Page | 1
PART III duly subscribed. Likewise, the petitioner claims
LABOR ORGANIZATION
Page 2 cases
20. 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. ;
G.R. No. 96425;
February 4, 1992
FACTS
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 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.
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. 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. PDC points out that the constitution
and by-laws and list of officers submitted were not
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.
ISSUE
WON PDEU-KILUSAN a legitimate labor
organization
HELD
NO. Ordinarily, a labor organization acquires
legitimacy only upon registration with the BLR;
under Article 234 (Requirements of Registration).
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.
Further, 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. It can be seen that Kilusan was
moving very fast.

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.
Other relevant issue: When does a branch,
local or affiliate of a federation become a
legitimate labor organization?
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.
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.
Page | 2
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.
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.
21. ADAMSON & ADAMSON, INC.,
petitioner, vs. THE COURT OF
INDUSTRIAL RELATIONS and
ADAMSON & ADAMSON
SUPERVISORY UNION (FFW),
respondents. G.R. No. L-35120 January
31, 1984
FACTS
The Adamson and Adamson, Inc. Supervisory
Union (FFW) informed the petitioner about its
having organized on the same date that the
Adamson and Adamson, Inc. Salesmen
Association (FFW) advised the petitioner that the
rank and file salesmen had formed their own
union.
Petitioner Adamson & Adamson Inc. questioned
the eligibility of the respondent union to represent
the former’s supervisory employees
notwithstanding the affiliation of the said union
with the same national federation with which the
unions of non-supervisors in the same company
are also affiliated.

The petitioner argues that the affiliation of the
respondent union of supervisors, the salesmen's
association, and the Adamson and Adamson
independent Workers Union of rank and file
personnel with the same national federation
(FFW) violates Section 3 of the Industrial Peace
Act, as amended, because — (1) it results in the
indirect affiliation Of supervisors and rank-and-file
employees with one labor organization; (2) since
respondent union and the unions of non-
supervisors in the same company are governed
by the same constitution and by-laws of the
national federation, in practical effect, there is but
one union; and (3) it would result in the
respondent union's losing its independence
because it becomes the alter ego of the
federation.
The respondents on the other hand argue that the
supervisory employees of an employer may
validly join an organization of the rank-and-file
employees so long as the said rank and file
employees are not under their supervision.
ISSUE
Whether or not a supervisor's union may affiliate
with a federation with which unions of rank and-
file employees of the same employer are also
affiliated.
RULING
NO. The confusion seems to have stemmed from
the prefix of FFW after the name of the local
unions in the registration of both. Nonetheless,
the inclusion of FWW in the registration is merely
to stress that they are its affiliates at the time of
registrations. It does not mean that said local
unions cannot stand on their own Neither can it
be construed that their personalities are so
merged with the mother federation that for one
difference or another they cannot pursue their
own ways, independently of the federation. This is
borne by the fact that FFW, like other federation is
a legitimate labor organization separate and
distinct from its locals and affiliates and to
construe the registration certificates of the
aforecited unions, along the line of the Company's
argument. would tie up any affiliates to the shoe
string of the federation.
The Adamson and Adamson Supervisory Union
and the Adamson and Adamson, Inc., Salesmen
Association (FFW), have their own respective
constitutions and by-laws. They are separately
and independently registered of each other. Both
sent their separate proposals for collective bar
agreements with their employer. There could be
no employer influence on rank-and-file
organizational activities nor therecould be any
rank and file influence on the supervisory function
Page | 3
of the supervisors because of the representation
sought to be proscribed.
22. MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA M. GREENFIELD
(MSMG-UWP) petitioners, v. HON.
CRESENCIO J. RAMOS, NATIONAL
LABOR RELATIONS COMMISSION, M.
GREENFIELD (B), INC., respondents.
G.R. No. 113907 February 28,
2000
FACTS
Malayang Samahan ng mga Manggagawa sa M.
Greenfield (MSMG),"local union", is an affiliate of
the United Lumber and General Workers of the
Philippines (ULGWP), "federation". Under the CBA
between MSMG and M. Greenfield, Inc., ;
Sec. 2. All employees who are covered by the
Agreement and presently members of the UNION
shall remain members of the UNION for the
duration of the Agreement as a condition
precedent to continued employment with the
COMPANY and
Sec. 4. Dismissal. Any such employee mentioned
in Section 2 hereof, who fails to maintain his
membership in the UNION for non-payment of
UNION dues, for resignation and for violation of
UNION's Constitution and By-Laws and any new
employee as defined in Section 2 of this Article
shall upon written notice of such failure to join or
to maintain membership in the UNION and upon
written recommendation to the COMPANY by the
UNION, be dismissed from the employment by the
COMPANY
A local union election was held under the action of
the federation. The defeated candidates filed a
petition for impeachment. The local union held
a general membership meeting.
Several union members failed to attend the
meeting. The local union requested the company
to deduct the union fines from the wage of
those union members who failed to attend the
general membership meeting. The Secretary
General of the federation disapproved the
resolution imposing the Php50 fine. The company
thensent a reply to petitioner’s request stating it
cannot deductfines without going against certain
laws. The imposition of the fine became the
subject of a bitter disagreement between the
Federation and the localunion culminating to the
latter’s declaration of general autonomy from the
former. The federation asked the company to stop
the remittance of thelocal union’s share in the
education funds. The company led a complaint
ofinterpleader with the DOLE.

