B.
Labor Organizations
1. Policy
Articles 218(A)(b); (c); (d); and (g), Labor Code.
A) To promote and emphasize the primacy of free collective bargaining and negotiations,
including voluntary arbitration, mediation and conciliation, as modes of settling labor or
industrial disputes;
B) To promote free trade unionism as an instrument for the enhancement of democracy
and the promotion of social justice and development;
C) To foster the free and voluntary organization of a strong and united labor movement;
D) To promote the enlightenment of workers concerning their rights and obligations as
union members and as employees;
E) (G) To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
2. Definition
Article 219(g), Labor Code.
G. "Labor organization" means any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment.
3. Categories
Articles 219(g); (h); (i); and (j), Labor Code.
G. "Labor organization" means any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment.
H. "Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.
I. "Company union" means any labor organization whose formation, function or administration
has been assisted by any act defined as unfair labor practice by this Code.
Samahan ng Manggagawa sa Hanjin Shipyard v. Bureau of Labor Relations, G.R. No.
211145, October 14, 2015.
FACTS:
● Samahan, through its authorized representative, Alfie F. Alipio, filed an application for
registration of its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with the
DOLE. With a total of 120 members.
● DOLE issued the corresponding certificate of registration.
● Then respondent Hanjin Heavy Industries (Hanjin), filed a petition with DOLE praying
for the cancellation of registration of Samahan's association on the ground that its
members did not fall under any of the types of workers enumerated in the second
sentence of Article 243 (now 249).
● Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed,
and those without definite employers may form a workers' association.
● It further posited that one third (1/3) of the members of the association had definite
employers and the continued existence and registration of the association would
prejudice the company's goodwill.
● Hanjin filed a supplemental petition, adding the alternative ground that Samahan
committed a misrepresentation in connection with the list of members and/or voters
who took part in the ratification of their constitution and by-laws in its application for
registration. Hanjin claimed that Samahan made it appear that its members were all
qualified to become members of the workers' association.
● DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-day
period to file a responsive pleading. No pleading, however, was submitted. Instead,
Samahan filed a motion to dismiss on April 14, 2010.
● DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin
● Samahan failed to adduce evidence that the remaining 63 members were also
employees of Hanjin
● Bureau of Labor Relations ruled in favour of Samahan
● In the MR of Hanjin decision is affirmed but with a DIRECTIVE for SAMAHAN to
remove "HANJIN SHIPYARD" from its name.
● CA rendered its decision that Samahan as a legitimate workers' association was
contrary to the provisions of Article 243 of the Labor Code. It stressed that only 57 out
of the 120 members were actually working in Hanjin.
● In the preamble of Samahan's Constitution and By-laws, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard" created an impression that all its members were
employees of HHIC.
● Samahan could not register it as a legitimate worker's association because the place
where Hanjin's industry was located was not a rural area.
ISSUE: CA erred in finding that samahan cannot form a workers' association of employees in
hanjin and instead should have formed a union, hence their registration as a workers'
association should be cancelled.
HELD: The petition is partly meritorious.
No misrepresentation on the part of Samahan to warrant cancellation of registration
In this case, Samahan's registration was cancelled not because its members were prohibited
from forming a workers' association but because they allegedly committed misrepresentation for
using the phrase, "KAMI, ang mga Manggagawa sa HAN JIN Shipyard."
Misrepresentation, as a ground for the cancellation of registration of a labor organization, is
committed "in connection with the adoption, or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, the list of members who took part in the
ratification of the constitution and by-laws or amendments thereto, and those in connection with
the election of officers, minutes of the election of officers, and the list of voters,."
The records of this case reveal no deliberate or malicious intent to commit misrepresentation on
the part of Samahan.
Removal of the word "Hanjin Shipyard" from the association's name, however, does not infringe
on Samahan's right to self-organization
It would be misleading for the members of Samahan to use "Hanjin Shipyard" in its name as it
could give the wrong impression that all of its members are employed by Hanjin. in the directive
1
of the BLR removing the words "Hanjin Shipyard," no abridgement of Samahan's right to self-
organization was committed.
Cebu Seamen’s Association, Inc. v. Ferrer-Calleja, G.R. No. 83190, August 4, 1992.
4. Rationale
Guijarno v. Court of Industrial Relations, G.R. Nos. L-28791-93, August 27, 1973.
5. Regulation
Electromat Manufacturing and Recording Corporation v. Lagunzad, G.R. No. 172699, July
27, 2011.
a. Registration
i. Requirements
Articles 240; 241; 244; and 249, Labor Code.
Article 240. 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.
Fifty pesos (P50.00) registration fee;
The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;
The names of all its members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate; (As amended by Executive Order No. 111,
December 24, 1986)
If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.
Article 244. Additional requirements for federations or national unions. Subject to Article 238, if
the applicant for registration is a federation or a national union, it shall, in addition to the
requirements of the preceding Articles, submit the following:
Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly
recognized collective bargaining agent in the establishment or industry in which it operates,
supporting the registration of such applicant federation or national union; and
The names and addresses of the companies where the locals or chapters operate and the list of
all the members in each company involved.
