G.R. No.

L-67485 April 10, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES

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

MEDIALDEA, J.:

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

The antecedent facts are as follows:

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

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

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

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

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

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

1
On May 2, 1983, Honorable Med-Arbiter Demetrio Correa issued an order in LRD Case No. 4293 giving due
course to the petition of private respondent FUR-TUCP and ordering that an election be held within 20 days
from receipt of the order.

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

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

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

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

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

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

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

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

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

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

Hence, this petition.

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

2
Petitioner maintains that respondent Director Trajano committed grave abuse of discretion amounting to lack of
jurisdiction when it rendered a decision affirming the order of Med-Arbiter Correa finding that the deadlock is
"nothing but a mere subterfuge to obstruct the exercise of the workers of their legitimate right to self-
organization, a last minute maneuver to deny the workers the exercise of their constitutional rights" (Rollo, p.
28) and ordering a certification election among the rank and file workers of respondent company.

Furthermore, petitioner stresses that the finding that the contract (deadlock) bar rule has no room for application
in the instant case, runs counter to the provision of Section 3 of the Rules Implementing Batas Pambansa Blg.
130 which prohibits the filing of a petition for certification election during the pendency of a bargaining
deadlock.

In conformity with the petitioner's contentions, the Solicitor General insists that the respondent Director has
acted arbitrarily in issuing the assailed decision and order. In addition, it argues that the CBA concluded on
September 10, 1983 has a life span of three (3) years and constitutes a bar to the petition for certification
election pursuant to Section 3 of the Rules Implementing Batas Pambansa Blg. 130.

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

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

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

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

If a collective bargaining agreement has been duly registered in accordance with Article 231 of
the Code, a petition for certification election or a motion for intervention can only be entertained
within sixty (60) days prior to the expiry date of such agreement.

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

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

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

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

3
The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained if there
is no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the
management.

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

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

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

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

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

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

SO ORDERED.

G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE

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

HERMOSISIMA, JR., J.:

4
This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994
of public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in
Case No. OS.-A-136-94 1 which dismissed the petition for certification election filed by petitioner for lack of
merit and further directed private respondent hospital to negotiate a collective bargaining agreement with
respondent union, Capitol Medical Center Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

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

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

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

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of
Labor which appeal was denied on February 26, 1993. 6 A subsequent motion for reconsideration filed by
respondent CMC was likewise denied on March 23, 1993. 7

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

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

5
Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1,
1993. After complying with the other legal requirements, respondent union staged a strike on April 15, 1993.
On April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and issued an order certifying the
same to the National Labor Relations Commission for compulsory arbitration where the said case is still
pending. 12

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

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

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

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

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

Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for
certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules
Implementing the Labor Code. 15 It also prayed that the said provision must not be applied strictly in view of the
facts in this case.

6
Petitioner union did not file any opposition to the appeal.

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

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

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

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

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

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

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

We do not subscribe to petitioner's contention.

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

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

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

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent
union's appeal.
7
It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

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

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

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

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

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

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

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

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

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor
"reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals
of respondent union were never answered by CMC. In fact, what happened in this case is worse than a
bargaining deadlock for CMC employed all legal means to block the certification of respondent union as the
bargaining agent of the rank-and-file; and use it as its leverage for its failure to bargain with respondent union.
Thus, we can only conclude that CMC was unwilling to negotiate and reach an agreement with respondent
union. CMC has not at any instance shown willingness to discuss the economic proposals given by respondent
union. 22
8
As correctly ratiocinated by public respondent, to wit:

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

"Article 252. Meaning of duty to bargain collectively — the duty to bargain

collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other terms and conditions
of employment including proposals for adjusting any grievance or questions
arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party
to agree to a proposal or to make any concession."

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

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

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

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

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

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there
was proof that the certified bargaining agent, respondent union, had taken an action to legally coerce the
employer to comply with its statutory duty to bargain collectively, i.e., charging the employer with unfair labor
9
practice and conducting a strike in protest against the employer's refusal to bargain. 25 It is only just and
equitable that the circumstances in this case should be considered as similar in nature to a "bargaining deadlock"
when no certification election could be held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating
a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be interpreted liberally so as to include
a circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its
duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

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

SO ORDERED

G.R. No. 89609 January 27, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES

(NACUSIP)-TUCP, petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the
NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.

Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner.

Manlapao, Drilon, Ymballa and Chavez for private respondent.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the resolution issued by the respondent Director of
the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the order of the Med-
Arbiter dated February 8, 1989 denying the motion to dismiss the petition and directing the conduct of a
certification election among the rank and file employees or workers of the Dacongcogon Sugar and Rice
Milling Co. situated at Kabankalan, Negros Occidental.

The antecedent facts giving rise to the controversy at bar are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is a
legitimate national labor organization duly registered with the Department of Labor and Employment.
Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as the Director of the Bureau of
Labor Relations of the Department of Labor and Employment, while private respondent National Federation of
Sugar Workers (NFSW-FGT-KMU) is a labor organization duly registered with the Department of Labor and
Employment.

Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros Occidental
employs about five hundred (500) workers during milling season and about three hundred (300) on off-milling
season.

10
On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered into a
collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on November 14,
1987.

When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its renewal.
The CBA was extended for another three (3) years with reservation to negotiate for its amendment, particularly
on wage increases, hours of work, and other terms and conditions of employment.

However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement. In order to
obviate friction and tension, the parties agreed on a suspension to provide a cooling-off period to give them time
to evaluate and further study their positions. Hence, a Labor Management Council was set up and convened,
with a representative of the Department of Labor and Employment, acting as chairman, to resolve the issues.

On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or certification
election among the rank and file workers of Dacongcogon.

On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the following
grounds, to wit:

The Petition was filed out of time;

II

There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-
central. (Rollo, p. 25)

On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.

By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private respondent
NFSW-FGT-KMU and directed the conduct of certification election among the rank and file workers of
Dacongcogon, the dispositive portion of which provides as follows:

WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is
hereby DENIED. Let therefore a certification election among the rank and file
employees/workers of the Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan,
Neg. Occ., be conducted with the following choices:

(1) National Congress of Unions in the Sugar Industry of the Philippines

(NACUSIP-TUCP);

(2) National Federation of Sugar Workers (NFSW);

(3) No Union.

The designated Representation Officer is hereby directed to call the parties for a pre-election
conference to thresh out the mechanics of the election and to conduct and supervise the same
within twenty (20) days from receipt by the parties of this Order. The latest payroll shall be used
to determine the list of qualified voters.
11
 SO ORDERED. (Rollo, p. 34)

On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging that the
Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross incompetence.
Hence, private respondent prayed that the order of the Med-Arbiter be set aside and the motion to dismiss be
reconsidered.

On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the motion
for reconsideration and/or appeal be denied for lack of merit.

On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution reversing the
order of the Med-Arbiter, to wit:

WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is
hereby set aside and vacated, and a new one issued dismissing the above-entitled petition for
being filed out of time.

SO ORDERED. (Rollo, p. 46)

Hence, this petition raising four (4) issues, to wit:

I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF

THE BUREAU OF LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION
IN RENDERING HER RESOLUTION DATED 26 JUNE 1989 REVERSING THE ORDER
DATED FEBRUARY 8, 1989 OF MED-ARBITER FELIZARDO SERAPIO.

II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT

PURA FERRER-CALLEJA IS CONTRARY TO LAW AND JURISPRUDENCE.

III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT

DIRECTOR PURA FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF
THE DACONGCOGON SUGAR & RICE MILLING COMPANY, AND THE HEREIN
PETITIONER NACUSIP-TUCP, THEIR LEGAL AND CONSTITUTIONAL RIGHTS.

IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER

SAID RESOLUTION DATED 26 JUNE 1989 WAS BIASED AGAINST PETITIONER
NACUSIP-TUCP. (Rollo,
p. 2)

The controversy boils down to the sole issue of whether or not a petition for certification election may be filed
after the 60-day freedom period.

Petitioner maintains that respondent Director Calleja committed grave abuse of discretion amounting to excess
of jurisdiction in rendering the resolution dated June 26, 1989 setting aside, vacating and reversing the order
dated February 8, 1989 of Med-Arbiter Serapio, in the following manner:

1) by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter
Felizardo Serapio and in effect dismissing the Petition for Direct or Certification Election of
Petitioner NACUSIP-TUCP (Annex "A" hereof) without strong valid, legal and factual basis;

12
 2) by giving a very strict and limited interpretation of the provisions of Section 6, Rule V, Book
V of the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as she
does, that the Labor Code, being a social legislation, should be liberally interpreted to afford the
workers the opportunity to exercise their legitimate legal and constitutional rights to self-
organization and to free collective bargaining;

3) by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the
effectivity of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over
decisions of Med-Arbiters in cases of representation issues or certification elections;

4) by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case
of Kapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;

5) by clearly failing to appreciate the significance (sic) of the fact that for more than four (4)
years there has been no certification election involving the rank and file workers of the
Company; and,

6) by frustrating the legitimate desire and will of the workers of the Company to determine their
sole and exclusive collective bargaining representative through secret balloting. (Rollo, pp. 9-10)

However, the public respondent through the Solicitor General stresses that the petition for certification election
was filed out of time. The records of the CBA at the Collective Agreements Division (CAD) of the Bureau of
Labor Relations show that the CBA between Dacongcogon and private respondent NFSW-FGT-KMU had
expired on November 14, 1987, hence, the petition for certification election was filed too late, that is, a period
of more than one (1) year after the CBA expired.

