
justified under the circumstances. Accordingly, the Court
deems it proper to delete the same.
WHEREFORE, the November 12, 2009 Decision of the
Court of Appeals and its March 24, 2010 Resolution, in
CA–G.R. SP No. 107188, are AFFIRMED, except with
respect to the award of attorney’s fees which is
hereby DELETED.
SO ORDERED.
CARPIO, J.:
The Case
This is a Petition for Review 1 assailing the
Decision2 promulgated on 14 August 2003 as well as the
Resolution3 promulgated on 24 February 2004 of the
Court of Appeals (appellate court) in CA-G.R. SP No.
77015. The appellate court denied Sta. Lucia East
Commercial Corporation's (SLECC) petition
for certiorari with prayer for writ of preliminary injunction
and temporary restraining order. The appellate court
further ruled that the Secretary of Labor and Employment
(Secretary) was correct when she held that the
subsequent negotiations and registration of a collective
bargaining agreement (CBA) executed by SLECC with
Samahang Manggagawa sa Sta. Lucia East Commercial
(SMSLEC) could not bar Sta. Lucia East Commercial

158
Corporation Workers Association's (SLECCWA) petition
for direct certification.
The Facts
The Secretary narrated the facts as follows:
On 27 February 2001, Confederated Labor Union of the
Philippines (CLUP), in behalf of its chartered local,
instituted a petition for certification election among the
regular rank-and-file employees of Sta. Lucia East
Commercial Corporation and its Affiliates, docketed as
Case No. RO400-0202-RU-007. The affiliate companies
included in the petition were SLE Commercial, SLE
Department Store, SLE Cinema, Robsan East Trading,
Bowling Center, Planet Toys, Home Gallery and
Essentials.
On 21 August 2001, Med-Arbiter Bactin ordered the
dismissal of the petition due to inappropriateness of the
bargaining unit. CLUP-Sta. Lucia East Commercial
Corporation and its Affiliates Workers Union appealed the
order of dismissal to this Office on 14 September 2001. On
20 November 2001, CLUP-Sta. Lucia East Commercial
Corporation and its Affiliates Workers Union [CLUP-
SLECC and its Affiliates Workers Union] moved for the
withdrawal of the appeal. On 31 January 2002, this Office
granted the motion and affirmed the dismissal of the
petition.
In the meantime, on 10 October 2001, [CLUP-SLECC and
its Affiliates Workers Union] reorganized itself and re-
registered as CLUP-Sta. Lucia East Commercial
159
Corporation Workers Association (herein appellant CLUP-
SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It
was issued Certificate of Creation of a Local Chapter No.
RO400-0110-CC-004.
On the same date, [CLUP-SLECCWA] filed the instant
petition. It alleged that [SLECC] employs about 115
employees and that more than 20% of employees
belonging to the rank-and-file category are its members.
[CLUP-SLECCWA] claimed that no certification election
has been held among them within the last 12 months prior
to the filing of the petition, and while there is another union
registered with DOLE-Regional Office No. IV on 22 June
2001 covering the same employees, namely [SMSLEC], it
has not been recognized as the exclusive bargaining
agent of [SLECC's] employees.
On 22 November 2001, SLECC filed a motion to dismiss
the petition. It averred that it has voluntarily recognized
[SMSLEC] on 20 July 2001 as the exclusive bargaining
agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced
between them. SLECC argued that the petition should be
dismissed for violating the one year and negotiation bar
rules under pars. (c) and (d), Section 11, Rule XI, Book V
of the Omnibus Rules Implementing the Labor Code.
On 29 November 2001, a CBA between [SMSLEC] and
[SLECC] was ratified by its rank-and-file employees and
registered with DOLE-Regional Office No. IV on 9 January
2002.
In the meantime, on 19 December 2001, [CLUP-
SLECCWA] filed its Opposition and Comment to
[SLECC'S] Motion to Dismiss. It assailed the validity of the
voluntary recognition of [SMSLEC] by [SLECC] and their
consequent negotiations and execution of a CBA.