The federation called a meeting placing thelocal
union under trusteeship and appointing an
administrator. The union officers received letters
from the administrator requiring them toexplain
why they should not be removed from the office
and expelled fromunion membership. The officers
were expelled from the federation. Thefederation
advised the company of the expulsion of the 30
union officersand demanded their separation
pursuant to the Union Security Clause inthe CBA.
The Federation filed a notice of strike with the
NCMB to compelthe company to effect the
immediate termination of the expelled
unionofficers. Under the pressure of a strike, the
company terminated the 30union officers from
employment. The petitioners filed a notice of
strike onthe grounds of discrimination;
interference; mass dismissal of unionofficers and
shop stewards; threats, coercion
and intimidation ; and union busting.
The union prayed for the suspension of the effects
of theirtermination. Secretary Drilon dismissed
the petition stating it was anintra-union matter.
Later, 78 union shop stewards were placed
underpreventive suspension. The union members
staged a walk-out andofficially declared a strike
that afternoon. The strike was attended
byviolence.
ISSUES
1.) WON they are illegally dismissed merely upon
the labor federation's demand for the
enforcement of the union security clause
embodied in their collective bargaining
agreement.
2.) WON the strike was illegal.
3.) WON there is abandonment of work.
RULING
1. YES. The charges the company proceeds
fromonemain issue which is the termination of
several employees upon the demand ofthe
federation pursuant to the union security clause.
Although the unionsecurity clause may be validly
enforced, such must comply withdue process. In
this case, the union officers were expelled
forallegedly committing acts of disloyalty to
the federation. The company didnot inquire into
the cause of the expulsion and merely relied upon
thefederation’s allegations. The issue is not a
purely intra-union matter as itwas later on
converted into a termination dispute when
the companydismissed the petitioners from work
without the benefit ofa separate notice and
hearing.
Although it started as an intra-union disputewithin
the exclusive jurisdiction of the BLR, to remand
the same to the BLRwould intolerably delay the
Page | 4
case and the Labor Arbiter could rule upon it.As to
the act of disaffiliation by the local union; it is
settled that a localunion has the right to
disaffiliate from its mother union in the absence
ofspecific provisions in the federation’s
constitution prohibiting such. Therewasno such
provision in federation ULGWP’s constitution.
2. NO. On the submission that the strike
was illegal for being grounded on a non-strikeable
issue, that is, the intra-union conflict between the
federation and the local union, it bears reiterating
that when the company dismissed the union
officers, the issue was transformed into a
termination dispute and brought respondent
company into the picture. MSMG believed in good
faith that in dismissing them upon request by the
federation, respondent company was guilty of
unfair labor practice in that it violated the
petitioner's right to self-organization. The strike
was staged to protest the company's act of
dismissing the union officers. Even if the
allegations of unfair labor practice are
subsequently found out to be untrue, the
presumption of legality of the strike prevails.
Another reason why the Labor Arbiter
declared the strike illegal is due to the
existence of a no strike no lockout provision in
the CBA. Again, such a ruling is erroneous. A
no strike, no lock out provision can only be
invoked when the strike is economic in
nature, i.e. to force wage or other concessions
from the employer which he is not required by
law to grant.
Such a provision cannot be used to assail the
legality of a strike which is grounded on unfair
labor practice, as was the honest belief of
herein petitioners. Again, whether or not
there was indeed unfair labor practice does
not affect the strike.
On the allegation of violence committed in the
course of the strike, it must be remembered that
the Labor Arbiter and the Commission found that
"the parties are agreed that there were violent
incidents . . . resulting to injuries to both sides,
the union and management."The evidence on
record show that the violence cannot be
attributed to the striking employees alone for the
company itself employed hired men to pacify the
strikers. With violence committed on both sides,
the management and the employees, such
violence cannot be a ground for declaring the
strike as illegal.
3. NO. Jurisprudence holds that for
abandonment of work to exist, it is
essential:

(1) that the employee must have failed to report
for work or must have been absent without valid
or justifiable reason; and
(2) that there must have been a clear intention to
sever the employer-employee relationship
manifested by some overt acts.
Deliberate and unjustified refusal on the part of
the employee to go back to his work post and
resume his employment must be established.
Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee
simply does not want to work anymore.And the
burden of proof to show that there was unjustified
refusal to go back to work rests on the employer.
In the present case, the company failed to prove
that there was a clear intention on the part of the
striking employees to sever their employer-
employee relationship. Although admittedly the
company sent three return to work notices to
them, it has not been substantially proven that
these notices were actually sent and received by
the employees. As a matter of fact, some
employees deny that they ever received such
notices. Others alleged that they were refused
entry to the company premises by the security
guards and were advised to secure a clearance
from ULGWP and to sign a waiver. Some
employees who responded to the notice were
allegedly told to wait for further notice from
respondent company as there was lack of work.
Furthermore, this Court has ruled that an
employee who took steps to protest his lay-off
cannot be said to have abandoned his work.The
filing of a complaint for illegal dismissal is
inconsistent with the allegation of abandonment.
In the case under consideration, the union
members did, in fact, file a complaint when they
were refused reinstatement by respondent
company.
23. TROPICAL HUT EMPLOYEES’ UNION-
CGW VS. TROPICAL HUT FOOD
MARKET INC.
FACTS
The rank-and-file employees of respondent
company Tropical Hut Food Market Inc. organized
a local union called Tropical Hit Employees Union
(THEU), the union south affiliation with the
National Association of Trade Unions (NATU). A
registration certificate was issued to by DOLE in
the name of THEU-NATU, however NATU itself as a
labor federation was not registered with the
DOLE. The THEU-NATU and Tropical Hut concluded
a CBA which contained that, the company
recognizes the Union as the sole and exclusive
collective bargaining agent for all its workers and
Page | 5
employees in all matters concerning labor
standards.
Sometime in 1973, the incumbent President of the
union Arturo Dilag was appointed as Assistant
Unit Manager; as a consequence, he resigned as
President of THEU-NATU and his vice president
Jose Encinas assumed his duties as president.
NATU received a letter from incumbent officers of
the local union that it was disaffiliating from the
NATU federation and its affiliation with the
Confederation of General Workers (CGW), 137
signatures appeared as having given their
consent. Now, THEU-CGW demanded from
respondent company the remittance of the union
dues but the company refused.
NATU requested the respondent company to
dismiss Encinas in view of his violation of Section
3 of Article III of CBA. The company suspended
Encinas pending application for clearance with the
DOLE ti dismiss him. Encinas filed ULP against the
respondent company. The company also
suspended the other officers and members of
THEU-CGW, the latter filed a individual complaint
for ULP.
The Labor Arbiter directed the holding of a
certification election among the rand-and file
workers of the respondent company between the
THEU-NATU and THEU-CGW, he also ordered the
reinstatement of all the complainants.
Respondents appealed the case to NLRC. NLRC
reversed the decision of Labor Arbiter and ruled
that the individual complainants are deemed to
have lost their status as employees of the
company. However, since the individual
complainants are presumed in good faith, the
respondent company was ordered to give them a
second chance by reemploying them upon their
voluntary reaffirmation of membership and loyalty
to the THEU-NATU.
ISSUES
1. WON the disaffiliation of the local union from
the national federation was valid. YES
2. WON the dismissal of petitioner employees
resulting from their union disaffiliation for the
mother federation was illegal and constituted ULP
on the part of the company and federation. YES
HELD
1. The right of a local union to disaffiliate from its
mother federation is well-settled. A local union,
being a separate and voluntary association, is free
to serve the interest of all its members including
the freedom to disaffiliate when circumstances
warrant. This right is consistent with the