The public respondent maintains that Section 6 of the Rules Implementing Executive Order No. 111 commands
that the petition for certification election must be filed within the last sixty (60) days of the CBA and further
reiterates and warns that any petition filed outside the 60-day freedom period "shall be dismissed outright."
Moreover, Section 3, Rule V, Book V of the Rules Implementing the Labor Code enjoins the filing of a
representation question, if before a petition for certification election is filed, a bargaining deadlock to which the
bargaining agent is a party is submitted for conciliation or arbitration.

Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain the motion for
reconsideration interposed by respondent union from the order of the Med-Arbiter directing a certification
election. Public respondent contends that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there
is as yet no rule or regulation established by the Secretary for the conduct of elections among the rank and file
of employer Dacongcogon; (s)econdly, even the mechanics of the election which had to be first laid out, as
directed in the Order dated February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom
interposed by respondent union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent
Director after it filed its opposition to respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)

We find the petition devoid of merit.

A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the
rules implementing Executive Order No. 111 provides that:

Sec. 6. Procedure — . . .

13
 In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-
Arbiter shall immediately order the conduct of a certification election if the petition is filed
during the last sixty (60) days of the collective bargaining agreement. Any petition filed before
or after the sixty-day freedom period shall be dismissed outright.

The sixty-day freedom period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining agreement for
purposes of certification election.

xxx xxx xxx

The clear mandate of the aforequoted section is that the petition for certification election filed by the petitioner
NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day freedom period or a period
of more than one (1) year after the CBA expired.

It is a rule in this jurisdiction that only a certified collective bargaining agreement — i.e., an agreement duly
certified by the BLR may serve as a bar to certification elections. (Philippine Association of Free Labor Unions
(PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau
of Labor Relations duly certified the November 14, 1984 collective bargaining agreement. Hence, the contract-
bar rule as embodied in Section 3, Rule V, Book V of the rules implementing the Labor Code is applicable.

This rule simply provides that a petition for certification election or a motion for intervention can only be
entertained within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise
put, the rule prohibits the filing of a petition for certification election during the existence of a collective
bargaining agreement except within the freedom period, as it is called, when the said agreement is about to
expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the management by
preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good
faith and for the stipulated original period. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No.
77539, April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v. Trajano, G.R. No. L-75321,
20 June 1988, 162 SCRA 318, 322-323)

Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent NFSW-FGT-
KMU and Dacongcogon had not concluded a new CBA, We need only to stress what was held in the case
of Lopez Sugar Corporation v. Federation of Free Workers, Philippine Labor Union Association (G.R. No.
75700-01, 30 August 1990, 189 SCRA 179, 191) quoting Article 253 of the Labor Code that "(i)t 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." Despite
the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect
until a new CBA shall have been validly executed. Hence, the contract bar rule still applies.

Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was extended for another
three (3) years and that the deadlock was submitted to the Labor Management Council.

All premises considered, the Court is convinced that the respondent Director of the Bureau of Labor Relations
did not commit grave abuse of discretion in reversing the order of the Med-Arbiter.

ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau of Labor
Relations is hereby AFFIRMED.

14
SO ORDERED.

G.R. No. L-45513-14 January 6, 1978

IN THE MATTER OF PETITION FOR DIRECT CERTIFICATION OR CERTIFICATION

ELECTION. FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES' UNION (FEU), petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor Relations,
FIRESTONE TIRE & RUBBER COMPANY OF THE PHILIPPINES and ASSOCIATED LABOR
UNIONS (ALU), respondents.

FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES UNION, represented by Romulo Ramos as
President, petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor Relations, and
ASSOCIATED LABOR UNIONS (ALU), respondents.

Avelino D. Latosa for petitioner.

Venerando B. Briones for private respondent.

ANTONIO, J.:

Petition to set aside two Resolutions issued by respondent Acting Director Francisco L. Estrella of the Bureau
of Labor Relations in BLR Cases Nos. A-070-76 and 2106-76.

The petition alleges that on June 21, 1973, the National Labor Relations Commission certified a three-year
collective bargaining agreement between respondents Associated Labor Union (ALU) and Firestone Tire &
Rubber Company of the Philippines. Said collective bargaining agreement was to be effective from February 1,
1973 to January 31, 1976.

On February 1, 1974, the aforementioned respondents entered into a "Supplemental Agreement" extending the
fife of the collective bargaining agreement for one year, making it effective up to January 31, 1977. The
extension was not ratified by the covered employees nor submitted to the Department of Labor for
classification.

Within the sixty-day period prior to the original expiry date of the agreement, some 233 out of about 400 rank-
and-file employees of respondent Company resigned from respondent ALU. subsequently, the number of these
employees who resigned from the union was increased to 276 and, by way of letter to the Director of the Bureau
of Labor Relations, they requested for the issuance of a certificate of registration in favor of petitioner Firestone
Tire & Rubber Company Employees' Union (FEU).

On January 28, 1976, Registration Permit No. 8571-IP was issued to petitioner FEU. On February 10, 1976, ten
(10) days after the original expiry date of the collective bargaining agreement, petitioner FEU filed a petition
with the Bureau of Labor Relations for direct certification or certification election, 1 with the written consent of
308 employees, or 77% of the 400-man bargaining unit.

On February 20, 1976, respondent ALU filed with the Bureau of Labor Relations a petition for the cancellation
of the registration certificate of petitioner FEU, 2 alleging that at the time of FEU's registration, respondent ALU

15
was the recognized and certified collective bargaining agent in the unit, and that FEU had not submitted the
required sworn statement that there is no recognized or certified collective bargaining agent therein.

On February 23, 1976, respondent ALU prayed for the dismissal of R04-MED-143-76 on the grounds, among
others, that it has a pending petition for the cancellation of FEU's registration certificate and that there is an
existing collective bargaining agreement, due to expire on January 31, 1977, which constitutes a valid bar to the
holding of a certification election.

Respondent Company likewise opposed the holding of a certification election on the ground, however, that the
petition therefor was filed late, considering that it was filed ten (10) days after the expiry date of the collective
bargaining agreement.

On April 6, 1976, the Med-Arbiter issued an Order granting the petition for certification election, Respondents
ALU and the Company filed separate appeals from the order before the Bureau of Labor Relations.

The Order of the Med-Arbiter was affirmed by the Honorable Director Carmelo C. Noriel on September 23,
1976, and Motions for Reconsideration were filed by ALU and the Company on October 1, 1976.

On January 25, 1977, respondent Acting BLR Director Francisco L. Estrella issued a Resolution reversing the
Order of the Med-Arbiter which was affirmed by Director Noriel, and holding:

... that there indeed exists a prejudicial question involving the very legal personality of the
petitioner union. In BLR Case No. 210676, the validity of the registration certificate of petitioner
is at issue. It is therefore obvious that the present representation question should wait for the final
disposition of the issue on petitioner's legal personality, if only to forestall what may prove to be
unnecessary proceedings. 3

The issue of whether or not there was an existing collective bargaining agreement which serves as a bar to the
holding of a certification election was not resolved by respondent Acting Director Francisco L. Estrella.

On June 8, 1976, BLR Case No. 2106-76 for the cancellation of petitioner FEU's certificate of registration was
dismissed by the Med-Arbiter. Respondents ALU and the Company appealed to the Bureau of Labor Relations,
but the appeals were dismissal by Director Carmelo C. Noriel. Motions for Reconsideration were filed by the
same respondents and on January 25, 1977, respondent Acting Director Franco L. Estrella entered a Resolution
reversing the decision of Director Noriel and revoking the certificate of registration of petitioner FEU.
Respondent Acting Director Estrella ruled that according to Section 4, Rule II, Book V of the Rules of
Implementing the Labor Code, no union may be registered when there is in the bargaining unit a or certified
collective bargaining agent. The Acting Director found that there was such a bargaining agent in the unit
(ALU), and that there was in fact a collective bargaining agreement which was yet to expire on January 31,
1977. On that score, it was held that FEU's application for registration was premature, and that it should have
waited for the expiration of the collective bargaining agreement.

The two Resolution issued by Respondent Acting Director Francisco L. Estrella are subject of the instant
petition for review by way of certiorari.

It is petitioner's contention that the issue of whether or not there was an existing contract or collective
agreement to validity bar the holding of a certification election should have been resolved by respondent Acting
Director in BLR Case No. A-070-76, as it was already intertwined with the issue of petitioner's legal personality
as assailed in BLR Case No. 2106-76. According to petitioner, 'if the petition for certification election in this
case is not barred by the contract in question, then the registration certificate of petitioner, acquired as it was
16
within the sixty-day freedom period of such contract must, of necessity, be likewise not barred or denied as
premature." Likewise, petitioner alleges that 'there being no pronouncement on the applicability of the 'contract
bar' rule in this case, the cancellation of the registration certificate of petitioner is devoid of legal basis, hence it
was done by the respondent BLR Acting Director in grave abuse of discretion."