According to [CLUP-SLECCWA], the same were tainted
with malice, collusion and conspiracy involving some
officials of the Regional Office. Appellant contended that
Chief LEO Raymundo Agravante, DOLE Regional Office
No. IV, Labor Relations Division should have not approved
and recorded the voluntary recognition of [SMSLEC] by
[SLECC] because it violated one of the major
requirements for voluntary recognition, i.e., non-existence
of another labor organization in the same bargaining unit.
It pointed out that the time of the voluntary recognition on
20 July 2001, appellant's registration as [CLUP-SLECC
and its Affiliates Workers Union], which covers the same
group of employees covered by Samahang Manggagawa
sa Sta. Lucia East Commercial, was existing and has
neither been cancelled or abandoned. [CLUP-SLECCWA]
also accused Med-Arbiter Bactin of malice, collusion and
conspiracy with appellee company when he dismissed the
petition for certification election filed by [SMSLEC] for
being moot and academic because of its voluntary
recognition, when he was fully aware of the pendency of
[CLUP-SLECCWA's] earlier petition for certification
election.
Subsequent pleadings filed by [CLUP-SLECCWA] and
[SLECC] reiterated their respective positions on the
validity and invalidity of the voluntary recognition. On 29
July 2002, Med-Arbiter Bactin issued the assailed Order.4
160
The Med-Arbiter's Ruling
In his Order dated 29 July 2002, Med-Arbiter Anastacio L.
Bactin dismissed CLUP-SLECCWA's petition for direct
certification on the ground of contract bar rule. The prior
voluntary recognition of SMSLEC and the CBA between
SLECC and SMSLEC bars the filing of CLUP-SLECCWA's
petition for direct certification. SMSLEC is entitled to enjoy
the rights, privileges, and obligations of an exclusive
bargaining representative from the time of the recording of
the voluntary recognition. Moreover, the duly registered
CBA bars the filing of the petition for direct certification.
CLUP-SLECCWA filed a Memorandum of Appeal of the
Med-Arbiter's Order before the Secretary.
The Ruling of the Secretary of Labor and Employment
In her Decision promulgated on 27 December 2002, the
Secretary found merit in CLUP-SLECCWA's appeal. The
Secretary held that the subsequent negotiations and
registration of a CBA executed by SLECC with SMSLEC
could not bar CLUP-SLECCWA's petition. CLUP-SLECC
and its Affiliates Workers Union constituted a registered
labor organization at the time of SLECC's voluntary
recognition of SMSLEC. The dispositive portion of the
Secretary's Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the
Order of the Med-Arbiter dated 29 July 2002 is
REVERSED and SET ASIDE. Accordingly, let the entire
records of the case be remanded to the Regional Office of
origin for the immediate conduct of a certification election,
subject to the usual pre-election conference, among the
regular rank-and-file employees of [SLECC], with the
following choices:
1. Sta. Lucia East Commercial Corporation Workers'
Association - CLUP Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East
Commercial; andcralawlibrary
3. No Union.
Pursuant to Rule XI, Section II.1 of Department Order No.
9, appellee corporation is hereby directed to submit to the
office of origin, within ten (10) days from receipt hereof, the
certified list of its employees in the bargaining unit or when
necessary a copy of its payroll covering the same
employees for the last three (3) months preceding the
issuance of this Decision.
Let a copy of this Decision be furnished the Bureau of
Labor Relations and Labor Relations Division of Regional
Office No. IV for the cancellation of the recording of
voluntary recognition in favor of Samahang Manggagawa
sa Sta. Lucia East Commercial and the appropriate
annotation of re-registration of CLUP-Sta. Lucia East
Commercial Corporation and its Affiliates Workers Union
to Sta. Lucia East Commercial Corporation Workers
Association-CLUP Local Chapter.
SO DECIDED.5
161
SLECC filed a motion for reconsideration which the
Secretary denied for lack of merit in a Resolution dated 27
March 2003. SLECC then filed a petition
for certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary
and quoted extensively from the Secretary's decision. The
appellate court agreed with the Secretary's finding that the
workers sought to be represented by CLUP-SLECC and
its Affiliates Workers Union included the same workers in
the bargaining unit represented by SMSLEC. SMSLEC
was not the only legitimate labor organization operating in
the subject bargaining unit at the time of SMSLEC's
voluntary recognition on 20 July 2001. Thus, SMSLEC's
voluntary recognition was void and could not bar CLUP-
SLECCWA's petition for certification election.