constitutional guarantee of freedom of
association.
The inclusion of the word NATU after the name of
the local union THEU in the registration with the
DOLE is merely to stress that the THEU is NATU’s
affiliate at the time of the registration. It does not
mean that the local union cannot stand on its
own. A local union owes its creation and
continued existence to the will of its members and
not to the federation to which it belongs.
When the local union withdrew from the old
federation to join a new federation, it was merely
exercising its primary right to labor organization
for the effective enhancement and protection of
common interests. In the absence of enforceable
provisions in the federation’s constitution
preventing disaffiliation of a local union a local
may sever its relationship with its parent.
There is nothing in the constitution of NATU that
THEU was expressly forbidden to disaffiliate from
the federation. The alleged non-compliance of the
local union with the provisions in the NATU
constitution requiring the service of 3 months
notice of intention to withdraw did not produce
the effect of nullifying the disaffiliation for the
following grounds:
First – NATU was not even a LLO, it appearing that
it was not registered at that time with the DOLE,
thus, it has no legal personality to enforce its
constitution and laws and the right and privilege
under the LC to organize and affiliate locals.
Second – The act of non-compliance with the
procedure on withdrawal is premised on purely
technical grounds which cannot rise above the
fundamental right of self-organization.
2. Although, NATU was designated as the sole
bargaining agent in the check-off authorization
form attached to the CBA, this simply means it
was acting only for and in behalf of its affiliate.
The NATU possessed the status of an agent while
the local union remained the basic principal union
which entered into contract with the respondent
company. When the THEU disaffiliated from its
mother federation, the former did not lose its
legal personality as, the bargaining union under
the CBA.
The CBA imposes dismissal only in case an
employee is expelled from the union for joining
another federation or for forming another union or
who fails or refuses to maintain membership
therein. The case at bar does not involve the
withdrawal of merely some employees from the
union but of the whole THEU itself from its
federation. Since there is no violation of the union
security provision in the CBA, there was no
sufficient ground to terminate the employment of
petitioners.
Page | 6
The suspension or dismissal of the workers was
hastily and summarily done without the necessary
due process. The company sent a letter to
petitioner advising them of NATU’s
recommendation of their dismissal and at the
same time giving them 48 hours within which to
comment. When petitioners failed to do so, the
company immediately suspended them and
thereafter effected their dismissal.
24. VOLKSCHEL LABOR UNION - vs. -
BUREAU OF LABOR RELATIONS,
ASSOCIATED LABOR UNION FOR
METAL, WORKERS, DMG, INC.,
PEOPLE'S CAR, INC., KARBAYAN INC.,
and RTC TRADING, INC.
FACTS
1. Petitioner was once affiliated with the
Associated Labor Union for Metal Workers
(ALUMETAL). Both unions, using the name
Volkschel Labor Union Associated Labor Union for
Metal Workers, jointly entered into a collective
bargaining agreement with respondent
companies. One of the subjects dealt with is the
payment of union dues which is provided for in
Section 3, Article 1, of the CBA allowing check-off.
2. Later on, a majority of petitioner's members
decided to disaffiliate from respondent federation
in order to operate on its own as an independent
labor group pursuant to Article 241 (formerly
Article 240) of the Labor Code of the Philippines.
Accordingly, a resolution was adopted and signed
by petitioner's members revoking their check-off
authorization in favor of ALUMETAL and notices
thereof were served on ALUMETAL and respondent
companies.
3. Confronted with the predicament of whether or
not to continue deducting from employees' wages
and remitting union dues to respondent,
respondent companies sought the legal opinion of
the respondent Bureau as regards the controversy
between the two unions. The Med-Arbiter of
respondent Bureau rendered a Resolution which in
effect found the disaffiliation legal but at the
same time gave the opinion that, petitioner's
members should continue paying their dues to
ALUMETAL in the concept of agency fees.
4. From the said Resolution, of the Med-Arbiter
both petitioner and respondent ALUMETAL
appealed to the Director of respondent Bureau.
Petitioner' contended that the Med-Arbiter's
opinion to the effect that petitioner's members
remained obligated to pay dues to respondent
ALUMETAL was inconsistent with the dispositive
finding that petitioner's disaffiliation from
ALUMETAL was valid. ALUMETAL, on the other
hand, assailed the Resolution in question
 Page | 7

asserting that the disaffiliation should have been employees is terminated by the disaffiliation of
declared contrary to law. the local of which the employees are members.
Respondent companies therefore were wrong in
ISSUE continuing the check-off in favor of respondent
federation since they were duly notified of the
1. Is petitioner union's disaffiliation from disaffiliation and of petitioner's members having
respondent federation valid? already rescinded their check-off authorization.