Further, it is petitioner's stand that the Acting Director erred in concluding that the collective bargaining
agreement was to expire on January 31, 1977, for which n he held that petitioner's application for registration
was premature. The expiry date of January 31, 1977, according to petitioner, was unauthorized because the
extension of the contract for a period of one year was not certified by the Department of Labor and was "used to
foil the constitutional right of the workers to self-organization and to engage in collective bargaining."

The petition prays that the Resolutions of respondent Acting Director, both dated January 25, 1977, be set aside,
and the orders/decisions of Director Carmelo C. Noriel, dated September 23, 1976 and October 8, 1976, be
affirmed.

Respondent Firestone Tire and Rubber Company of the Philippines filed its Comment to the instant petition,
contending, mainly, that petitioner FEU had no legal personality as a union because its non-compliance with
Section 4, Rule 11, Book V of the Rules and Regulations Implementing the Labor Code is sufficient ground for
the cancellation of its registration certificate.

Respondent ALU likewise filed its Comment, reiterating the contention that FEU had no legal personality to ask
for a direct certification or certification election because its certificate of registration was obtained fraudulently
and has, in fact, been cancelled.

In the meantime, due to the fact that the collective bargaining agreement had already expired, respondent ALU
demanded that respondent Company negotiate with it for a new agreement. The Company requested for specific
advice on the proper course of action from the department of Labor. In response to the request, the Department
answered that "in the absence of any adjudication from competent authority and in accordance with existing
jurisprudence

... there is no legal impediment for (the) Company to negotiate a new collective bargaining
agreement with the Associated Labor Unions.

Accordingly, a new collective bargaining agreement was entered into between ALU and the Company on April
1, 1977.

It appears that on January 31, 1977, FEU filed with Regional Office No. 4 Case No. R04-MED-808-77, a
petition for direct certification/certification election, utilizing its questioned Registration Permit No. 8571-IP,
dated January 26, 1976.

We find this petition meritorious. In BLR Case No. 2160-76, Director Carmelo C. Noriel, resolving the pivotal
issue of whether or not the failure of FEU to submit "a sworn statement ... to the effect that there is no
recognized or certified collective bargaining agent in the bargaining unit condemned warrants the revocation of
its registration, said:

This Bureau answers in the negative.

... notwithstanding the existence of a certified or recognized collective bargaining agent, the
policy of this Office sanctions a registration of new union during the freedom period especially if
it has become apparent that a substantial number of union members has decide(, to form a new
17
 labor organization, as aptly illustrated in the case at bar. If the rule were otherwise, no recourse
whatsoever hall be accorded to members of a bargaining unit who would like to make a free
choice of their bargaining representative, thereby placing the constitutional rights of the workers
to self-organization and collective bargaining in mockery, if not, in utter illusion.

This view is supported by precedents, it seems to be the better view that a contract does not operate as a bar to
representation proceedings, where it is shown that because of a schism in the union the contract can no longer
serve to promote industrial stability, and the direction of the election is in the interest of industrial stability as
well as in the interest of the employees' right in the selection of their bargaining representatives. 4 Basic to the
contract bar rule is the proposition that the delay of the right to select representatives can be justified only where
stability is deemed paramount. Excepted from the contract bar rule are certain types of contracts which do not
foster industrial stability, such as contracts where the Identity of the representative is in doubt. Any stability
derived from such contracts must be subordinated to the employees' freedom of choice because it does not
establish the type of industrial peace contemplated by the law. 5

In the case at bar, it is doubtful if any contract that may have been entered into between respondent ALU and
respondent Company will foster stability in the bargaining unit, in view of the fact that a substantial number of
the employees therein have resigned from ALU and joined petitioner FEU. At any rate, this is a matter that must
be finally determined by means of a certification election.

In Foamtex Labor Union-TUPAS vs. Noriel, 6 We said:

... The question of whether or not the disaffiliation was validly made appears not to be of much
significance, considering that the petition for direct certification is supported by eighty (80) out
of a total of one hundred twenty (120) of the rank and file employees of the unit. Pursuant to
Article 256 of the Labor Code, 'if there is any reasonable doubt as to whom the employees have
chosen as their representative for the purpose of collective bargaining, the Bureau shall order a
secret ballot election to be conducted by the Bureau to ascertain who is the freely chosen
representative of the employees concerned, ... It is very clear from the aforementioned
circumstances that there is actually a reasonable doubt as to whom the employees have chosen as
their representative for the purpose of collective bargaining.

As to whether or not the disaffiliation was actually and validly made, or whether Foamtex Labor
Union of respondent Belga is the true collective bargaining representative of the employee are
questions that need not be resolved independently of each other. Such questions may be
answered once and for all the moment is determined, by means of the secret ballot election, the
union to which the majority of the employees have really reposed their allegiance. The important
factor here is the true choice of the employees, and . the most expeditious and effective manner
of determining this is by means of the certification election, as it is for this very reason that such
procedure has been incorporated in the law. To order that a separate secret ballot election be
conducted for the purpose of determining the question of policy, i.e., whether or not the majority
of the employees desire to disaffiliate from the mother union, should be merely a circuitous way
of ascertaining the majority's true choice.

As observed PAFLU v. Bureau of labor Relation (69 SCRA 132, 139), a certification election for
the collective bargaining process is one of 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 in an honest election with freedom on the part of the voters to
make their choice, is controlling. No better device can assure the institution of industrial

18
 democracy with the two parties to a business enterprise, management and labor, establishing a
regime of self-rule.

Similarly, in Philippine Labor Alliance Council (PLAC) vs. Bureau of Labor Relations, et al., 7 it was held that
once the fact of disaffiliation has been demonstrated beyond doubt, a certification election is the most
expeditious way of determining which labor organization is to be the exclusive bargaining representative.

It appearing that the extension of the life of the collective bargaining agreement for a period of one year was not
certified by the Bureau of Labor Relations, it cannot, therefore, also bar the certification election. Only a
certified collective bargaining agreement would serve as a bar to such election. 8

Corollarily, therefore, petitioner's application for registration was not premature, as it need not have waited for
the expiration of the one-year extension, the agreement having expired on January 31, 1976.

WHEREFORE the instant petition for certiorari is granted. The two Resolutions, both dated January 25, 1977 in
BLR Cases Nos. A060-76 and 2106-76 are hereby REVERSED and set aside. Costs against private
respondents.

G.R. No. L-77282 May 5, 1989

ASSOCIATED LABOR UNIONS (ALU) petitioner,

vs.
HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations, Ministry of Labor and
Employment; PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); SOUTHERN
PHILIPPINES FEDERATION OF LABOR (SPFL) and GAW TRADING, INC., respondents.

Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and Ernesto Carreon for petitioner.

Henrick F. Gingoyon for respondent SPFL.

Wilfredo L. Orcullo for respondent Southern Philippines Federation of Labor.

Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.

REGALADO, J.:

Petitioner Associated Labor Unions (ALU, for brevity) instituted this special civil action for certiorari and
prohibition to overturn the decision of the respondent direcstor 1 dated December 10, 1986, which ordered the
holding of a certification election among the rank-and-file workers of the private respondent GAW Trading,
Inc. The averments in the petition therefor, which succinctly but sufficiently detail the relevant factual
antecedents of this proceedings, justify their being quoted in full, thus:

1. The associated Labor Unions (ALU) thru its regional Vice-Presidents Teofanio C. Nuñez, in a
letter dated May 7, 1986 (ANNEX C) informed GAW Trading, Inc. that majority of the latter's
employees have authorized ALU to be their sole and exclusive bargaining representative, and
requested GAW Trading Inc., in the same Letter for a conference for the execution of an initial
Collective Bargaining Agreement (CBA);

19
2. GAW Trading Inc. received the Letter of ALU aforesaid on the same day of May 7, 1986 as
acknowledged thereunder and responded (sic) ALU in a letter dated May 12, 1986 (Annex D)
indicating its recognition of ALU as the sole and exclusive bargaining agent for the majority of
its employees and for which it set the time for conference and/or negotiation at 4:00 P.M. on
May 12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu City;

3. On the following day of May13, 1986, ALU in behalf of the majority of the employees of
GAW Trading Inc. signed and excuted the Collective Bargaining (ANNEX F) ...

4. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc. and
GAW Trading Inc. signed and executed the Collective Bargaining Agreements (ANNEX F) . . . .