Article 249. Equity of the incumbent. All existing federations and national unions which meet the
qualifications of a legitimate labor organization and none of the grounds for cancellation shall
continue to maintain their existing affiliates regardless of the nature of the industry and the
location of the affiliates.
Takata (Philippines) Corporation v. Bureau of Labor Relations, G.R. No. 192676, June 4,
2014.
FACTS:
On July 7, 2009, Takata Corp filed with DOLE a petition for cancellation of Certificate of Union
Registration of Samahang Lakas Manggagawa ng Takata (SALAMAT) on the ground that was
guilty of misrepresentation, false statements, and fraud with respect to the number of those who
participated in their organizational meeting, the adoption and ratification of its Constitution and
by-laws, and in the election of its officers. 
Takata’s contention:
 In the May 1, 2009 organizational meeting of respondent, only 68 attendees signed
the attendance sheet, and which number comprised only 17% of the total number of
the 396 regular rank- and-file employees which respondent sought to represent, and
hence, respondent failed to comply with the 20% minimum membership requirement; 
 The document “Pangalan ng mga Kasapi ng Unyon” bore no signatures of the alleged
119 union members; 
 The employees were not given sufficient information on the documents they signed;
 The document “Sama-Samang Pahayag ng Pagsapi” was not submitted at the time of
the filing of respondent's application for union registration; that the 119 union
members were actually only 117;
 The total number of petitioner's employees as of May 1, 2009 was 470, and not 396
as respondent claimed.
SALAMAT’s contention:
 Denied the charge and claimed that the 119 union members were more than the 20%
requirement for union registration.
 The document “Sama-Samang Pahayag ng Pagsapi sa Unyon” which it presented in
its petition for certification election supported their claim of 119 members. 
 Takata was estopped from assailing its legal personality as it agreed to a certification
election and actively participated in the pre-election conference of the certification
election proceedings.
 The union members were informed of the contents of the documents they signed and
that the 68 attendees to the organizational meeting constituted more than 50% of the
total union membership, hence, a quorum existed for the conduct of the said meeting.
DOLE:
 Granted petition for cancellation of respondent's certificate of registration. Thus, the
Union Certificate of Registration is revoked and/or cancelled and SALAMAT is delisted
from the roll of legitimate labor organization of this office.
 68 employees who attended the organizational meeting was obviously less than 20%
of the total number of 396 regular rank-and-file employees which respondent sought
to represent, hence, short of the union registration requirement;
 attendance sheet which contained the signatures and names of the union members
totalling to 68 contradicted the list of names stated in the document denominated as
“Pangalan ng mga Kasapi ng Unyon.” 
 The document “Sama-Samang Pahayag ng Pagsapi” was not attached to the
application for registration as it was only submitted in the petition for certification
election filed by respondent at a later date. 
2
  The proceedings in the cancellation of registration and certification elections are two
different and entirely separate and independent proceedings which were not
dependent on each other.
Bureau of Labor Relations’s Ruling:
 Reversed the decision of DOLE and ordered that SALAMAT shall remain in the roster
of labor organizations.
 Takata failed to prove that respondent deliberately and maliciously misrepresented the
number of rank-and-file employees. It pointed out petitioner's basis for the alleged
non-compliance with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting supposedly
comprising only 17% of the total 396 regular rank-and-file employees.  Metal Closure and Lithography Plant in Laguna. It had been the certified bargaining agent for 20
 The list of employees who participated in the organizational meeting was a separate
and distinct requirement from the list of the names of members comprising at least
20% of the employees in the bargaining unit; and that there was no requirement for
signatures opposite the names of the union members; and there was no evidence
showing that the employees assailed their inclusion in the list of union members.
CA: Denied the petition and affirmed the decision of the BLR.
ISSUE:
Whether or not SALAMAT’s Certificate of Union Registration should be cancelled -NO. 
HELD:
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent claimed
that it has 119 members as shown in the document denominated as “Pangalan ng mga Kasapi
ng Unyon;” hence, respondent misrepresented on the 20% requirement of the law as to its
membership.
SC ruled that It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining unit. In fact, even
the IRR of the Labor Code does not so provide. It is only under Article 234 (c) that requires the
names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to the
employees’ membership in the union and not to the list of workers who participated in the
organizational meeting.
Indeed, Article 234 (b) and (c) provide for separate requirements, which must be submitted for
the union's registration, and which respondent did submit. Here, the total number of employees
in the bargaining unit was 396, and 20% of which was about 79. Respondent submitted a
document entitled “Pangalan ng Mga Kasapi ng Unyon” showing the names of 119 employees
as union members, thus respondent sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the attendance sheet of the organizational
meeting which contained the names and signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members which are more than 20% of all the
employees of the bargaining unit, and since the law does not provide for the required number of
members to attend the organizational meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a quorum for the meeting to
proceed and to validly ratify the Constitution and By-laws of the union. Thus, there’s, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's union registration.
For fraud and misrepresentation to be grounds for cancellation of union registration under Article
239 of the Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.