2. Do respondent companies have the right to 3. NO. Suffice it to state that respondent
effect union dues collections despite revocation federation is not entitled to union dues payments
by the employees of the check-off authorization? from petitioner's members. "A local union which
has validly withdrawn from its affiliation with the
3. Is respondent federation entitled to union dues parent association and which continues to
payments from petitioner union's members represent the employees of an employer is
notwithstanding their disaffiliation from said entitled to the check-off dues under a collective
federation? bargaining contract." In this case, ALUMETAL is
ordered to return to petitioner union all the union
RULING
dues enforced and collected.
1. YES. The right of a local union to disaffiliate
25. LIBERTY COTTON MILLS WORKERS
from its mother union is well-settled. In previous
UNION, RAFAEL NEPOMUCENO,
cases, it has been repeatedly held that a local
MARIANO CASTILLO, NELLY
union, being a separate and voluntary association,
ACEVEDO, RIZALINO CASTILLO and
is free to serve the interest of all its members
RAFAEL COMBALICER, petitioners, v.
including the freedom to disaffiliate when
LIBERTY COTTON MILLS, INC.,
circumstances warrant. This right is consistent
PHILIPPINE ASSOCIATION OF FREE
with the Constitutional guarantee of freedom of
LABOR UNION (PAFLU) and the
association. In the implementation and
COURT OF INDUSTRIAL RELATIONS,
interpretation of the provisions of the Labor Code
respondents. G.R. No. L-33987
and its implementing regulations, the
September 4, 1975
workingman's welfare should be the primordial
and paramount consideration. In the case at bar, FACTS
it would go against the spirit of the labor law to The Liberty Cotton Mills Workers Union adopted its
restrict petitioner's right to self-organization due Constitution and By-laws on January 1, 1959. 1
to the existence of the CBA. We agree with the Among other things, the said Constitution
Med-Arbiter's opinion that "A disaffiliation does provided:
not disturb the enforceability and administration
of a collective agreement; it does not occasion a ARTICLE X — UNION AFFILIATION
change of administrators of the contract nor even
an amendment of the provisions thereof." But Section 1. The Liberty Cotton Mills Workers
nowhere in the record does it appear that the Union-Paflu shall be affiliated with the Philippine
contract entered into by the petitioner and Association of Free Labor Unions, otherwise known
ALUMETAL prohibits the withdrawal of the former as PAFLU, and shall remain an affiliate as long as
from the latter. ten or more of its members evidence their desire
to continue the said local union's affiliation, in
2. NO. Under Section 3, Article I, of the CBA, the
accordance with the Paflu Constitution
obligation of the respondent companies to deduct
and remit dues to ALUMETAL is conditioned on the
On October 1, 1959, a Collective
individual check-off authorization of petitioner's
Bargaining Agreement was entered into by and
members, In other words, ALUMETAL is entitled to
between the Company and the Union represented
receive the dues from respondent companies as
by PAFLU. Said Agreement contained these clear
long as petitioner union is affiliated with it and
and unequivocal provisions:
respondent companies are authorized by their
employees (members of petitioner union) to
I. UNION RECOGNITION
deduct union dues. Without said affiliation, the
employer has no link to the mother union. The
The COMPANY recognizes the UNION as the sole
obligation of an employee to pay union dues is
bargaining agent for all of its employees, other
coterminous with his affiliation or membership.
than supervisors …
"The employees' check-off authorization, even if
declared irrevocable, is good only as long as they
III. UNION SECURITY
remain members of the union concerned." A
contract between an employer and the parent
organization as bargaining agent for the

All employees who, at the time of the signing of
this Agreement are members of the UNION, or
who, at any time during the affectivity of this
Agreement, may join the UNION, shall as a
condition for continued employment, remain
members of the UNION while this agreement
remains in force; any employee, who, at any time
during the life of this agreement shall resign from
the UNION or be expelled, therefrom in
accordance with its Constitution and By-Laws for
non-payment of union dues or other duly
approved union assessments or for disloyalty to
the UNION shall be dismissed from
employment by the COMPANY upon request
in writing by the UNION which shall hold the
COMPANY free from any liability arising from
or caused by such dismissal.
On March 13, 1964, while the Collective
Bargaining Agreement was in full force, Marciano
Castillo and Rafael Nepomuceno, President and
Vice-President, respectively, of the local union,
wrote PAFLU, its mother federation, complaining
about the legal counsel assigned by the PAFLU to
assist them in a ULP case they filed against the
Company. In said letter, the local union expressed
its dissatisfaction and loss of confidence in the
PAFLU lawyers, claiming that PAFLU never lifted a
finger regarding this particular complaint.
On May 17, 1964, thirty two (32) out of the 36
members of the local union disaffiliated
themselves from respondent PAFLU pursuant to
their local union's Constitution and By-Laws,
specifically Article X thereof,
May 29,1964, PAFLU wrote the Company this time
quoting en toto Article III of the Collective
Bargaining Agreement on "Union Security" and
requesting the termination of the employment of
all petitioners herein in view of the disloyalty
shown by those them and expelled from their'
union membership in the mother federation for
allegedly "instigating union disaffiliation.".
On May 30,1964, the Company terminated the
employment of the members expelled by the
PAFLU. On the last day of May, 1964, counsel for
the ousted workers wrote the Company
requesting their reinstatement. This was denied
by the Company; hence the complaint for unfair
labor practice filed with the Court of Industrial
Relations.
ISSUE
WON the disaffiliation of the ees is valid hence,
the dismissal of the herein petitioners, was not
justified
RULING
YES. Under the provision in the Unions'
Constitution and By-Laws, which states:
Page | 8
That the Liberty Cotton Mills Workers Union-PAFLU
shall be affiliated with the PAFLU, and shall remain
an affiliate as long as ten (10) or more of its
members evidence their desire to continue the
said local unions affiliation.
Record shows that only four (4) out of its
members remained for 32 out of the 36 members
of the Union signed the resolution of disaffiliation
on May 17, 1964, triggered by the alleged
negligence of PAFLU in attending to the needs of
its local union, particularly its failure to assign a
conscientious lawyer to the local to attend to the
ULP case they filed against the Company. Thus,
the disaffiliation was valid under the local's
Constitution and By-Laws which, taken together
with the Collective Bargaining Agreement. The CIR
likewise held in its decision that the act of
disaffiliation did not have any effect as the
workers retracted from such act. Since not all
signatories to the resolution of disaffiliation dated
May 17, 1964, took part in the retraction. Only a
number of employees, 16 to be exact, retracted.
Also, the retraction is dated June 3, 1964, or four
days after the petitioners herein had been
dismissed. There is no use in saying that the
retraction obliterated the act of disaffiliation when
they were already out of the service when it was
done. The disaffiliation, coming as it did from the
greater majority of its members, is more than
enough to show the collective desire of the
members of the Liberty Cotton Mills Workers
Union to sever their relations from the mother
federation. The right of disaffiliation is inherent in
the compact and such act should not have been
branded as an act of disloyalty, especially
considering the cause which impelled the union to
take such a step.
26. DOLORES VILLAR, ROMEO PEQUITO,
DIONISIO RAMOS, BENIGNO
MAMARALDO, ORLANDO ACOSTA,
RECITACION BERNUS, ANSELMA
ANDAN, ROLANDO DE GUZMAN and
RITA LLAGAS, petitioners, vs. THE
HON. AMADO G. INCIONG, as Deputy
Minister of the Ministry of Labor,
AMIGO MANUFACTURING
INCORPORATED and PHILIPPINE
ASSOCIATION OF FREE LABOR
UNIONS (PAFLU), respondents.
FACTS
Petitioners were members of the Amigo
Employees Union-PAFLU, a duly registered labor
organization which, at the time of the present
dispute, was the existing bargaining agent of the
employees in private respondent Amigo
Manufacturing, Inc. (Company). The Company and
the Amigo Employees Union-PAFLU had a