5. In the meantime, at about 1:00 P.M. of May 9, 1986, the Southern Philippines Federation of
Labor (SPFL) together with Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a ...
Strike ... after it failed to get the management of GAW Trading Inc. to sit for a conference
respecting its demands presented at 11: A.M. on the same day in an effort to pressure GAW
Trading Inc. to make a turnabout of its standign recognition of ALU as the sole and exclusive
bargaining representative of its employees, as to which strike GAW Trading Inc. filed a petition
for Restraining Order/Preliminary Injunction, dfated June 1, 1986 (Annex H) and which strike
Labor Arbiter Bonifacio B. Tumamak held as illegal in a decision dated August 5, 1986
(ANNEX I);

6. On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a
Certification Election petition (ANNEX J), but as found by Med-Arbiter Candido M. Cumba in
its (sic) Order dated Ju ne 11, 1986 (ANNEX K), without having complied (sic) the subscription
requirement for which it was merely considered an intervenor until compliance thereof in the
other petition for direct recogbnition as bargaining agent filed on MAy 28, 1986 by southern
Philippines Federation of Labor (SPFL) as found in the same order (ANNEX K);

7. Int he meantime, the Collective Bargaining Agreement executed by ALU and GAW Trading
Inc. (ANNEX F) was duly filed May 27, 1986 with the Ministry of Labor and Employment in
Region VII, Cebu city;

8. Nevertheless, Med-Arbiter Candido M. Cumba in his order of June 11, 1986 (Annex K) ruled
for the holding of a ceritfication election in all branches of GAW Trading Inc. in Cebu City, as to
which ALU filed a Motion for Reconsideration dated June 19, 1986 (ANNEX L) which was
treated as an appeal on that questioned Order for which reason the entire record of subject
certification case was forwarded for the Director, Bureau of LAbor Relations, Ministry of Labor
and Employment, Manila (ANNEX M);

9. Bureau of Labor Relations Director Cresencio B. Trajano, rendered a Decision on August 13,
1986 (Annex B) granting ALU's appeal (Motion for Reconsideration) and set aside the
questioned Med-Arbiter Order of June 11, 1986 (Annex K), on the ground that the CBA has been
effective and valid and the contract bar rule applicable;

10. But the same Decision of Director Crecensio B. Trajano was sought for reconsideratrion both
by Southern Philippines Federation of Labor (SPFL) on August 26, 1986 (ANNEX N),
supplemented by the 'SUBMISSION OD ADDITIONAL EVIDENCE' dated September 29,
1986 (ANNEX O), and the Philppine Social Security Labor Union (PSSLU) on October 2, 1986

20
 (ANNEX P), which were opposed by both GAW Trading, Inc. on September 2, 1986 (ANNEX
Q) and ALU on September 12, 1986 (ANNEX R); 2

The aforesaid decision of then Director Trajano was thereafter reversed by respondent director in her aforecited
decision which is now assailed in this action. A motion for reconsideration of ALU 3 appears to have been
disregarded, hence, its present resort grounded on grave abuse of discretion by public respondent.

Public respondent ordered the holding of a certification election ruling that the "contract bar rule" relied upon
by her predecessor does not apply in the present controversy. According to the decision of said respondent, the
collective bargaining agreement involved herein is defective because it "was not duly submitted in accordance
with Section I, Rule IX, Book V of the Implementing Rules of Batas Pambansa Blg. 130." It was further
observed that "(t)here is no proof tending to show that the CBA has been posted in at least two conspicuous
places in the 1 establishment at least five days before its ratification and that it has been ratified by the majority
of the employees in the bargaining unit."

We find no reversible error in the challenged decision of respondent director. A careful consideration of the
facts culled from the records of this case, especially the allegations of petitioner itself as hereinabove quoted,
yields the conclusion that the collective bargaining agreement in question is indeed defective hence
unproductive of the legal effects attributed to it by the former director in his decision which was subsequently
and properly reversed.

We have previously held that the mechanics of collective bargaining are set in motion only when the following
jurisdictional preconditions are present, namely, (1) possession of the status of majority representation by the
employees' representative in accordance with any of the means of selection and/or designation provided for by
the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, paragraph
(a), of the New Labor Code. 4 In the present case, the standing of petitioner as an exclusive bargaining
representative is dubious, to say the least. It may be recalled that respondent company, in a letter dated May 12,
1986 and addressed to petitioner, merely indicated that it was "not against the desire of (its) workers" and
required petitioner to present proof that it was supported by the majority thereof in a meeting to be held on the
same date. 5 The only express recognition of petitioner as said employees' bargaining representative that We see
in the records is in the collective bargaining agreement entered into two days thereafter. 6 Evidently, there was
precipitate haste on the part of respondent company in recognizing petitioner union, which recognition appears
to have been based on the self-serving claim of the latter that it had the support of the majority of the employees
in the bargaining unit. Furthermore, at the time of the supposed recognition, the employer was obviously aware
that there were other unions existing in the unit. As earlier stated, respondent company's letter is dated May 12,
1986 while the two other unions, Southern Philippine Federation of Labor (hereafter, SPFL and Philippine
Social Security Labor Union (PSSLU, for short), went on strike earlier on May 9, 1986. The unusual
promptitude in the recognition of petitioner union by respondent company as the exclusive bargaining
representative of the workers in GAW Trading, Inc. under the fluid and amorphous circumstances then
obtaining, was decidedly unwarranted and improvident.

It bears mention that even in cases where it was the then Minister of Labor himself who directly certified the
union as the bargaining representative, this Court voided such certification where there was a failure to properly
determine with legal certainty whether the union enjoyed a majority representation. In such a case, the holding
of a certification election at a proper time would not necessarily be a mere formality as there was a compelling
reason not to directly and unilaterally certify a union. 7

An additional infirmity of the collective bargaining agreement involved was the failure to post the same in at
least two (2) conspicuous places in the establishment at least five days before its ratification. 8 Petitioners
rationalization was that "(b)ecause of the real existence of the illegal strike staged by SPFL in all the stores of
21
GAW Trading, Inc. it had become impossible to comply with the posting requirement in so far as the realization
of tits purpose is concerned as there were no impartial members of the unit who could be appraised of the
CBA's contents. " 9 This justification is puerile and unacceptable.

In the first place, the posting of copies of the collective bargaining agreement is the responsibility of the
employer which can easily comply with the requirement through a mere mechanical act. The fact that there
were "no impartial members of the unit" is immaterial. The purpose of the requirement is precisely to inform the
employees in the bargaining unit of the contents of said agreement so that they could intelligently decide
whether to accept the same or not. The assembly of the members of ALU wherein the agreement in question
was allegedly explained does not cure the defect. The contract is intended for all employees and not only for the
members of the purpoted representative alone. It may even be said the the need to inform the non-members of
the terms thereof is more exigent and compelling since, in all likehood, their contact with the persons who are
supposed to represent them is limited. Moreover, to repeat, there was an apparent and suspicious hurry in the
formulation and finalization of said collective bargaining accord. In the sforementioned letter where respondent
company required petitioner union to present proof of its support by the employees, the company already
suggested that petitioner ALU at the same time submit the proposals that it intended to embody in the projected
agreement. This was on May 12, 1986, and prompltly on thre following day the negoltiation panel; furnish
respondent company final copies of the desired agreement whcih, with equal dispatch, was signed on May 15,
1986.

Another potent reason for annulling the disputed collective bargaining is the finding of respondent director that
one hundred eighty-one( 181) of the two hundred eighty-one (281) workers who "ratified" the same now "
strongly and vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA.
" 10 Although petitioner claims that only sev en (7) of the repudiating group of workers belong to the total
number who allegedly ratified the agreement, nevertheless such substantiated contention weighed against the
factujal that the controverted contract will not promote industrial stability . The Court has long since declared
that:

... Basic to the contract bar rule is the proposition that the delay of the right to select represen
tatives can be justified only where stability is deemed paramount. Excepted from the contract
which do not foster industrial stability, such as contracts where the identity of the representative
is in doubt. Any stability derived from such contracts must be subordinated to the employees'
freedom of choice because it does nto establish the type of industrial peace contemplated by the
law. 11

At this juncture, petitioner should be reminded that the technical rules of rpocedure do not strictly apply in the
adjudication of labor disputes. 12 Consequently, its objection that the evidence with respect to the aforesaid
repudiiation of the supposed collective bargaining agreement cannot be considered for the first time on appeal
on the Bureau of Labor Relations should be disregarded, especially considering the weighty significance
thereof.

Both petitioner and private respondent GAW Trading, Inc. allege that the employees of the latter are now
enjoying the benefits of the collective bargaining agreement that both parties had forged. However, We cannot
find sufficient evidence of record to support this contention. The only evidence cited by petitioner is supposed
payment of union fees by said employees, a premise too tenuous to sustain the desired conclusion. Even the
actual number of workers in the respondent company is not clear from the records. Said private respondent
claims that it is two hundred eighty-one (281) 13 but petitioner suggests that it is more than that number. The
said parties should be aware that this Court is not an adjudicator of facts. Worse, to borrow a trite but apt
phrase, they would heap the Ossa of confusion upon the Pelion of uncertainty and still expect a definitive ruling
on the matter thus confounded.
22
Additionally, the inapplicability of the contract bar rule is further underscored by the fact that when the disputed
agreement was filed before the Labor Regional Office on May 27, 1986, a petition for certification election had
already been filed on May 19, 1986. Although the petition was not supported by the signatures of thirty percent
(30%) of the workers in the bargaining unit, the same was enough to initiate said certification election.

WHEREFORE, the order of the public respondent for the conduct of a certification election among the rank-
and-file workers of respondent GAW Trading Inc. is AFFIRMED. The temporary restraining order issued in
this case pursuant to the Resolution of March 25, 1987 is hereby lifted.

SO ORDERED.

G.R. No. L-62037 January 27, 1983

UNITED CMC TEXTILE WORKERS UNION and ERNESTO TONGCO, petitioners,

vs.
HON. BLAS F. OPLE, HON. ROMEO YOUNG, MAX LIM, CENTRAL TEXTILE MILLS INC.,
GEORGE LIM AND CESAR SY, respondents.