San Miguel Corporation Employees Union – Philippine Transport and General Workers
Organization (SMCEU-PTGWO) v. San Miguel Packaging Products Employees Union –
Pambansang Diwa ng Manggagawang Pilipino (SMPEU-PDMP), G.R. No. 171153,
September 12, 2007.
FACTS
Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular
monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC),
namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP),
and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the
years – from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino
(PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999. In
compliance with registration requirements, respondent submitted the requisite documents to the
BLR for the purpose of acquiring legal personality.6 Upon submission of its charter certificate
and other documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-
01 by the BLR on 6 July 1999.
Respondent filed with the Med-Arbiter of the DOLE Regional Officer in the National Capital
Region (DOLE-NCR), three separate petitions for certification election to represent SMPP,
SMCSU, and SMBP. All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.
Petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's
registration and its dropping from the rolls of legitimate labor organizations. In its petition,
petitioner accused respondent of committing fraud and falsification, and non-compliance with
registration requirements in obtaining its certificate of registration. It raised allegations that
respondent violated Articles 239(a), (b) and (c)10 and 234(c)11 of the Labor Code. Moreover,
petitioner claimed that PDMP is not a legitimate labor organization, but a trade union center,
hence, it cannot directly create a local or chapter.
DOLE REGIONAL DIRECTOR
issued an Order dismissing the allegations of fraud and misrepresentation, and irregularity in the
submission of documents by respondent. Regional Director Lim further ruled that respondent is
allowed to directly create a local or chapter. However, he found that respondent did not comply
with the 20% membership requirement and, thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate labor organizations.
BLR
Respondent appealed to BLR. BLR granted appeal. Ruled that As a chartered local union,
appellant is not required to submit the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus,
the revocation of its registration based on non-compliance with the 20% membership
requirement does not have any basis in the rules. Petitioner filed MR but BLR denied.
CA
3
Petitioner filed Rule 65 certiorari before CA. CA affirned BLR, ruled that a registered federation
or national union may directly create a local by submitting to the BLR copies of the charter
certificate, the local's constitution and by-laws, the principal office address of the local, and the
names of its officers and their addresses. Upon complying with the documentary requirements,
the local shall be issued a certificate and included in the roster of legitimate labor organizations.
The [herein respondent] is an affiliate of a registered federation PDMP, having been issued a
charter certificate. Under the rules we have reviewed, there is no need for SMPPEU to show a
membership of 20% of the employees of the bargaining unit in order to be recognized as a
legitimate labor union.
ISSUE:
Whether or not respondent met requirements to be a legitimate labor organization
RULING:NO ON ACCOUNT OF TRADE UNION NOT BEING ALLOWED TO CHARTER
NOTE: Focus on registration requirements
Petitioner posits that respondent is required to submit a list of members comprising at least 20%
of the employees in the bargaining unit before it may acquire legitimacy, citing Article 234(c) of
the Labor Code which stipulates that any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate of registration
based on the following requirements:
a. Fifty pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;
c. The names of all its members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate;
d. If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption
or ratification and the list of the members who participated in it
A legitimate labor organization19 is defined as "any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof." The mandate
of the Labor Code is to ensure strict compliance with the requirements on registration because a
legitimate labor organization is entitled to specific rights under the Labor Code, and are involved
in activities directly affecting matters of public interest. Registration requirements are intended to
afford a measure of protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the
labor organization for illegitimate ends. Legitimate labor organizations have exclusive rights
under the law which cannot be exercised by non-legitimate unions, one of which is the right to
be certified as the exclusive representativeof all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining. The acquisition of rights by any union or
labor organization, particularly the right to file a petition for certification election, first and
foremost, depends on whether or not the labor organization has attained the status of a
legitimate labor organization.
The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter
or a local. The first involves the affiliation of an independent union with a federation or national
union or industry union. The second, finding application in the instant petition, involves the direct
creation of a local or a chapter through the process of chartering.27
A duly registered federation or national union may directly create a local or chapter by submitting
to the DOLE Regional Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and
(c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact shall be
indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.28
The Implementing Rules stipulate that a local or chapter may be directly created by a federation
or national union. A duly constituted local or chapter created in accordance with the foregoing
shall acquire legal personality from the date of filing of the complete documents with the BLR.
The issuance of the certificate of registration by the BLR or the DOLE Regional Office is not the
operative act that vests legal personality upon a local or a chapter under Department Order No.
9. Such legal personality is acquired from the filing of the complete documentary requirements
enumerated in Section 1, Rule VI.30
However SC agreed with petitioners that respondent cannot be registered as it is a chapter of a
trade union center, not a legitimate labor organization.