collective bargaining agreement governing their
labor relations, which agreement was then about
to expire on February 28, 1977. On January 5,
1977, upon written authority of at least 30% of
the employees in the company, including the
petitioners, the Federation of Unions of Rizal (FUR)
filed a petition for certification election with the
Med-Arbiter's Office, Regional Office No. 4 of the
Ministry of Labor and Employment. The petition
was, however, opposed by the Philippine
Association of Free Labor Unions (PAFLU) with
whom, as stated earlier, the Amigo Employees
Union was at that time affiliated. PAFLU's
opposition cited the "Code of Ethics" governing
inter-federation disputes among and between
members of the TUCP. Consequently, the
MedArbiter indorsed the case to TUCP for
appropriate action but before any such action
could be taken thereon, the petitioners
disauthorized FUR from continuing the petition for
certification election for which reason FUR
withdrew the petition. On February 7, 1977, the
same employees who had signed the petition filed
by FUR signed a joint resolution and thereafter
petitioner Villar, representing herself to be the
authorized representative of the Amigo
Employees Union, filed a petition for certification
election in the Company before Regional Office
No. 4, with the Amigo Employees Union as the
petitioner. PAFLU sent a letter to the Company
demanding to terminate the employment of the
petitioners pursuant to the security clause of the
CBA, with a statement absolving the Company
from any liability or damage that may arise from
petitioner's termination. The Company filed the
request for clearance to terminate the petitioners
before the Department of Labor which was
granted, terminating the employment of Villaret.
al.
ISSUE
The main thrust of the petition is the alleged
illegality of the dismiss of the petitioners by
private respondent Company upon demand of
PAFLU which invoked the security clause of the
collective bargaining agreement between the
Company and the local union, Amigo Employees
Union-PAFLU.
RULING
This Court has laid down the ruling that a closed
shop is a valid form of union security, and such
provision in a collective bargaining agreement is
not a restriction of the right of freedom of
association guaranteed by the Constitution. In the
case at bar, it appears as an undisputed fact that
on February 15, 1977, the Company and the
Amigo Employees Union-PAFLU entered into a
Collective Bargaining Agreement with a union
security clause provided for in Article XII thereof
Page | 9
which is a reiteration of the same clause in the old
CBA. The quoted stipulation for closed-shop is
clear and unequivocal and it leaves no room for
doubt that the employer is bound, under the
collective bargaining agreement, to dismiss the
employees, herein petitioners, for non- union
membership. Petitioners became non-union
members upon their expulsion from the general
membership of the Amigo Employees Union-
PAFLU on March 15, 1977 pursuant to the Decision
of the PAFLU national president. Petitioners insist
that their disaffiliation from PAFLU and filing a
petition for certification election are not acts of
disloyalty but an exercise of their right to self-
organization. They contend that these acts were
done within the 60-day freedom period when
questions of representation may freely be raised.
Under the peculiar facts of the case, We find
petitioners' insistence untenable. In the first
place, had petitioners merely disaffiliated from
the. Amigo Employees Union-PAFLU, there could
be no legal objections thereto for it was their right
to do so. But what petitioners did by the very
clear terms of their "Sama-SamangKapasiyahan"
was to disaffiliate the Amigo Employees Union-
PAFLU from PAFLU, an act which they could not
have done with any effective consequence
because they constituted the minority in the
Amigo Employees Union-PAFLU. Extant from the
records is the fact that petitioners numbering 10,
were among the 96 who signed the
"SamaSamangKapasiyahan" whereas there are
234 union members in the Amigo Employees
Union-PAFLU. Hence, petitioners constituted a
small minority for which reason they could not
have successfully disaffiliated the local union from
PAFLU. Since only 96 wanted disaffiliation, it can
be inferred that the majority wanted the union to
remain an affiliate of PAFLU and this is not denied
or disputed by petitioners. The action of the
majority must, therefore, prevail over that of the
minority members. Moreover, the Amigo
Employees Union, as an independent union, is not
duly registered as such with the Bureau of Labor
Relations. The appealed decision of OIC Leogardo
of Regional Office No. 4 states as a fact that there
is no record in the Bureau of Labor Relations that
the Amigo Employees Union (Independent) is
registered, and this is not disputed by petitioners,
notwithstanding their allegation that the Amigo
Employees Union is a duly registered labor
organization bearing Ministry of Labor Registration
Certification No. 5290-IP dated March 27, 1967.
But the independent union organized after the
"SamaSamangKapasiyahan" executed February 7,
1977 could not have been registered earlier,
much less March 27, 1967 under Registration
Certificate No. 5290-IP. As such unregistered
union, it acquires no legal personality and is not
entitled to the rights and privileges granted by
law to legitimate labor organizations upon
issuance of the certificate of registration. Simply