Arcadio Lopez and Cesar Maravilla for petitioners.

The Solicitor General for respondent Ople.

Cruz, Durian Agabin, Atienza and Alday for private respondent.

GUTIERREZ, JR., J.:

The United CMC Textile Workers Union and its president, Ernesto Tongco, filed this petition for certiorari,
prohibition, and injunction with prayer for a restraining order on October 11, 1982 to set aside three orders of
the Minister of Labor and Employment. The first order dated August 25, 1982 certified the labor dispute at the
Central Textile Mills for compulsory arbitration by the National Labor Relations Commission.1äwphï1.ñët The
second order dated September 13, 1982 mandated the Minister's assumption of jurisdiction over the deadlock on
economic issues in collective bargaining. The third order dated October 6, 1982 directed the sinking workers th
return to work immediately and management to accept them under the same terms and conditions prevailing
previous to the work stoppage.

The material facts forming the background of this petition are summarized in the public respondent's answer as
follows:

1 On November 6, 1981 the Philippine Transport and General Workers Organization (PTGWO)
Local Chapter 486 filed a petition for certification election among the rank-and-file workers of
herein respondent Central Textile Mills Inc. (hereinafter referred as respondent company). The
petition was docketed as Case No. LRDM-10-465-81 of the Med-Arbiter Section of the National
Capital Region, Ministry of Labor. Herein petitioner United CMC Textile Union (hereinafter
referred to as petitioner Union) entered its appearance as intervenor.

2. Acting on the petition, Med-Arbiter Edgardo de la Cruz issued an order on November 17,
1981 enjoining both unions from negotiating a collective bargaining agreement with herein
respondent Company.

23
3 Thereafter certification election was conducted on March 20, 1982. Herein petitioner Union
was Proclaimed the winner. After the motion of PTGWO for the reconsideration of the
proclamation of herein petitioner Union was denied, the negotiation for a collective bargaining
agreement resumed. However, it appears the negotiation was deadlock over certain economic
demands of petitioners.

4. On July 8, 1982, petitioner Union filed with the Bureau of Labor Relations (BLR) a notice of
strike based on "Unresolved economic issues in the collective bargaining ..." The case docketed
as BLR Case No. S7 2077-82, was scheduled for hearing on July 15, 1982, before Labor
Conciliator Baguilod. For undisclosed reasons, petitioner Union again filed another notice of
strike with the National Capital Region NCR The case, docketed as NCR Case No. NS-7-036-82,
was scheduled for hearing on July 21, 1982 before Labor Conciliator Venture. Petitioner Union
then asked that the cases be consolidated and jointly heard by Conciliator Venture. This was
objected to by respondent Company which asked instead for the dismissal of the second case.
The first case was heard on July 15, 1982, before Conciliator Baguilod, while the second case
was heard on July 21 and August 9 and 11, 1982, before Conciliator Venture.

5. Conferences between the parties themselves and before the conciliators yielded no positive
results. On August 12, 1982, a conference was held before respondent Romeo Young who was
then the Assistant Director for the National Capital Region, Ministry of Labor. This too failed to
resolve the deadlock. On that day, petitioner Union served a formal notice to respondent Young
that it will go on strike the next day, August 13, 1982.

6. Petitioner went on strike on August 13, 1982. Claiming that it has been hard hit by inflation,
respondent Company requested on the same day respondent Minister of Labor to certify the
matter to the National Labor Relations Commission for compulsory arbitration. In its letter-
request, respondent Company pointed out that the textile industry was in its worst and saddest
state of affairs. Respondent Company was itself allegedly "seriously affected by the recent
economic downturn in business and (was) hardly able to make ends meet." It pointed out that
"any further prolongation of this strike will only result in the detriment of the national interest
and is definitely not the solution to our problem." Copy of the letter is attached hereto as Annex
1.

7. Simultaneously, respondent Company sent to Deputy Minister Carmelo Noriel a letter

pointing out the dismal performance of the textile industry during 1980-1982 and the
employment picture in industry, particularly the textile industry, during the same period.
Attached to the letter was Circular No. 35 of the Textile Mills Association calling to the attention
of the members of the association data regarding the performance of the textile industry from
January 1980 to March 1982 culled from brochure entitled "Key Industrial Indicator" published
by the Ministry of Trade and Industry; a newspaper report on statistics on labor layoffs compiled
by the Labor Statistic Services of the Ministry of Labor and Employment; several summaries of
export sales in 1981 to 1982 of respondent Company; and a certificate of registration of
respondent Company with the Board of Investments. The letter and its enclosures, attached
hereto as Annex 2, et sequential show the following:

(a) The textile industry in general is in distress;

(b) Among the industries most affected by labor layoffs in 1981 was the textile industry which
occupied second position.

24
(c) Cost of production has gone up because of higher costs of raw materials, power and
financing;

(d) The net sales of respondent Company have dropped;

(e) Respondent Company is registered with the Board of Investments as of October 16, 1971 as
an export producer.

8. After efforts to settle the strike in the conferences held on August 17, 20 and 23, 1982, failed,
respondent Minister certified on August 25, 1980, the labor dispute to the National Labor
Relations Commission. In his order, respondent Minister required the workers to return to work
and respondent Company to immediately resume operations.

9. Petitioners did not comply with the certification order. Instead, it filed on the same day,
August 25, 1982, an urgent motion for reconsideration therof. Thereafter, respondent Young
tried to settle the labor dispute in two conferences held on August 27, 1982 and on September 7,
1982, but to no avail.

10. On September 13, 1982, respondent Minister issued an order denying petitioners' motion for
reconsideration. In said order, he personally assumed jurisdiction over the labor dispute because
of the inconclusive result of his referral of the dispute to the National Labor Relations
Commission. Further, he required respondent Company to pay the workers their accrued cost of
riving allowances within twenty days.

11. On September 17, 1982, petitioners Med a motion to set aside the assumption of jurisdiction.
On the same day, the parties met in a conference before respondent Young. In said conference,
the parties agreed that respondent Company will pay the accrued on September 23, 1982, after
which the workers shall immediately return to work.

12. The agreement was not fulfilled, and her efforts to e the differences of the parties during the
conciliation conferences held on September 23 and 30, and October 4, 1982, were likewise
unavailing.

13. Finding that conciliation would no longer serve any useful purpose, respondent, Minister
issued an order on October 6, 1982, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, the United CMC Textile Mills are hereby ordered to file their
respective position papers on the bargaining deadlock and other issues incidental to the work
stoppage within 10 days from receipt of this order. All striking workers are hereby directed to
return to work immediately and management to accept them under the same terms and conditions
prevailing previous to the work stoppage. Management is further directed to comply immediately
with its obligation to pay all accrued allowances to its workers. Both parties are hereby enjoined
from committing any act of harassment, intimidation or coercion against the other and to observe
strictly the status quo. This Office further directs both parties to comply with this Order and the
Order dated 13 September 1982 within seventy-two (72) hours from receipt hereof, a violation of
which constitutes a ground for contempt and other legal action.

Accordingly, the motion to lift the order of assumption of jurisdiction and the manifestation to
hire replacements by management are hereby denied.

25
 Pursuant to the provisions of the Labor Code as amended, particularly Section 11 of B.P. 130
and Section 6 of B. P. 227, military and police authorities/hereby requested to enforce this Order,
protect the rights of both parties, ensure the free ingress to and egress from the company
premises for lawful purposes, assure the right to peaceful picketing and maintain peace and
order.

This Order is final and not subject to any motion for reconsideration.

On October 19, 1982, after hearing the oral arguments of the parties' respective counsel we issued a resolution
stating that

... the Court Resolved to DEFER action on the petition for pre injunction or restraining order in
view of the manifestation made by Assistant Solicitor-General Romeo De la Cruz, for public
respondents and Atty. Rafael T. Durian for private respondents that return to work order win be
held in abeyance pending the resolution of the motion for the issuance of a restraining order, and
to order the private respondents Central Textile Mills, Inc., George Lim, and Cesar Sy to comply
with the commitment made in open court that all accrued allowances of all workers shall be paid
not later than 5:00 o'clock in the afternoon of Thursday, October 21, 1982 and to submit within
ten (10) days from today or not later than October 29, 1982 the financial statements of the
respondent corporation submitted to the Securities and Exchange Commission for the past three
(3) years such as the balance sheets, income statements, statements of goods manufactured, and
schedule of taxes; statements on the accumulated surplus or deficits over the past three (3) years;
the schedule of salaries, allowances, and other compensation of executive and junior executive
company officials; and evidence of alleged acts of interference with ingress and egress into
company premises committed by the petitioners.

The petitioners contend that the questioned orders of the Minister of Labor and Employment must be annulled
and set aside because the exercise of power and assumption of jurisdiction by the Minister over the labor
dispute at Central Textile Mills, Inc. is illegal and void on the following grounds:

a. SUBVERSIVE OF THE WORKERS' CONSTITUTIONAL RIGHTS TO FREE

COLLECTIVE BARGAINING AND SELF-ORGANIZATION;

b. IN DEROGATION OF ILO CONVENTION NO. 87;

c. VIOLATIVE OF THE WORKERS' CONSTITUTIONAL RIGHT TO FREEDOM OF

EXPRESSION;

d. A NEGATION OF THE UNDERLYING PRINCIPLES OF "LAISSEZ FAIRE" UNDER P.D.