Culling from its definition as provided by Department Order No. 9, a trade union center is any
group of registered national unions or federations organized for the mutual aid and protection of
its members; for assisting such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs, and is duly registered
with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.46 The same
rule provides that the application for registration of an industry or trade union center shall be
supported by the following:
(a) The list of its member organizations and their respective presidents and, in the case of an
industry union, the industry where the union seeks to operate;
(b) The resolution of membership of each member organization, approved by the Board of
Directors of such union;
4
(c) The name and principal address of the applicant, the names of its officers and their
addresses, the minutes of its organizational meeting/s, and the list of member organizations and
their representatives who attended such meeting/s; and
(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the
presidents of the member organizations, provided that where the ratification was done
simultaneously with the organizational meeting, it shall be sufficient that the fact of ratification be
included in the minutes of the organizational meeting.47
Evidently, while a "national union" or "federation" is a labor organization with at least ten locals
or chapters or affiliates, each of which must be a duly certified or recognized collective
bargaining agent;48 a trade union center, on the other hand, is composed of a group of
registered national unions or federations.49
The Implementing Rules, as amended by Department Order No. 9, provide that "a duly
registered federation or national union" may directly create a local or chapter. The provision
reads:
Section 1. Chartering and creation of a local/chapter. – A duly registered federation or national
union may directly create a local/chapter by submitting to the Regional Office or to the Bureau
two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and
(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact shall be
indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.50
Department Order No. 9 mentions two labor organizations either of which is allowed to directly
create a local or chapter through chartering – a duly registered federation or a national union.
Department Order No. 9 defines a "chartered local" as a labor organization in the private sector
operating at the enterprise level that acquired legal personality through a charter certificate,
issued by a duly registered federation or national union and reported to the Regional Office in
accordance with Rule III, Section 2-E of these Rules
ART. 234-A. Chartering and Creation of a Local Chapter. — A duly registered federation or
national union may directly create a local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire legal personality only for purposes
of filing a petition for certification election from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor organization
only upon the submission of the following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal office of the chapter;
and
(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and
by-laws are the same as that of the federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under oath by the secretary or
treasurer of the chapter and attested by its president. (Emphasis ours.)
Article 234 now includes the term trade union center, but interestingly, the provision indicating
the procedure for chartering or creating a local or chapter, namely Article 234-A, still makes no
mention of a "trade union center."
Also worth emphasizing is that even in the most recent amendment of the implementing rules,54
there was no mention of a trade union center as being among the labor organizations allowed to
charter.
In sum, although PDMP as a trade union center is a legitimate labor organization, it has no
power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the
more lenient requirements for chartering, but must have complied with the more stringent rules
for creation and registration of an independent union, including the 20% membership
requirement.
Progressive Development Corporation v. The Honorable Secretary, Department of Labor
and Employment, G.R. No. 96425, February 4, 1992.
FACTS
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 a
charter certificate. 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.
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
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-
5
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.
MED-ARBITER
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
LABOR USEC
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. Also denied MR
ISSUE:
Whether or not private respondent complied with requirements for registration:
RULING:
NO
Petitioner's contention is that a labor organization 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 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. 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.
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
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.
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.
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
6
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.
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.
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.
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.
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.
ii. Action on Application and Denial of Registration
ART. 242. [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.
ART. 243. [236] Denial of Registration; Appeal. The decision of the Labor Relations Division in
the regional office denying registration may be appealed by the applicant union to the Bureau
within ten (10) days from receipt of notice thereof.
Progressive Development Corporation – Pizza Hut v. Laguesma, G.R. No. 115077, April
18, 1997.
Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for
certification election with the Department of Labor (National Capital Region) in behalf of the rank
and file employees of the Progressive Development Corporation (Pizza Hut).
Petitioner filed verified Motion to Dismiss the petition alleging fraud, falsification and
misrepresentation in the respondent. Union's registration making it void and invalid. The motion
specifically alleged that: a) respondent Union's registration was tainted with false, forged,
double or multiple signatures of those who allegedly took part in the ratification of the
respondent Union's constitution and by-laws and in the election of its officers that there
were two sets of supposed attendees to the alleged organizational meeting that was
alleged to have taken place on June 26, 1993; that the alleged chapter is claimed to have
been supported by 318 members when in fact the persons who actually signed their
names were much less; and b) while the application for registration of the charter was
supposed to have been approved in the organizational meeting held on June 27, 1993, the
charter certification issued by the federation KATIPUNAN was dated June 26, 1993 or one
(1) day prior to the formation of the chapter, thus, there were serious falsities in the dates of
the issuance of the charter certification and the organization meeting of the alleged chapter.
Other violations alleged in supplement to MTD included:
1.)Election of its officers was held on June 27, 1993; however, it appears from the documents
submitted by respondent union to the BIR-DOLE that the Union's constitution and by-laws were
adopted only on July 7, 1993, hence, there was no bases for the supposed election of officers
on June 27, 1993 because as of this date, there existed no positions to which the officers could
be validly elected;
2) Voting was not conducted by secret ballot in violation of Article 241, section (c) of the Labor
Code;
3) The Constitution and by Laws submitted in support of its petition were not properly
acknowledged and notarized.
Petitioner filed a Petition seeking the cancellation of the Union's registration on the grounds of
fraud and falsification, Motion was likewise filed by petitioner with the Med-Arbiter requesting
suspension of proceedings in the certification election case until after the prejudicial question of
the Union's legal personality is determined in the proceedings for cancellation of registration.
7
However, in an Order. Med-Arbiter Rasidali C. Abdullah directed the holding of a certification
election among petitioner's rank and file employees.