put, the Amigo Employees Union (Independent)
Which petitioners claim to represent, not being a
legitimate labor organization, may not validly
present representation issues. Therefore, the act
of petitioners cannot be considered a legitimate
exercise of their right to self-organization.
27. ASSOCIATED WORKERS UNION-
PTGWO vs. THE NATIONAL LABOR
RELATIONS COMMISION (EN BANC);
G.R. No. 87266-69; July 30,
1990
FACTS
On 26 October 1984, petitioner Associated
Workers Union ("AWU")—PTGWO, the then
bargaining representative of the dockworkers at
South Harbor, Port Area, Manila, filed a Notice of
Strike against respondent Metro Port Service, Inc.
("Metro"), the then arrastre contractor in the
South Harbor, on the issues, among others, of
unfilled vacancies and union busting.
On 3 April 1985, the abovementioned case was
certified in an Order by the then Minister of Labor
and Employment to the NLRC for compulsory
arbitration; the Order also forbade the holding of
strikes or lock-outs. One of the demands raised by
AWU was that Metro terminate the employment of
respondents Adriano Yumul and ten (10) others
(individual respondents), for having organized, on
26 October 1984, the Associated Workers Union in
Metroport ("AWUM") among the rank-and-file
employees of Metro, ostensibly as a local or
chapter of AWU. AWU had earlier expelled
individual respondents from membership in AUW
for disloyalty and, pursuant to the closed-shop
provision of the existing AWU-Metro collective
bargaining agreement ("CBA"), sought the
termination of their employment.
Metro initially resisted AWU's request to terminate
the employment of individual respondents,
contending that the termination would be
premature as individual respondents had not been
afforded due process, and that the termination
would be violative of the status quo agreement in
NLRC.
Metro, however, eventually relented and
suspended individual respondents after AWU,
despite the express prohibition in the Order dated
3 April 1985, staged a strike against it.
ISSUE
WON the disaffiliated members of AWU who
formed AWUM are still protected under the CBA
RULING
Page | 10
NO. While it is true that AWUM as a local union,
being an entity separate and distinct from AWU, is
free to serve the interest of all its members and
enjoys the freedom to disaffiliate, such right to
disaffiliate may be exercised, and is thus
considered a protected labor activity, only when
warranted by circumstances. Generally, a labor
union may disaffiliate from the mother union to
form a local or independent union only during the
60-day freedom period immediately preceding the
expiration of the CBA. 6 Even before the onset of
the freedom period (and despite the closed-shop
provision in the CBA between the mother union
and management) disaffiliation may still be
carried out, but such disaffiliation must be
effected by a majority of the members in the
bargaining unit.
This happens when there is a substantial shift in
allegiance on the part of the majority of the
members of the union. In such a case, however,
the CBA continues to bind the members of the
new or disaffiliated and independent union up to
the CBA's expiration date.
APPLICATION: The record does not show that
individual respondents had disaffiliated during the
freedom period. The record does, however, show
that only eleven (11) members of AWU (individual
respondents) had decided to disaffiliate from AWU
and form AWUM. Respondent Metro had about
4,000 employees, and around 2,000 of these were
members of AWU 9 It is evident that individual
respondents had failed to muster the necessary
majority in order to justify their disaffiliation. (In
fact, it was only on 5 December 1985 that
individual respondents were finally able to
register an independent union called Metroport
Workers Union [MWU]. 10 Even then, in the
absence of allegation by AWUM [MWU] of the
exact number of its members, the Court presumes
that only twenty percent [20%] of the employees
of Metro had joined MWU). Thus, in the
referendum held on 7 January 1985 at the PTGWO
compound (where representatives of the Ministry
of Labor and Employment were present) to
determine whether individual respondents should
be expelled from AWU, 1,229 members (out of
1,695 members present) voted for expulsion of
individual respondents.
The individual respondents here have failed to
present proof of their allegation that the 1,695
members of AWU were not employees of
respondent Metro alone; the Court therefore
presumes that those who voted for their expulsion
were bona fide employees of respondent Metro.
Moreover, individual respondents failed to allege
that their expulsion for disloyalty violated AWU's
constitution and by-laws. In sum, the attempted
disaffiliation of the eleven (11) private
respondents from the petitioner mother union and

the effort to organize either a new local of the
mother union or an entirely new and separate
union, did not, under the circumstances of this
case, constitute protected activities of the eleven
(11) individual respondents.
28. ELISCO-ELIROL LABOR UNION
(NAFLU) and its OFFICERS AND
MEMBERS OF THE BOARD OF
DIRECTORS, petitioners vs. CARMELO
NORIEL, in his capacity as Director of
the Bureau of Labor Relations,
ELIZALDE STEEL CONSOLIDATED,
INC. and NATIONAL FEDERATION OF
LABOR UNIONS (NAFLU),
respondents. G.R. No. L-41955
December 29, 1977
FACTS
Sometime on February 1974, petitioner-
EliscoElirolLabor Union (NAFLU), negotiated and
executed a collective bargaining agreement with
respondent-Elizalde Steel Consolidated, Inc.
On March 3, 1975, the member of petitioner-
appellant union in a general membership meeting
decided in a resolution to register their union to
protect and preserve the integrity and inviolability
of the collective bargaining agreement between
the Elisco-ElirolLabor Union (NAFLU) and the
Elizalde Steel Consolidated, Inc.
With the issuance of the certificate of registration
petitioner-appellant acquired a personality
separate and distinct from any other labor union
and steps were taken by petitioner-appellant to
enforce the collective bargaining agreement as
the principal party to the same representing the
workers covered by such agreement immediately
after the issuance of the certificate of registration.
On June 11, 1975, petitioner, acting through its
President HilarioRiza informed respondents of said
disaffiliation by means of a letter, and
subsequently requested respondents to recognize
petitioner as the sole and exclusive bargaining
representative of the employees thereof since the
mother union can no longer safeguard the rights
of its members insofar as working conditions and
other terms of employment are concerned.
Respondent Elizalde Steel without any justifiable
reason refused and continues to refuse to
recognize petitioner as the sole and exclusive
bargaining representative of its employees, and,
now actually dismissed the petitioner union's
officers and board members.
Page | 11
A complaint for unfair labor practice was filed by
petitioners against respondents for the latter's
refusal to bargain collectively with petitioner
ISSUE
WON the petitioner union can be recognized as
the sole and exclusive bargaining representatives
of the employees and to administer the collective
bargaining agreement.
RULING
YES. To grant to the former mother union (NAFLU)
the authority to administer and enforce their
collective bargaining agreement without
presumably any members in the bargaining unit is
quite absurd.When the employees disaffiliated
from the mother union and formed themselves
into a new union, does not terminate their status
as employees.
The employees and members of the local union
did not form a new union but merely registered
the local union as was their right. Petitioner
Elisco-ElirolLabor Union-NAFLU, consisting of
employees and members of the local union was
the principal party to the agreement.NAFLU as the
"mother union" in participation in the execution of
the bargaining agreement with respondent
company acted merely as agent of the local
union, which remained the basic unit of the
association existing principally and freely to serve
the common interest of all its members, including
the freedom to disaffiliated when the
circumstances so warranted
The "substitutionary" doctrine likewise fully
supports petitioner's stand. Petitioner union to
whom the employees owe their allegiance has
from the beginning expressly avowed that it "does
not intend to change and/or amend the provisions
of the present collective bargaining agreement
but only to be given the chance to enforce the
same since there is a shift of allegiance in the
majority of the employees at respondent
company.
29. THE HERITAGE HOTEL MANILA, acting
through its owner, GRAND PLAZA
HOTEL CORPORATION,Petitioner,-
versus -NATIONAL UNION OF
WORKERS IN THE HOTEL,
RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL
MANILA SUPERVISORS CHAPTER
(NUWHRAIN-HHMSC),Respondent.
FACTS
National Union filed a petition for certification
election which was granted by the Med-Arbiter
and ordered the holding of a certification election.