442 AS AMENDED BY B.P. 227.

The invocation of the workers constitutional rights to free collective bargaining and self organization, to
freedom from governmental intervention in collective bargaining pursuant to ILO Convention No. 87, and to
underlying principles of "laissez faire" which are allegedly violated by a referral for compulsory arbitration
belabors an issue which issue long been moot and academic. The 1935 Constitution itself authorized the State to
provide for compulsory arbitration thus foreclosing any debate on whether or not it should form part of labor
law in our country. Sec. 6 of Article XIV of the 1935 Constitution provided:

Sec. 6. The State shall afford protection to labor, especially to working women and minors, and
shall regulate the relations between landowners and tenant, and between labor and capital in
26
 industry and in agriculture. The State may provide for compulsory arbitration. (Emphasis
supplied.)

We have passed upon and declared valid the certifications of labor disputes to the Court of Industrial Relations,
now abolished. (See Pampanga Sugar Development Co. v. Court of Industrial Relations, 1 SCRA 770; FEATI
University v. Bautista, 18 SCRA 1191; Bachrach Transportation Co. v. Rural Transit Shop Employees
Association, 20 SCRA '7).) Article 11, section 9 of the Constitution expressly reiterated the very exercise of
power which the petitioners contend is unconstitutional. The protection to labor provision now states:

Sec. 9. The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure. and just and humane conditions of
work. The State may provide for compulsory arbitration. (Emphasis supplied.)

The fact that a labor dispute has been referred to the proper administrative agency or tribunal for compulsory
arbitration does not mean that the protections and freedoms of workers are thereby sacrificed. In resolving a
labor dispute through compulsory arbitration, the Ministry of Labor and Employment is even more strictly
bound to comply with the mandates of Section 9, Article II of the Constitution and to faithfully adhere to the
letter and spirit of the mass of Supreme Court decisions which, over the years since the protection to labor
provision was adopted in Section 6 Article XIV of the 1935 Constitution, have given this provision,
unmistakably and Page 363 clearly, an interpretation requiring preferential consideration for the claims of labor.
In the words of Chief Justice Enrique M. Fernando, "the obligation to protect labor is incumbent on the state. It
is a command to live up to. in the final analysis, it is as simple as that. That is the welfare state concept
vitalized." (Fernando, The Constitution of the Philippines, 2nd Edition p. 83).

Free Telephone Workers Union v. Minister of Labor and Employment (108 SCRA 757), which was penned for
the Court by the Chief Justice, declares:

... It must be stressed anew, however, that the power of compulsory arbitration, while allowable
under the Constitution and quite understandable in labor disputes affected with a national
interest, to be free from the taint of unconstitutionality, must be exercised in accordance with the
constitutional mandate of protection to labor. The arbiter then is caned upon to take due care that
in the decision to be reached, there is no violation of 'the rights of workers to self-organization,
collective bargaining, security of tenure, and just and humane conditions of work. Artiela II,
Section 9 of the Constitution.)

It is, therefore, error for the petitioners to allege that by the mere act of certifying a labor dispute for compulsory
arbitration and issuing a return to work order, the Minister of Labor and Employment thereby "enters the picture
on the side of the Company," and violates the freedom of expression of workers engaged in picketing, "in utter
subversion of the constitutional rights of workers." As contended by the Solicitor General, "there can be no such
unconstitutional application (of Batas Pambansa Blg. 227) because an that respondent Minister has done is to
certify the labor dispute for arbitration and thereafter personally assume jurisdiction over it. He has not rendered
any decision; he has not favored one party over another."

The petitioners lit themselves to assailing the concept itself of compulsory arbitration as subversive of the rights
of labor.1äwphï1.ñët There is nothing in the petition that points to any constitutional infirmity of Article 264(g)
of the Labor Code as amended by Batas Pambansa Blg. 227, which governs the exercise of the constitutionally
recognized power.

27
Indeed, the petitioners rely on P.D. 442, as amended by B.P. 227 thus admitting its validity because at page 17
of their petition, they state that "Batas Pambansa 227 in amending the labor Code was so designed to alleviate
and rationalize labor management relations. It was never intended to curtail the constitutional rights of citizens
much less the underlying principle of free enterprise under the Labor Code or in Philippine society."

Parenthetically, we have had occasion to uphold the validity of Batas Pambansa Blg. 227 in Free Telephone
Workers Union v. Minister of Labor and Employment earlier cited.

What is really challenged in this petition is the act of the Minister of Labor and Employment in certifying this
particular dispute for compulsory arbitration. Does the dispute fall within the statutory provision?

Article 264(g) of the Labor Code, as amended by B.P. 227, provides:

(g) When in his opinion there exists a labor dispute causing or likely to cause strikes or lockouts
adversely affecting the national interest, such as may occur in but not limited to public utilities,
companies engaged in the generation or distribution of energy, banks, hospitals, and export-
oriented industries including those within export processing zones, the Minister of Labor and
Employment shall assume and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If
one has already taken place at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the
strike or lockout. The Minister may seek the assistance of law enforcement agencies to ensure
compliance with this provision as wen as with such orders as he may issue to enforce the same.

There is no question about the existence of a labor dispute which has caused a strike. The petitioner union
declared a strike on August 13, 1982 and since then company operations have been paralyzed. Moreover, the
strike has not been a consistently peaceful one. With both labor and management charging each other with the
commission of acts of violence, we have no doubt that unlawful acts have indeed been perpetrated. The
voluminous affidavits, manifestations, and photographs submitted by both petitioners and respondents show that
only the timely exercise of restraint and perhaps providential luck has kept the strike from resulting in tragedy
to some of the protagonists.

The law authorizes the Minister of Labor and Employment to certify a labor dispute for compulsory arbitration
where the strike or lockout adversely affects the national interest, "such as may occur in but not limited to
public utilities, companies engaged in the generation or distribution of energy, banks, hospitals and export-
oriented industries including those within export processing zones." (Article 264(g) of the Labor Code.)

The legislative determination found in Article 264(g) of the Labor Code of some industries, which if paralyzed
by a strike or lockout, would adversely affect the national interest is of great help in determining the validity of
the questioned orders. As enunciated by Justice Laurel, speaking for this Court in Angara v. Electoral
Commission (63 Phil. 139), "the judiciary in the determination of actual cases and controversies must reflect the
wisdom of the people as expressed through their representatives in the executive and legislative departments of
the government.

Export-oriented industries are categorized by the legislature as affected with national interest. The petitioners
have adduced no reasons to overthrow the legislative determination that an export-oriented industry is one that
affects national interest. Instead, they asserted during the October 19, 1982 hearing that "export-oriented
industry" does not apply to Central Textile Mills, Inc.
28
The respondent Minister gave the following reasons why he certified the labor dispute at Central Textile Mills,
Inc., for compulsory , arbitration and ordered the return to work of workers and resumption of operations by the
management:

The Central Textile Mills employs more than 3,000 workers. it is engaged in the production of
textile fabrics for export as well as for domestic consumption with a high value added on the raw
materials used in the production.

The Ministry of Trade and Industry disclosed that despite improved sales in the textile industry
for 1982 its actual value, based on 1980 prices, has gone down. Inventory of raw materials has
decreased by 33% below the 1980 level. Also, employment in the industry has decreased by 31%
as compared to 1980 levels. Records from the National Economic Development Authority reveal
that in 1980 retrenchments and layoffs went up to 710. In 1981 layoffs went up to a new
recorded high of 19,210 with permanent layoffs increasing by 1,871. A prolonged work stoppage
in the company is inimical to the national interest as it seriously affects the viability of the entire
textile industry generally considered as a distressed sector of the economy. Should the strike
persist, the possibility of closure would become imminent resulting to the loss of jobs of a big
number of employees that would aggravate unemployment in the country. The work stoppage at
the company should not be allowed to continue indefinitely. An immediate effective action
through compulsory arbitration is necessary.

Without in any way passing upon the merits of the labor dispute which shall be considered during the
compulsory arbitration proceedings we find the order not affected by constitutional or statutory infirmity.

In arriving at this determination, not a few of us did so with considerable reluctance because of the apparent
foot dragging on the part of the private respondents in complying with our order to pay allowances due before
the strike and because of what impressed some of the members of the Court as the undue hostility of
management to unquestioned rights of the workers instead of displaying acts of accommodation and goodwill,
of bending over before positions had hardened which the workers would undoubtedly have reciprocated by also
moving forward from their set positions. It is error for the management of any firm beset by labor disputes to
feel that it can do anything short of criminal or tortious acts to obstruct or weaken unionism simply because the
firm may happen to fall under those industries covered by compulsory arbitration The employer cannot find
shelter in legislative policy for anti-labor acts because, as earlier stated, the statute is to be applied by the
Ministry of Labor and Employment consistent with the social justice and protection to labor clauses of the
Constitution.