MED-ARBITER
The Order explained Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor
organization in contemplation of law and shall remain as such until its very charter certificate is
canceled or otherwise revoked by competent authority. The alleged misrepresentation, fraud
and false statement in connection with the issuance of the charter certificate are collateral issues
which could be properly ventilated in the cancellation proceedings.
DOLE USEC
Denied appeal
ISSUE:
Whether or not DOLE USEC committed GAD in affirming Med-Arbiter decision
considering that: (1) respondent Union's legal personality was squarely put in issue; (2)
allegations of fraud and falsification, supported by documentary evidence were made;
and (3) a petition to cancel respondent Union's registration is pending with the regional
office of the Department of Labor and Employment
HELD:
YES.
In the public respondent's assailed Resolution dated December 29, 1993, the suggestion is
made that once a labor organization has filed the necessary documents and papers and the
same have been certified under oath and attested to, said organization necessarily becomes
clothed with the character of a legitimate labor organization.
In the first place, the public respondent's views as expressed in his December 29, 1993
Resolution miss the entire point behind the nature and purpose of proceedings leading to the
recognition of unions as legitimate labor organizations. Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. — Any applicant labor organization, association or group
of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption
or ratification, and the list of the members who participated in it.
A more than cursory reading of the aforecited provisions clearly indicates that the requirements
embodied therein are intended as preventive measures against the commission of fraud. After a
labor organization has filed the necessary papers and documents for registration, it becomes
mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have
been sedulously complied with. If its application for registration is vitiated by falsification and
serious irregularities, especially those appearing on the face of the application and the
supporting documents, a labor organization should be denied recognition as a legitimate labor
organization. And if a certificate of recognition has been issued, the propriety of the labor
organization's registration could be assailed directly through cancellation of registration
proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by
challenging its petition for the issuance of an order for certification election.
These measures are necessary — and may be undertaken simultaneously — if the spirit behind
the Labor Code's requirements for registration are to be given flesh and blood. Registration
requirements specifically afford a measure of protection to unsuspecting employees who may be
lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or use the labor organization for illegitimate ends. 12 Such requirements are a valid
exercise of the police power, because the activities in which labor organizations, associations
and unions of workers are engaged directly affect the public interest and should be protected.
Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30)
days within which to review all applications for registration. Article 235 provides:
Art. 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.
The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of
Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears
emphasis, specifically requires that the basis for the issuance of a certificate of registration
should be compliance with the requirements for recognition under Article 234. Since, obviously,
recognition of a labor union or labor organization is not merely a ministerial function, the
question now arises as to whether or not the public respondent committed grave abuse of
discretion in affirming the Med-Arbiter's order in spite of the fact that the question of the Union's
legitimacy was squarely put in issue and that the allegations of fraud and falsification were
adequately supported by documentary evidence.
It cannot be denied that the grounds invoked by petitioner for the cancellation of respondent
Union's registration fall under paragraph (a) and (c) of Article 239 of the Labor Code, to wit:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, the list of
members who took part in the ratification of the constitution and by-laws or amendments thereto,
the minutes of ratification, the list of members who took part in the ratification;
xxx xxx xxx
8
(c) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, the list of voters, or failure to submit these documents
together with the list of the newly elected-appointed officers and their postal addresses within
thirty (30) days from election.
The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor
Code constitute a grave challenge to the right of respondent Union to ask for certification
election. The Med-Arbiter should have looked into the merits of the petition for cancellation
before issuing an order calling for certification election. Registration based on false and
fraudulent statements and documents confer no legitimacy upon a labor organization irregularly
recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the
labor organization, not being a legitimate labor organization, acquires no rights, particularly the
right to ask for certification election in a bargaining unit.
it would have been more prudent for the Med-Arbiter and public respondent to have granted
petitioner's request for the suspension of proceedings in the certification election case, until the
issue of the legality of the Union's registration shall have been resolved. Failure of the Med-
Arbiter and public respondent to heed the request constituted a grave abuse of discretion.
NOTE: case was REMANDED to the Med-Arbiter to resolve with reasonable dispatch
petitioner's petition for cancellation of respondent Union's registration
iii. Effect of Registration, Non-registration, and
Acquisition of Legal Personality
ART. 240. [234] Requirements of Registration.183 A federation, national union or industry or
trade union center or an independent union shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.
ART. 241. [234-A] Chartering and Creation of a Local Chapter.184 A duly registered federation
or national union may directly create a local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire legal personality only for purposes
of filing a petition for certification election from the date it was issued a charter certificate.
182 Renumbered as Arts. 264, 265, and 268, respectively.
183 As amended by Sec. 1 of R.A. No. 9481 (2007), An Act Strengthening the Workers'
Constitutional Right to Self-Organization. 184 Inserted as a new provision pursuant to Sec. 2 of
R.A. No. 9481 (2007).
The chapter shall be entitled to all other rights and privileges of a legitimate labor organization
only upon the submission of the following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal office of the chapter;
and
(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and
by-laws are the same as that of the federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under oath by the secretary or
treasurer of the chapter and attested by its president.