The Issue
SLECC raised only one issue in its petition. SLECC
asserted that the appellate court commited a reversible
error when it affirmed the Secretary's finding that SLECC's
voluntary recognition of SMSLEC was done while a
legitimate labor organization was in existence in the
bargaining unit.
The Ruling of the Court
The petition has no merit. We see no reason to overturn
the rulings of the Secretary and of the appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor
organization 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." Upon compliance with all
the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the
roster of legitimate labor organizations.6 Any applicant
labor organization 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.7
Bargaining Unit
The concepts of a union and of a legitimate labor
organization are different from, but related to, the concept
of a bargaining unit. We explained the concept of a
bargaining unit in San Miguel Corporation v.
Laguesma,8 where we stated that:
A bargaining unit is a "group of employees of a given
employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer,
indicated to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining
provisions of the law."
The fundamental factors in determining the appropriate
collective bargaining unit are: (1) the will of the employees
162
(Globe Doctrine); (2) affinity and unity of the employees'
interest, such as substantial similarity of work and duties,
or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status.
Contrary to petitioner's assertion, this Court has
categorically ruled that the existence of a prior collective
bargaining history is neither decisive nor conclusive in the
determination of what constitutes an appropriate
bargaining unit.
However, employees in two corporations cannot be
treated as a single bargaining unit even if the businesses
of the two corporations are related.9
A Legitimate Labor Organization Representing
An Inappropriate Bargaining Unit
CLUP-SLECC and its Affiliates Workers Union's initial
problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining
unit. However, CLUP-SLECC and its Affiliates Workers
Union subsequently re-registered as CLUP-SLECCWA,
limiting its members to the rank-and-file of SLECC.
SLECC cannot ignore that CLUP-SLECC and its Affiliates
Workers Union was a legitimate labor organization at the
time of SLECC's voluntary recognition of SMSLEC.
SLECC and SMSLEC cannot, by themselves, decide
whether CLUP-SLECC and its Affiliates Workers Union
represented an appropriate bargaining
unit.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The inclusion in the union of disqualified employees is not
among the grounds for cancellation of registration, unless
such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections
(a) to (c) of Article 239 of the Labor Code.10 Thus, CLUP-
SLECC and its Affiliates Workers Union, having been
validly issued a certificate of registration, should be
considered as having acquired juridical personality which
may not be attacked collaterally. The proper procedure for
SLECC is to file a petition for cancellation of certificate of
registration11 of CLUP-SLECC and its Affiliates Workers
Union and not to immediately commence voluntary
recognition proceedings with SMSLEC.
SLECC's Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the
representation status of a union in unorganized
establishments.12 SLECC was not an unorganized
establishment when it voluntarily recognized SMSLEC as
its exclusive bargaining representative on 20 July 2001.
CLUP-SLECC and its Affiliates Workers Union filed a
petition for certification election on 27 February 2001 and
this petition remained pending as of 20 July 2001. Thus,
SLECC's voluntary recognition of SMSLEC on 20 July
2001, the subsequent negotiations and resulting
registration of a CBA executed by SLECC and SMSLEC
are void and cannot bar CLUP-SLECCWA's present
petition for certification election.
Employer's Participation in a Petition for Certification
Election
163
We find it strange that the employer itself, SLECC, filed a
motion to oppose CLUP-SLECCWA's petition for
certification election. In petitions for certification election,
the employer is a mere bystander and cannot oppose the
petition or appeal the Med-Arbiter's decision. The
exception to this rule, which happens when the employer
is requested to bargain collectively, is not present in the
case before us.13
WHEREFORE, we DENY the petition. We AFFIRM the
Decision promulgated on 14 August 2003 as well as the
Resolution promulgated on 24 February 2004 of the Court
of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.
COASTAL SUBIC BAY TERMINAL, INC., Petitioner,
vs.
DEPARTMENT OF LABOR and EMPLOYMENT –
OFFICE OF THE SECRETARY, COASTAL SUBIC BAY
TERMINAL, INC. SUPERVISORY UNION-APSOTEU,
and COASTAL SUBIC BAY TERMINAL, INC. RANK-
AND-FILE UNION-ALU-TUCP, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals’
Decision1 dated August 31, 2001, in CA-G.R. SP No.