The corporation filed a motion for reconsideration,
but it was denied.
Subsequently, the corporation discovered that
the national union had failed to submit to the BLR
its annual financial report for several years and
the list of its members since it filed its registration
papers in 1995. Consequently, the corporation
filed a Petition for Cancellation of Registration of
respondent, on the ground of the non-submission
of the said documents. The corporation prayed
that the union’s Certificate of Creation of
Local/Chapter be cancelled and its name be
deleted from the list of legitimate labor
organizations. It further requested the suspension
of the certification election proceedings.
The corporation reiterated its request by filing a
Motion to Dismiss or Suspend the Certification
Election arguing that the dismissal or suspension
of the proceedings is warranted, considering that
the legitimacy of respondent is seriously being
challenged in the petition for cancellation of
registration. The corporation maintained that the
resolution of the issue of whether the union is a
legitimate labor organization is crucial to the issue
of whether it may exercise rights of a legitimate
labor organization, which include the right to be
certified as the bargaining agent of the covered
employees.
Nevertheless, the certification election pushed
through and the union emerged as the winner.
The corporation filed a Protest with Motion to
Defer Certification of Election Results and Winner,
[7]
stating that the certification election was an
exercise in futility because, once respondents
registration is cancelled, it would no longer be
entitled to be certified as the exclusive bargaining
agent of the supervisory employees. The
corporation also claimed that some of the union’s
members were not qualified to join the union
because they were either confidential employees
or managerial employees.
It then prayed that the certification of the election
results and winner be deferred until the petition
for cancellation shall have been resolved, and that
the union’s members who held confidential or
managerial positions be excluded from the
supervisors bargaining unit.
The union averred that the petition was filed
primarily to delay the conduct of the certification
election, the union’s certification as the exclusive
bargaining representative of the supervisory
employees, and the commencement of bargaining
negotiations.
The union prayed for the dismissal of the petition
for the following reasons: (a) The corporation is
estopped from questioning respondents status as
Page | 12
a legitimate labor organization as it had already
recognized respondent as such during the
preelection conferences;
(b) The corporation is not the party-in-interest, as
the union members are the ones who would be
disadvantaged by the non-submission of financial
reports;
(c) it has already complied with the reportorial
requirements, having submitted its financial
statements for 1996, 1997, 1998, and 1999, its
updated list of officers, and its list of members for
the years 1995, 1996, 1997, 1998, and 1999;
(d) the petition is already moot and academic,
considering that the certification election had
already been held, and the members had
manifested their will to be represented by
respondent.
ISSUE
WON the failure to comply with the statutory
requirements (filing financial reports and the lost
of its members) sufficient ground for the
cancellation of registration of the respondent as a
labor union.
RULING
ART. 239. GROUNDS FOR CANCELLATION OF
UNION REGISTRATION.
The following shall constitute grounds for
cancellation of union registration:
(d) Failure to submit the annual financial report to
the Bureau within thirty (30) days after the closing
of every fiscal year and misrepresentation, false
entries or fraud in the preparation of the financial
report itself;
(i) Failure to submit list of individual members to
the Bureau once a year or whenever required by
the Bureau.
These provisions give the Regional Director
ample discretion in dealing with a petition for
cancellation of a unions registration, particularly,
determining whether the union still meets the
requirements prescribed by law. It is sufficient to
give the Regional Director license to treat the late
filing of required documents as sufficient
compliance with the requirements of the law. After
all, the law requires the labor organization to
submit the annual financial report and list of
members in order to verify if it is still viable and
financially sustainable as an organization so as to
protect the employer and employees from
fraudulent or fly-by-night unions. With the