San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing
Products Plants – San Miguel Packaging Products – San Miguel Corporation Monthlies
Rank-and-File Union – FFW (MPPP-SMPP-SMAMRFU-FFW), G.R. No. 152356, August 16,
2005.
FACTS
Respondent, identifying itself as an affiliate of Federation of Free Workers (FFW), filed a petition
for certification election with the DOLE Regional Office No. VII. In the petition, respondent stated
that it sought to be certified and to represent the permanent rank-and-file monthly paid
employees of the petitioner.2 The following documents were attached to the petition: (1) a
Charter Certificate issued by FFW on 5 June 1998 certifying that respondent as of that date was
duly certified as a local or chapter of FFW; (2) a copy of the constitution of respondent prepared
by its Secretary, Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list of
respondent’s officers and their respective addresses, again prepared by Bathan and attested by
Sagun; (4) a certification signifying that respondent had just been organized and no amount had
yet been collected from its members, signed by respondent’s treasurer Chita D. Rodriguez and
attested by Sagun; and (5) a list of all the rank-and-file monthly paid employees of the Mandaue
Packaging Products Plants and Mandaue Glass Plant prepared by Bathan and attested by
Sagun.
Petitioner filed a motion to dismiss the petition for certification election on the sole ground that
herein respondent is not listed or included in the roster of legitimate labor organizations based
on the certification issued by the Officer-In-Charge, Regional Director of the DOLE Regional
Office No. VII.
Respondent submitted to the Bureau of Labor Relations the same documents earlier attached to
its petition for certification. The accompanying letter, signed by respondent’s president Sagun,
stated that such documents were submitted in compliance with the requirements for the creation
of a local/chapter pursuant to the Labor Code and its Implementing Rules; and it was hoped that
the submissions would facilitate the listing of respondent under the roster of legitimate labor
organizations. the Chief of Labor Relations Division of DOLE Regional Office No. VII issued a
Certificate of Creation of Local/Chapter certifying that from 30 July 1998, respondent has
acquired legal personality as a labor organization/worker’s association, it having submitted all
the required documents.
Respondent instead filed a Position Paper wherein it asserted that it had complied with all the
necessary requirements for the conduct of a certification election, and that the ground relied
upon in the Motion to Dismiss was a mere technicality
Petitioner filed a Comment, wherein it reiterated that respondent was not a legitimate labor
organization at the time of the filing of the petition. Petitioner also propounded that contrary to
respondent’s objectives of establishing an organization representing rank-and-file employees,
9
two of respondent’s officers, namely Vice-President Emannuel L. Rosell and Secretary Bathan,
were actually supervisory employees. In support of this allegation, petitioner attached various
documents evidencing the designation of these two officers in supervisory roles, as well as their
exercise of various supervisory functions.9 Petitioner cited Article 245 of the Labor Code, which
provides that supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees.
Petitioner’s petition to cancel union registration was denied and CA denied their appeal. The
decision became final and executory. Despite this Med-Arbiter Manit issued an Order dismissing
respondent’s petition for certification election. The sole ground relied upon for the dismissal was
the Med-Arbiter’s Opinion that as of the date of filing of the petition on 15 June 1998, respondent
did not have the legal personality to file the said petition for certification election.
DOLE USEC
Respondent appealed to DOLE. DOLE USEC Rosalinda Dimapilis-Baldoz reversed ruling that
respondent acquired legal personality as early as 15 June 1998, the date it submitted the
required documents, citing Section 3, Rule VI of the New Rules Implementing the Labor Code
(Implementing Rules) which deems that a local/chapter acquires legal personality from the date
of filing of the complete documentary requirements as mandated in the Implementing Rules. The
DOLE also ruled that the contention that two of respondent’s officers were actually supervisors
can be threshed out in the pre-election conferences where the list of qualified voters is to be
determined.
ISSUE:
Whether or not the union acquired legal personality
RULING:
YES
At the onset, the arguments raised by petitioner on this point are plainly erroneous. Petitioner
cites the case of Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
Union,38 and the purported holding therein that "[if] it is true that at the time of the filing of the
petition, the said registration certificate has not been approved yet, then, petitioner lacks the
legal personality to file the petition." However, an examination of the case actually reveals that
the cited portion was lifted from one of the antecedent rulings of the Med-Arbiter in that case
which had not even been affirmed or reinstated by the Court on review.40 Moreover, such
pronouncement made prior to the enactment of Department Order No. 9 squarely contradicts
Section 3, Rule VI thereof, which provides that legal personality of the local/chapter is vested
upon the submission of the complete documentary requirements.
It is also worth noting that petitioner union in Toyota was an independent labor union, and not a
local/chapter, and under Department Order No. 9, independent labor unions, unlike
local/chapters, acquire legal personality only upon issuance of the certificate of registration by
the Bureau or Regional Office.
In regular order, it is the federation or national union, already in possession of legal personality,
which initiates the creation of the local/chapter. It issues a charter certificate indicating the
creation or establishment of the local/chapter. It then submits this charter certificate, along with
the names of the local/chapter’s officers, constitution and by-laws to the Regional Office or
Bureau. It is the submission of these documents, certified under oath by the Secretary or
Treasurer of the local/chapter and attested by the President, which vests legal personality in the
local/chapter, which is then free to file on its own a petition for certification election.