54128 and the Resolution2 dated February 5, 2003,
denying petitioner’s motion for reconsideration. The Court
of Appeals had affirmed the Decision3 dated March 15,
1999 of the Secretary of the Department of Labor and
Employment (DOLE) reversing the Mediator Arbiter’s
dismissal of private respondents’ petitions for certification
election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay
Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and
Coastal Subic Bay Terminal, Inc. Supervisory Union
(CSBTI-SU) filed separate petitions for certification
election before Med-Arbiter Eladio de Jesus of the
Regional Office No. III. The rank-and-file union insists that
it is a legitimate labor organization having been issued a
charter certificate by the Associated Labor Union (ALU),
and the supervisory union by the Associated Professional,
Supervisory, Office and Technical Employees Union
(APSOTEU). Private respondents also alleged that the
establishment in which they sought to operate was
unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI)
opposed both petitions for certification election alleging
that the rank-and-file union and supervisory union were
not legitimate labor organizations, and that the proposed
bargaining units were not particularly described.
Without ruling on the legitimacy of the respondent unions,
the Med-Arbiter dismissed, without prejudice to refiling,
both petitions which had been consolidated. The Med-
Arbiter held that the ALU and APSOTEU are one and the
164
same federation having a common set of officers. Thus,
the supervisory and the rank-and-file unions were in effect
affiliated with only one federation.4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the
simultaneous filing of the instant petitions to be invalid and
unwarranted. Consequently, this Office has no recourse
but to dismiss both petitions without prejudice to the
refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant
petitions be, as they are hereby DISMISSED.
SO ORDERED.5
Both parties appealed to the Secretary of Labor and
Employment, who reversed the decision of the Med-
Arbiter. The Secretary thru Undersecretary R. Baldoz,
ruled that CSBTI-SU and CSBTI-RFU have separate legal
personalities to file their separate petitions for certification
election. The Secretary held that APSOTEU is a legitimate
labor organization because it was properly registered
pursuant to the 1989 Revised Rules and Regulations
implementing Republic Act No. 6715, the rule applicable
at the time of its registration. It further ruled that ALU and
APSOTEU are separate and distinct labor unions having
separate certificates of registration from the DOLE. They
also have different sets of locals. The Secretary declared
CSBTI-RFU and CSBTI-SU as legitimate labor
organizations having been chartered respectively by ALU
and APSOTEU after submitting all the requirements with
the Bureau of Labor Relations (BLR). Accordingly, the
Secretary ordered the holding of separate certification
election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional
Office No. III is hereby REVERSED. Let separate
certification elections be conducted immediately among
the appropriate employees of CSBTI, after the usual pre-
election conference, with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC.
RANK-AND-FILE UNION-ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC.
SUPERVISORY EMPLOYEES UNION-
APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for
the last three months immediately preceding the issuance
of this decision, shall be the basis for determining the
qualified list of voters.
SO DECIDED.6
The motion for reconsideration was also denied.7
165
On appeal, the Court of Appeals affirmed the decision of
the Secretary.8 It held that there was no grave abuse of
discretion on the part of the Secretary; its findings are
supported by evidence on record; and thus should be
accorded with respect and finality.9
The motion for reconsideration was likewise
denied.10 Hence, the instant petition by the company
anchored on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED
IN RELYING ON THE "1989 REVISED RULES
AND REGULATIONS IMPLEMENTING RA 6715"
AS BASIS TO RECOGNIZE PRIVATE
RESPONDENT APSOTEU’S REGISTRATION BY
THE DOLE REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED
WHEN IT AFFIRMED PUBLIC RESPONDENT’S
APPLICATION OF THE PRINCIPLE OF STARE
DECISIS TO HASTILY DISPOSE OF THE LEGAL
PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID
NOT DECIDE IN ACCORD WITH LAW AND
JURISPRUDENCE WHEN IT AFFIRMED PUBLIC
 RESPONDENT’S APPLICATION OF THE "UNION Labor Unions v. Secretary of Labor;12 that the certificates
AUTONOMY" THEORY. of registration issued by the DOLE Regional Director
pursuant to the rules are questionable, and possibly even
IV void ab initio for being ultra vires; and that the Court of
Appeals erred when it ruled that the law applicable at the
IN AFFIRMING PUBLIC RESPONDENT’S time of APSOTEU’s registration was the 1989 Revised
FINDING THAT PRIVATE RESPONDENTS ARE Implementing Rules and Regulations of Rep. Act No.