submission of the required documents by
respondent, the purpose of the law has been
achieved, though belatedly.
We cannot ascribe abuse of discretion to the
Regional Director and the DOLE Secretary in
denying the petition for cancellation of
respondents registration. The union members
and, in fact, all the employees belonging to the
appropriate bargaining unit should not be
deprived of a bargaining agent, merely because of
the negligence of the union officers who were
responsible for the submission of the documents
to the BLR.
Labor authorities should, indeed, act with
circumspection in treating petitions for
cancellation of union registration, lest they be
accused of interfering with union activities. In
resolving the petition, consideration must be
taken of the fundamental rights guaranteed by
Article XIII, Section 3 of the Constitution, i.e., the
rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful
concerted activities. Labor authorities should bear
in mind that registration confers upon a union the
status of legitimacy and the concomitant right
and privileges granted by law to a legitimate labor
organization, particularly the right to participate
in or ask for certification election in a bargaining
unit.Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out
the life of a labor organization. For without such
registration, it loses - as a rule - its rights under
the Labor Code.
Furthermore, that the Labor Code’s provisions on
cancellation of union registration and on reportori
al requirements have been recently amended by
Republic Act (R.A.) No. 9481, An Act Strengthenin
g the Workers’ Constitutional Right to Self-
Organization, Amending for the Purpose Presidenti
al Decree No. 442, As Amended, Otherwise Known
as the Labor Code of the Philippines, which says t
hat failure to file financial reports and list of union
members shall not be a ground for cancellation of
union registration but shall subject the erring offic
ers or members to suspension, expulsion from me
mbership, or any appropriate penalty.
Moreover, submission of the required documents
is the duty of the officers of the union. It would be
unreasonable for this Office to order the
cancellation of the union and penalize the entire
union membership on the basis of the negligence
of its officers. In National Union of Bank
Employees vs. Minister of Labor, L-53406, 14
December 1981, 110 SCRA 296, the Supreme
Court ruled:
Page | 13
As aptly ruled by respondent Bureau of Labor
Relations Director Noriel: The rights of workers to
self-organization finds general and specific
constitutional guarantees. x x x Such
constitutional guarantees should not be lightly
taken much less nullified. A healthy respect for
the freedom of association demands that acts
imputable to officers or members be not easily
visited with capital punishments against the
association itself.
At any rate, we note that on 19 May 2000, the
union had submitted its financial statement for
the years 1996-1999. With this submission, the
union has substantially complied with its duty to
submit its financial report for the said period. To
rule differently would be to preclude the union,
after having failed to meet its periodic obligations
promptly, from taking appropriate measures to
correct its omissions. For the record, we do not
view with favor the union’s late submission.
Punctuality on the part of the union and its
officers could have prevented this petition.
30. NATIONAL UNION OF BANK
EMPLOYEES (NUBE) VS. PHILNABANK
EMPLOYEES ASSOCIATION (PEMA)
AND PNB
FACTS
The rank-and-file employees of PNB were
represented for collective negotiation by the
PEMA, a public sector union. PEMA affiliated with
petitioner NUBE which is a labor federation
composed of unions in the banking industry,
adopting the name NUBE-PNB Employees Chapter
(NUBE-PEC).
NUBE-PEC was certified as the sole and exclusive
bargaining agent of PNB employees. A CBA was
subsequently signed between NUBE-PEC and PNB.
Pursuant to the CBA, the PNB shall deduct the
monthly membership fee and other assessments
imposed by the union from the salary of each
union member and agency fee from the rank-and-
file employees within the bargaining unit who are
not union members. The PNB shall directly credit
the amount to NUBE’s current account with PNB.
PEMA-FFW filed for certification election among
the rank-and-file employees of PNB, while the
petition was still pending, 2 significant events
transpire: NUBE-PEC was registered as
independent union and its disaffiliation with
NUBE.
PEMA sent a letter to PNB informing its
disaffiliation from NUBE and requesting to stop
effective immediately the check-off of the
monthly dues for NUBE.
 Page | 14

NUBE alleged that the chapter officers have
abandoned NUBE-PEC and joined another union,
they abdicated their respective positions and
resigned as such, in joining another union, the
chapter officers committed an act of disloyalty to
NUBE-PEC and the general membership; the
circumstances show that there is an emergency in
NUBE-PEC necessitating its placement under
temporary trusteeship and that PNB should cease
and desist from dealing with the chapter officers.
PNB disregarded NUBE’s response. Alleging ULP,
NUBE brought the matter to NCMB for preventive
mediation. PEMA filed a motion for Intervention.
The DOLE Acting Secretary denied PEMA’s motion
and ordered PNB to release all union dues
withheld and to continue remitting the same to
NUBE. It ruled that no effective disaffiliation took
place since only a minority of its members wanted
disaffiliation.
PEMA elevated the case to CA. CA ruled that
PEMA’s disaffiliation from NUBE wad valid since
the power and freedom of local unions to
disaffiliate from its mother federation is
axiomatic, without any restrictive covenant
between the parties, the local union can
disaffiliate from the federation any time.
PEMA’s disaffiliation from NUBE was valid.
First, non-compliance with the procedure on
disaffiliation being premised on purely technical
grounds cannot rise above the employees’
fundamental right to self-organization and to form
and join labor organizations of their own choosing
for the purpose of collective bargaining.
Second, the Article nonetheless provides that
when the nature of the organization renders such
secret ballot impractical, the union officers may
make the decision in behalf of the general
membership. NUBE did not even dare to contest
PEMA’s representation that PNB employees from
where PEMA derives its membership are scattered
from Aparri to Jolo, manning more than 300
branches in various town and cities of the country.
It is understandable therefore why PEMA’s board
of directors merely opted to submit for ratification
of the majority their resolution to disaffiliate from
NUBE.
Third, NUBE did not dispute the existence of the
persons or their due execution of the document
showing their unequivocal support for the
disaffiliation of PEMA from NUBE. While fully
displaying the employees printed name,
identification number, branch, position and
signatures, the lost was left unchallenged by
NUBE.

ISSUE In effect, NUBE loses its right to collect all union

des held in its trust by PNB. The moment PEMA
WON PEMA validly disaffiliated itself from NUBE. separated from and left NUBE and exists as an
YES independent labor organization with a certificate
registration, the former is no longer obliged to pay
RULING dues and assessments to the latter.

A local union which has affiliated itself with a

federation is free to sever such affiliation anytime
and such disaffiliation cannot be considered
disloyalty. In the absence of specific provisions in
the federation’s constitution prohibiting
disaffiliation or the declaration of autonomy of a
local union, a local may disassociate with its
parent union.

Local unions do not owe their creation and

existence to the national federation to which they
are affiliated but instead to the will of their
members. The sole essence of affiliation is to
increase by collective action, the common
bargaining power of local unions for the effective
enhancement and protection of their interests.
Under the rules implementing the LC, a chartered
local union acquires legal personality through the
charter certificate issued by a duly registered
federation or national union, and reported to the
Regional Office. A local union does not owe its
existence to the federation with which it is
affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its
members.