In this case, the federation in question, the FFW, did not submit any of these documentary
requirements to the Regional Office or Bureau. It did however issue a charter certificate to the
putative local/chapter (herein respondent). Respondent then submitted the charter certificate
along with the other documentary requirements to the Regional Office, but not for the specific
purpose of creating the local/chapter, but for filing the petition for certification election.
It could be properly said that at the exact moment respondent was filing the petition for
certification, it did not yet possess any legal personality, since the requisites for acquisition of
legal personality under Section 3, Rule VI of Department Order No. 9 had not yet been complied
with. It could also be discerned that the intention of the Labor Code and its Implementing Rules
that only those labor organizations that have acquired legal personality are capacitated to file
petitions for certification elections. Such is the general rule.
Yet there are peculiar circumstances in this case that allow the Court to rule that respondent
acquired the requisite legal personality at the same time it filed the petition for certification
election. In doing so, the Court acknowledges that the strict letter of the procedural rule was not
complied with. However, labor laws are generally construed liberally in favor of labor, especially
if doing so affirms the constitutionally guaranteed right to self-organization.
True enough, there was no attempt made by the national federation, or the local/chapter for that
matter, to submit the enumerated documentary requirements to the Regional Office or Bureau
for the specific purpose of creating the local/chapter. However, these same documents were
submitted by the local/chapter to the Regional Office as attachments to its petition for
certification election. Under Section 3, Rule VI of Department Order No. 9, it is the submission of
these same documents to the Regional Office or Bureau that operates to vest legal personality
on the local/chapter.
Thus, in order to ascertain when respondent acquired legal personality, we only need to
determine on what date the Regional Office or Bureau received the complete documentary
requirements enumerated under Section 1, Rule VI of Department Order No. 9. There is no
doubt that on 15 June 1998, or the date respondent filed its petition for certification election,
attached thereto were respondent’s constitution, the names and addresses of its officers, and
the charter certificate issued by the national union FFW. The first two of these documents were
duly certified under oath by respondent’s secretary Bathan and attested to by president Sagun
It may be noted though that respondent never submitted a separate by-laws, nor does it appear
that respondent ever intended to prepare a set thereof. Section 1(c), Rule VI, Book V of
Department Order No. 9 provides that the submission of both a constitution and a set of by-laws
is required, or at least an indication that the local/chapter is adopting the constitution and by-
laws of the federation or national union.
An examination of respondent’s constitution reveals it sufficiently comprehensive in establishing
the necessary rules for its operation.
Article IV establishes the requisites for membership in the local/chapter.
Articles V and VI name the various officers and what their respective functions are. The
procedure for election of these officers, including the necessary vote requirements, is provided
for in Article IX, while Article XV delineates the procedure for the impeachment of these officers.
10
Article VII establishes the standing committees of the local/chapter and how their members are
appointed.
Article VIII lays down the rules for meetings of the union, including the notice and quorum
requirements thereof.
Article X enumerates with particularity the rules for union dues, special assessments, fines, and
other payments.
Article XII provides the general rule for quorum in meetings of the Board of Directors and of the
members of the local/chapter, and cites the applicability of the Robert’s Rules of Order43 in its
meetings.
Article XVI governs and institutes the requisites for the amendment of the constitution.
The Court likewise sees no impediment in deeming respondent as having acquired legal
personality as of 15 June 1998, the fact that it was the local/chapter itself, and not the FFW,
which submitted the documents required under Section 1, Rule VI of Department Order No. 9.In
the ordinary course, it should have been FFW, and not respondent, which should have
submitted the subject documents to the Regional Office. Nonetheless, there is no good reason
to deny legal personality or defer its conferral to the local/chapter if it is evident at the onset that
the federation or national union itself has already through its own means established the
local/chapter.
Tropical Hut Employees’ Union-CGW v. Tropical Hut Food Market, Inc., G.R. Nos. L-43495-
99, January 20, 1990
FACTS
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated,
organized a local union called the Tropical Hut Employees Union(THEU), elected their officers,
adopted their constitution and by-laws and immediately sought affiliation with the National
Association of Trade Unions (NATU).
The NATU accepted the THEU application for affiliation. Following such affiliation with NATU,
Registration Certificate was issued by the Department of Labor in the name of the Tropical Hut
Employees Union — NATU. It appears, however, that NATU itself as a labor federation, was not
registered with the Department of Labor
After several negotiations were conducted between THEU-NATU, represented by its local
president and the national officers of the NATU, particularly Ignacio Lacsina, President, Pacifico
Rosal, Executive Vice-President and Marcelino Lontok, Jr., Vice President, and respondent
Tropical Hut Food Market, Incorporated, thru its President and General Manager, Cesar Azcona,
Sr., a Collective Bargaining Agreement was concluded between the parties on April 1, 1968, the
term of which expired on March 31, 1971.