"SEPARATE FEDERATIONS," THE HONORABLE 6715.
COURT OF APPEALS:
Petitioner insists that APSOTEU lacks legal personality,
(1) IGNORED JURISPRUDENCE and its chartered affiliate CSBTI-SU cannot attain the
RECOGNIZING THE BINDING NATURE status of a legitimate labor organization to file a petition for
OF A MED-ARBITER’S FACTUAL certification election. It relies on Villar v. Inciong,13 where
FINDINGS; AND we held therein that Amigo Employees Union was not a
duly registered independent union absent any record of its
(2) DISREGARDED EVIDENCE ON registration with the Bureau.
RECORD OF "ILLEGAL COMMINGLING."11
Pertinent is Article 23514 of the Labor Code which provides
Plainly, the issues are (1) Can the supervisory and the that applications for registration shall be acted upon by the
rank-and-file unions file separate petitions for certification Bureau. "Bureau" as defined under the Labor Code means
election?; (2) Was the Secretary’s decision based on stare the BLR and/or the Labor Relations Division in the
decisis correct?; and (3) Were private respondents Regional Offices of the Department of Labor.15 Further,
engaged in commingling? Section 2, Rule II, Book V of the 1989 Revised
Implementing Rules of the Labor Code (Implementing
The issue on the status of the supervisory union CSBTI- Rules) provides that:
SU depends on the status of APSOTEU, its mother
federation. Section 2. Where to file application; procedure – Any
national labor organization or labor federation or local
Petitioner argues that APSOTEU improperly secured its union may file an application for registration with the
registration from the DOLE Regional Director and not from Bureau or the Regional Office where the applicant’s
the BLR; that it is the BLR that is authorized to process principal offices is located. The Bureau or the Regional
applications and issue certificates of registration in Office shall immediately process and approve or deny the
accordance with our ruling in Phil. Association of Free application. In case of approval, the Bureau or the

166
Regional Office shall issue the registration certificate
within thirty (30) calendar days from receipt of the
application, together with all the requirements for
registration as hereinafter provided. 16
The Implementing Rules specifically Section 1, Rule III of
Book V, as amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. – The
application for registration of any federation, national or
industry union or trade union center shall be filed with the
Bureau. Where the application is filed with the Regional
Office, the same shall be immediately forwarded to the
Bureau within forty-eight (48) hours from filing thereof,
together with all the documents supporting the registration.
The applications for registration of an independent union
shall be filed with and acted upon by the Regional Office
where the applicant’s principal office is located ….
xxxx
The DOLE issued Department Order No. 40-03, which
took effect on March 15, 2003, further amending Book V
of the above implementing rules. The new implementing
rules explicitly provide that applications for registration of
labor organizations shall be filed either with the Regional
Office or with the BLR.17
Even after the amendments, the rules did not divest the
Regional Office and the BLR of their jurisdiction over
applications for registration by labor organizations. The
amendments to the implementing rules merely specified
167
that when the application was filed with the Regional
Office, the application would be acted upon by the BLR.
The records in this case showed that APSOTEU was
registered on March 1, 1991. Accordingly, the law
applicable at that time was Section 2, Rule II, Book V of
the Implementing Rules, and not Department Order No. 9
which took effect only on June 21, 1997. Thus, considering
further that APSOTEU’s principal office is located in
Diliman, Quezon City, and its registration was filed with the
NCR Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.18 In said case,
there was no record in the BLR that Amigo Employees
Union was registered.19
Did the Court of Appeals err in its application of stare
decisis when it upheld the Secretary’s ruling that
APSOTEU is a legitimate labor organization and its
personality cannot be assailed unless in an independent
action for cancellation of registration certificate?20
We think not.