The respondent Minister has certified that Central Textile Mills, which employs more than 3,000 workers, is
engaged in the production of textile fabrics for export as well as for domestic consumption with a high value
added on the raw materials used in the production. The statement submitted to the Board of Investments on
April 8, 1980 indicates that the respondent firm exported 257,482.75 yards of fabrics worth P1,735,242.39 in
the first three months of 1980 alone. The respondent Minister has also determined that the company's products,
such as towels and the like, have a high value added upon the raw material because of the manufacturing
process. Manufactured items which acquire a value much higher than the cost of the raw material and which are
exported bring the manufacturer within the definition of "export-oriented" industry under the implementing
rules of the Ministry of Labor and Employment.

At any rate, the danger to national interest lies in the collapse of the entire textile industry which is
unquestionably distressed today.1äwphï1.ñët The implications for the nation's foreign exchange earnings and
for economic stability in the entire country cannot be ignored. The petitioners contend that the textile industry
may be distressed but Central Textile Mills, Inc. is not distressed because it "is gaining profits by the hundreds
29
of thousands each year" (Petition, p. 14). On the other hand the private respondents have submitted financial
statements to show that with assets of P109,040,375.53, total sales of P86,525,173.45, direct labor costs of
P12,723,186.72, and manufacturing overhead (which includes bonuses, employees welfare, indirect labor,
janitorial services, SSS contributions, depreciation, energy or electricity and water, and maintenance) of
P28,575,710.17 in the year 1979, the net profit after tax was only P398,616.17. (Annex 3, pp. 154-156, Rollo).
the claims of both parties on the economic picture of the respondent firm will be threshed out in the course of
compulsory arbitration proceedings, but the firm has made a prima facie showing that for all its huge
capitalization and operating expenses it is barely breaking even and may be in danger of going under. The
Minister of Labor and Employment bas reason to be concerned that one textile firm after another, including to
seemingly healthy ones, should not, domino-like, join the many firms now operating at a loss, subjected to
government takeovers, or completely stopping operations and unleashing workers to swell the unfortunate
groups of unemployed or underemployed Persons. The Government has. to view industries from a broader
perspective when it is constrained to move in and exercise the constitutionally granted power of compulsory
arbitration in labor disputes. The public respondents cannot act on the basis of the petitioners' argument that the
alleged losses and lay offs in the textile industry are event and have no bearing because the union is negotiating,
not with the textile industry, but with the Central Textile Mills. During the October 19, 1982 hearing, both
petitioners and respondents assured the Court that continued efforts to arrive at a mutually acceptable solution,
without need of COMPULSORY arbitration, would be continuously and earnestly Pursued by them. The efforts
have proved futile. We sustain the exercise of official discretion by the public respondents.

WHEREFORE, the petition for certiorari, prohibition, and injunction is hereby dismissed.

SO ORDERED.

Makasiar, Concepcion, Jr., Guerrero, De Castro, Melencio-Herrera Plana, Escolin, Vasquez and Relova, JJ.,
concur.

Teehankee, J., took no part.

Aquino, J., concurs in the result.

Abad Santos, J., I reserve my vote.

Separate Opinions

FERNANDO, CJ., concurring:

concurs in the ably-written opinion of Court penned by Justice Gutierrez. It is worth repeating that do on
compulsory arbitration should not lend itself to a construction obviously at war with the fundamental principles
of social justice and protection to labor. Without being unfair to the parties representing capital, the State
through the Ministry of Labor and Employment is duty bound to implement such constitutional objectives —
especially when it exercises the power of compulsory arbitration. The Free Telephone Workers Union decision
cited in the opinion of the Court is quite categorical on the matter. That is to abide by the mandates of the
Constitution. A word more. The conduct of private respondents Central Textile Mills Inc., George Lim and
Cesar Sy, characterized in the opinion of the Court as betraying "undue hostility" to the rights of the workers is
deserving of censure.

Separate Opinions

FERNANDO, CJ., concurring:

30
concurs in the ably-written opinion of Court penned by Justice Gutierrez. It is worth repeating that do on
compulsory arbitration should not lend itself to a construction obviously at war with the fundamental principles
of social justice and protection to labor. Without being unfair to the parties representing capital, the State
through the Ministry of Labor and Employment is duty bound to implement such constitutional objectives —
especially when it exercises the power of compulsory arbitration. The Free Telephone Workers Union decision
cited in the opinion of the Court is quite categorical on the matter. That is to abide by the mandates of the
Constitution. A word more. The conduct of private respondents Central Textile Mills Inc., George Lim and
Cesar Sy, characterized in the opinion of the Court as betraying "undue hostility" to the rights of the workers is
deserving of censure.

G.R. No. 96425 February 4, 1992

PROGRESSIVE DEVELOPMENT CORPORATION, petitioner,

vs.
THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-
ARBITER EDGARDO DELA CRUZ and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-
TUCP, respondents.

Beltran, Bacungan & Candoy for petitioner.

Jimenez & Associates co-counsel for petitioner.

GUTIERREZ, JR., J.:

The controversy in this case centers on the requirements before a local or chapter of a federation may file a
petition for certification election and be certified as the sole and exclusive bargaining agent of the petitioner's
employees.

Petitioner Progressive Development Corporation (PDC) filed this petition for certiorari to set aside the
following:

1) Resolution dated September 5, 1990, issued by respondent Med-Arbiter Edgardo dela Cruz, directing the
holding of the certification election among the regular rank-and-file employees of PDC:

2) Order dated October 12, 1990, issued by the respondent Secretary of Labor and Employment, denying PDC's
appeal; and

3) Order dated November 12, 1990, also issued by the respondent Secretary, denying the petitioner's Motion for
Reconsideration.

On June 19, 1990, respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP (hereinafter referred to as
Kilusan) filed with the Department of Labor and Employment (DOLE) a petition for certification election
among the rank-and-file employees of the petitioner alleging that it is a legitimate labor federation and its local
chapter, Progressive Development Employees Union, was issued charter certificate No. 90-6-1-153. Kilusan
claimed that there was no existing collective bargaining agreement and that no other legitimate labor
organization existed in the bargaining unit.

Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the local union failed to comply
with Rule II Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires the

31
submission of: (a) the constitution and by-laws; (b) names, addresses and list of officers and/or members; and
(c) books of accounts.

On July 16 , 1990, respondent Kilusan submitted a rejoinder to PDC's motion to dismiss claiming that it had
submitted the necessary documentary requirements for registration, such as the constitution and by-laws of the
local union, and the list of officers/members with their addresses. Kilusan further averred that no books of
accounts could be submitted as the local union was only recently organized.

In its "Supplemental Position Paper" dated September 3, 1990, the petitioner insisted that upon verification with
the Bureau of Labor Relations (BLR), it found that the alleged minutes of the organizational meeting was
unauthenticated, the list of members did not bear the corresponding signatures of the purported members, and
the constitution and by-laws did not bear the signature of the members and was not duly subscribed. It argued
that the private respondent therefore failed to substantially comply with the registration requirements provided
by the rules. Additionally, it prayed that Med-Arbiter Edgardo dela Cruz inhibit himself from handling the case
for the reason that he allegedly had prejudged the same.

In his September 5, 1990 resolution, Med Arbiter dela Cruz held that there was substantial compliance with the
requirements for the formation of the chapter. He further stated that mere issuance of the charter certificate by
the federation was sufficient compliance with the rules. Considering that the establishment was unorganized, he
maintained that a certification election should be conducted to resolve the question of representation.

Treating the motion for reconsideration filed by the PDC as an appeal to the Office of the Secretary,
Undersecretary Laguesma held that the same was merely a "reiteration of the issues already ventilated in the
proceedings before the Med-Arbiter, specifically, the matter involving the formal organization of the chapter."
(Rollo, p. 20) PDC's motion for reconsideration from the aforementioned ruling was likewise denied. Hence,
this petition.

In an order dated February 25, 1991, the Court resolved to issue a temporary restraining order enjoining the
public respondents from carrying out the assailed resolution and orders or from proceeding with the certification
election. (Rollo, pp. 37-39)

It is the petitioner's contention that a labor organization (such as the Kilusan) may not validly invest the status
of legitimacy upon a local or chapter through the mere expedient of issuing a charter certificate and submitting
such certificate to the BLR (Rollo, p. 85) Petitioner PDC posits that such local or chapter must at the same time
comply with the requirement of submission of duly subscribed constitution and by-laws, list of officers and
books of accounts. (Rollo, p. 35) PDC points out that the constitution and by-laws and list of officers submitted
were not duly subscribed. Likewise, the petitioner claims that the mere filing of the aforementioned documents
is insufficient; that there must be due recognition or acknowledgment accorded to the local or chapter by BLR
through a certificate of registration or any communication emanating from it. (Rollo, p. 86)

The Solicitor General, in behalf of the public respondent, avers that there was a substantial compliance with the
requirements for the formation of a chapter. Moreover, he invokes Article 257 of the Labor Code which
mandates the automatic conduct by the Med-Arbiter of a certification election in any establishment where there
is no certified bargaining agreement.

The Court has repeatedly stressed that the holding of a certification election is based on a statutory policy that
cannot be circumvented. (Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation
v. Ferrer-Calleja, 168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions, 134 SCRA
82 [1986]). The workers must be allowed to freely express their choice in a determination where everything is
open to their sound judgment and the possibility of fraud and misrepresentation is eliminated.
32
But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election in
an unorganized establishment, it also requires that the petition for certification election must be filed by a
legitimate labor organization. Article 242 enumerates the exclusive rights of a legitimate labor organization
among which is the right to be certified as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining.

Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered
with the DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of
the Implementing Rules likewise defines a legitimate labor organization as "any labor organization duly
registered with the DOLE and includes any branch, local or affiliate thereof. (Emphasis supplied)

The question that now arises is: when does a branch, local or affiliate of a federation become a legitimate labor
organization?

Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 234
(Requirements of Registration):

Any applicant labor organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following
requirements:

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

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

(c) The names of all its members comprising at least twenty 20% percent of all the employees in
the bargaining unit where it seek to operate;

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

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

And under Article 235 (Action on Application)

The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer
of the organization, as the case may be, and attested to by its president.

Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be
signed by at least twenty percent (20%) of the employees in the appropriate bargaining unit and be accompanied
by a sworn statement of the applicant union that there is no certified bargaining agent or, where there is an
existing collective bargaining agreement duly submitted to the DOLE, that the application is filed during the
last sixty (60) days of the agreement.

33
The respondent Kilusan questions the requirements as too stringent in their application but the purpose of the
law in prescribing these requisites must be underscored. Thus, in Philippine Association of Free Labor Unions
v. Secretary of Labor, 27 SCRA 40 (1969), the Court declared:

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of
assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The
registration prescribed in Paragraph (b) of said section is not a limitation to the right of assembly
or association, which may be exercised with or without said registration. The latter is merely a
condition sine qua non for the acquisition of legal personality by the labor organizations,
associations or unions and the possession of the "rights and privileges granted by law to
legitimate labor organizations." The Constitution does not guarantee these rights and the
privileges, much less said personality, which are mere statutory creations, for the possession and
exercise of which registration is required to protect both labor and the public against abuses,
fraud or impostors who pose as organizers, although not truly accredited agents of the union
they purport to represent. Such requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of workers are engaged affect
public interest, which should be protected. Furthermore, the obligation to submit financial
statements, as a condition for the non-cancellation of a certificate of registration, is a reasonable
regulation for the benefit of the members of the organization, considering that the same generally
solicits funds or membership, as well as oftentimes collects, on behalf of its members, huge
amounts of money due to them or to the organization. (Emphasis supplied)

But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. The provisions governing union affiliation are found in
Rule II, Section 3, Book V of the Implementing Rules, the relevant portions of which are cited below:

Sec. 3. Union affiliation; direct membership with national union. — An affiliate of a labor
federation or national union may be a local or chapter thereof or an independently registered
union.

a) The labor federation or national union concerned shall issue a charter certificate indicating the
creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of
Labor Relations within thirty (30) days from issuance of such charter certificate.

b) An independently registered union shall be considered an affiliate of a labor federation or

national union after submission to the Bureau of the contract or agreement of affiliation within
thirty (30) days after its execution.

xxx xxx xxx

e) The local or chapter of a labor federation or national union shall have and maintain a
constitution and by laws, set of officers and books and accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or national
unions shall be observed.

Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration
while paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in
the foregoing differentiation is the fact that a local or chapter need not be independently registered. By force of
law (in this case, Article 212[h]); such local or chapter becomes a legitimate labor organization upon
compliance with the aforementioned provisions of Section 3.
34
Thus, several requirements that are otherwise required for union registration are omitted, to wit:

(1) The requirement that the application for registration must be signed by at least 20% of the employees in the
appropriate bargaining unit;

2) The submission of officers' addresses, principal address of the labor organization, the minutes of
organizational meetings and the list of the workers who participated in such meetings;

3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list
of the members who participated in it.

Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a
registered federation or national union is to encourage the affiliation of a local union with the federation or
national union in order to increase the local union's bargaining powers respecting terms and conditions of labor.

The petitioner maintains that the documentary requirements prescribed in Section 3(c), namely: the constitution
and by-laws, set of officers and books of accounts, must follow the requirements of law. Petitioner PDC calls
for the similar application of the requirement for registration in Article 235 that all requisite documents and
papers be certified under oath by the secretary or the treasurer of the organization and attested to by the
president.

In the case at bar, the constitution and by-laws and list of officers submitted in the BLR, while attested to by the
chapter's president, were not certified under oath by the secretary. Does such defect warrant the withholding of
the status of legitimacy to the local or chapter?

In the case of union registration, the rationale for requiring that the submitted documents and papers be certified
under oath by the secretary or treasurer, as the case may be, and attested to by president is apparent. The
submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for
approval of the application for registration. Upon approval, the labor union acquires legal personality and is
entitled to all the rights and privileges granted by law to a legitimate labor organization. The employer naturally
needs assurance that the union it is dealing with is a bona fide organization, one which has not submitted false
statements or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements
will in a marked degree allay these apprehensions of management. Not only is the issuance of any false
statement and misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is
also a ground for a criminal charge of perjury.

The certification and attestation requirements are preventive measures against the commission of fraud. They
likewise afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous
or fly-by-night unions whose sole purpose is to control union funds or to use the union for dubious ends.

In the case of the union affiliation with a federation, the documentary requirements are found in Rule II, Section
3(e), Book V of the Implementing Rules, which we again quote as follows:

(c) The local chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or national
unions shall be observed.(Emphasis supplied)

Since the "procedure governing the reporting of independently registered unions" refers to the certification and
attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set
35
of officers and books of accounts submitted by the local and chapter must likewise comply with these
requirements. The same rationale for requiring the submission of duly subscribed documents upon union
registration exists in the case of union affiliation. Moreover, there is greater reason to exact compliance with the
certification and attestation requirements because, as previously mentioned, several requirements applicable to
independent union registration are no longer required in the case of formation of a local or chapter. The policy
of the law in conferring greater bargaining power upon labor unions must be balanced with the policy of
providing preventive measures against the commission of fraud.

A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to
the BLR:

1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and

2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by
its president.

Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor
organization.

In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documents under oath is
fatal to its acquisition of a legitimate status.

We observe that, as borne out by the facts in this case, the formation of a local or chapter becomes a handy tool
for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a
convenient device for a small group of employees to foist a not-so-desirable federation or union on
unsuspecting co-workers and pare the need for wholehearted voluntariness which is basic to free unionism. The
records show that on June 16, 1990, Kilusan met with several employees of the petitioner. Excerpts of the
"Minutes of the Organizational/General Membership Meeting of Progressive Development Employees Union
(PDEU) — Kilusan," are quoted below:

The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for
organization by explaining to the general membership the importance of joining the union. He
explained to the membership why they should join a union, and briefly explained the ideology of
the Pambansang Kilusan ng Paggawa-TUCP as a democratically based organization and then
read the proposed Constitution and By-Laws, after which said Constitution and By-Laws was
duly and unanimously ratified after some clarification.

Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the
COMELEC in holding the organizational election of officers of the union.

Bro. Jose Parungao, officially opened the table for nomination of candidates after which the
election of officers followed by secret balloting and the following were the duly elected officers.
(Original Record, p. 25)

The foregoing shows that Kilusan took the initiative and encouraged the formation of a union which
automatically became its chapter. On June 18, 1990, Kilusan issued a charter certificate in favor of PDEU-
KILUSAN (Records, page 1). It can be seen that Kilusan was moving very fast.

36
On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition for certification
election (Records, pages 2 and 3) accompanied by a copy each of the charter certificate, constitution and by-
laws and minutes of the organizational meeting. Had the local union filed an application for registration, the
petition for certification election could not have been immediately filed. The applicant union must firstly
comply with the "20% signature" requirement and all the other requisites enumerated in Article 234. Moreover,
since under Article 235 the BLR shall act on any application for registration within thirty (30) days from its
filing, the likelihood is remote that, assuming the union complied with all the requirements, the application
would be approved on the same day it was filed.

We are not saying that the scheme used by the respondents is per se illegal for precisely, the law allows such
strategy. It is not this Court's function to augment the requirements prescribed by law in order to make them
wiser or to allow greater protection to the workers and even their employer. Our only recourse is, as earlier
discussed, to exact strict compliance with what the law provides as requisites for local or chapter formation.

It may likewise be argued that it was Kilusan (the mother union) and not the local union which filed the petition
for certification election and, being a legitimate labor organization, Kilusan has the personality to file such
petition.

At this juncture, it is important to clarify the relationship between the mother union and the local union. In the
case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held
that the mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union
remained the basic unit of the association, free to serve the common interest of all its members subject only to
the restraints imposed by the constitution and by-laws of the association. Thus, where as in this case the petition
for certification election was filed by the federation which is merely an agent, the petition is deemed to be filed
by the chapter, the principal, which must be a legitimate labor organization. The chapter cannot merely rely on
the legitimate status of the mother union.

The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the
employees' bargaining agent in the petitioner's establishment. We are merely saying that the local union must
first comply with the statutory requirements in order to exercise this right. Big federations and national unions
of workers should take the lead in requiring their locals and chapters to faithfully comply with the law and the
rules instead of merely snapping union after union into their folds in a furious bid with rival federations to get
the most number of members.

WHEREFORE, the petition is GRANTED. The assailed resolution and orders of respondent Med-Arbiter and
Secretary of Labor and Employment, respectively, are hereby SET ASIDE. The temporary restraining order
dated February 25, 1991 is made permanent.

SO ORDERED.

37