Section 5, Rule V, Book V of the Implementing Rules
states:
Section 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 maybe
questioned only in an independent petition for cancellation
in accordance with these Rules.21
Thus, APSOTEU is a legitimate labor organization and has
authority to issue charter to its affiliates.22 It may issue a
local charter certificate to CSBTI-SU and correspondingly,
CSBTI-SU is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a
supervisory union one and the same because of the
commonalities between them? Are they commingled?
The petitioner contends that applying by analogy, the
doctrine of piercing the veil of corporate fiction, APSOTEU
and ALU are the same federation. Private respondents
disagree.
First, as earlier discoursed, once a labor union attains the
status of a legitimate labor organization, it continues as
such until its certificate of registration is cancelled or
revoked in an independent action for cancellation. 23 In
addition, the legal personality of a labor organization
cannot be collaterally attacked.24 Thus, when the
personality of the labor organization is questioned in the
same manner the veil of corporate fiction is pierced, the
action partakes the nature of a collateral attack. Hence, in
the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless
and until their registrations are cancelled, each continues
to possess a separate legal personality. The CSBTI-RFU
and CSBTI-SU are therefore affiliated with distinct and
separate federations, despite the commonalities of
APSOTEU and ALU.
168
Under the rules implementing the Labor Code, a chartered
local union acquires legal personality through the charter
certificate issued by a duly registered federation or
national union, and reported to the Regional Office in
accordance with the rules implementing the Labor
Code.25 A local union does not owe its existence to the
federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will
of its members. Mere affiliation does not divest the local
union of its own personality, neither does it give the mother
federation the license to act independently of the local
union. It only gives rise to a contract of agency, where the
former acts in representation of the latter.26 Hence, local
unions are considered principals while the federation is
deemed to be merely their agent.27 As such principals, the
unions are entitled to exercise the rights and privileges of
a legitimate labor organization, including the right to seek
certification as the sole and exclusive bargaining agent in
the appropriate employer unit.1âwphi1
A word of caution though, under Article 245 of the Labor
Code,28 supervisory employees are not eligible for
membership in a labor union of rank-and-file employees.
The supervisory employees are allowed to form their own
union but they are not allowed to join the rank-and-file
union because of potential conflicts of interest.29 Further,
to avoid a situation where supervisors would merge with
the rank-and-file or where the supervisors’ labor union
would represent conflicting interests, a local supervisors’
union should not be allowed to affiliate with the national
federation of unions of rank-and-file employees where that
federation actively participates in the union activity within
the company.30 Thus, the limitation is not confined to a
case of supervisors wanting to join a rank-and-file union.
The prohibition extends to a supervisors’ local union
applying for membership in a national federation the
members of which include local unions of rank-and-file
employees.31 In De La Salle University Medical Center
and College of Medicine v. Laguesma, we reiterated the
rule that for the prohibition to apply, it is not enough that
the supervisory union and the rank-and-file union are
affiliated with a single federation. In addition, the
supervisors must have direct authority over the rank-and-
file employees.32
freedom of employees to organize themselves for the
purpose of leveling the bargaining process but also to
ensure the freedom of workingmen and to keep open the
corridor of opportunity to enable them to do it for
themselves.
WHEREFORE, the petition is GRANTED. The Court of
Appeals’ Decision dated August 31, 2001, in CA-G.R. SP
No. 54128 and the Resolution dated February 5, 2003
are SET ASIDE. The decision of the Med-Arbiter is
hereby AFFIRMED.

In the instant case, the national federations that exist as SO ORDERED.

separate entities to which the rank-and-file and
supervisory unions are separately affiliated with, do have
a common set of officers. In addition, APSOTEU, the
supervisory federation, actively participates in the CSBTI-
SU while ALU, the rank-and-file federation, actively
participates in the CSBTI-RFU, giving occasion to possible
conflicts of interest among the common officers of the
federation of rank-and-file and the federation of
supervisory unions. For as long as they are affiliated with
the APSOTEU and ALU, the supervisory and rank-and-file
unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not
separately petition for certification elections.1âwphi1

The purpose of affiliation of the local unions into a common

enterprise is to increase the collective bargaining power in
respect of the terms and conditions of labor.33 When there
is commingling of officers of a rank-and-file union with a
supervisory union, the constitutional policy on labor is
circumvented. Labor organizations should ensure the

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