The CBA included the following stipulations:
Article I
Coverage and Effectivity
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining
agent for all its workers and employees in all matters concerning wages, hours of work, and
other terms and conditions of employment.
Article III
Union Membership and Union Check-off
Sec. 1 —. . . Employees who are already members of the UNION at the time of the signing of
this Agreement or who become so thereafter shall be required to maintain their membership
therein as a condition of continued employment.
Sec. 3—Any employee who is expelled from the UNION for joining another federation or forming
another union, or who fails or refuses to maintain his membership therein as required, . . . shall,
upon written request of the UNION be discharged by the COMPANY. (Rollo, pp. 667-670)
And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of
which are as follows:
We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of which
the TROPICAL HUT EMPLOYEES UNION is an affiliate as sole collective bargaining agent in all
matters relating to salary rates, hours of work and other terms and conditions of employment in
the Tropical Hut Food Market, Inc. and we hereby authorize the said company to deduct the
amount of Four (P 4.00) Pesos each every month as our monthly dues and to deliver the
amount to the Treasurer of the Union or his duly authorized representatives.
On May 21, 1971, respondent company and THEU-NATU entered into a new Collective
Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the
previous union-shop security clause and the attached check-off authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by
the respondent company as Assistant Unit Manager. On July 24, 1973, he wrote the general
membership of his union that for reason of his present position, he was resigning as President of
the THEU-NATU effective that date. As a consequence thereof, his Vice-President, Jose
Encinas, assumed and discharged the duties of the presidency of the THEU-NATU.
On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the
incumbent officers of the local union informing the NATU that THEU was disaffiliating from the
NATU federation. On December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an
announcement in an open letter to the general membership of the THEU, concerning the latter's
disaffiliation from the NATU and its affiliation with the Confederation of General Workers (CGW)
On January 9, 1974, Pacifico Rosal, President of the Confederation of General Workers (CGW),
wrote a letter in behalf of complainant THEU-CGW to the respondent company demanding the
remittance of the union dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-
CGW, but this was refused by the respondent company.
The then so-called THEU-CGW held its annual election of officers, with Jose Encinas elected as
President. On January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the
respondent company of the result of the elections. On January 9, 1974, Pacifico Rosal,
President of the Confederation of General Workers (CGW), wrote a letter in behalf of
complainant THEU-CGWto the respondent company demanding the remittance of the union
dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was
refused by the respondent company.
A request made by the NATU federation to the respondent company to dismiss him (Encinas)
in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement.
11
 The respondent company applied for clearance with the Secretary of Labor to dismiss the other
officers and members of THEU-CGW. The company also suspended them effective that day.
NATU received a letter jointly signed by the incumbent officers of the local union informing the
NATU that THEU was disaffiliating from the NATU federation. The employees were dismissed
because, as respondent company contended, they violated the union security clause.
Not properly discussed in full text of the case but certain employees were dismissed due to the
disaffiliation from NATU supposedly due to CBA violation
LABOR ARBITER
Ordered reinstatement of dismissed employees
NLRC
Granted appeal of private respondent, ordered the respondent company, under pain of being
cited for contempt for failure to do so, to give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of membership and loyalty to the Tropical
Hut Employees Union-NATU and the National Association of Trade Unions in the event it hires
additional personnel.
DOLE SEC: Affirmed NLRC
ISSUES:
Whether THEU-CGW’s disaffiliation was valid and whether they lost legal personality by
disaffiliating with NATU
HELD:
YES. 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.
All employees enjoy the right to self organization and to form and join labor organizations of their
own choosing for the purpose of collective bargaining and to engage in concerted activities for
their mutual aid or protection. This is a fundamental right of labor that derives its existence from
the Constitution. In interpreting the protection to labor and social justice provisions of the
Constitution and the labor laws or rules or regulations, We have always adopted the liberal
approach which favors the exercise of labor rights.
Further, there is no merit in the contention of the respondents that the act of disaffiliation violated
the union security clause of the CBA and that their dismissal as a consequence thereof is valid.
A perusal of the collective bargaining agreements shows that the THEU-NATU, and not the
NATU federation, was recognized as the sole and exclusive collective bargaining agent for all its
workers and employees in all matters concerning wages, hours of work and other terms and
conditions of employment 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. Moreover, the union security clause
embodied in the agreements cannot be used to justify the dismissals meted to petitioners since
it is not applicable to the circumstances obtaining in this case. 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. Clearly, since there is no violation of the union security provision in the CBA,
there was no sufficient ground to terminate the employment of petitioners. Petition granted
iv. Rights of Legitimate Labor Organization
ART. 251. [242] Rights of Legitimate Labor Organizations.193 A legitimate labor organization
shall have the right:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the employees in an appropriate
bargaining unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with its annual audited financial
statements, including the balance sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the union has been duly recognized
by the employer or certified as the sole and exclusive bargaining representative of the
employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the
existing collective bargaining agreement, or during the collective bargaining negotiation;
(d) To own property, real or personal, for the use and benefit of the labor organization and its
members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its members,
including cooperative, housing, welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to the contrary, the income and the
properties of legitimate labor organizations, including grants, endowments, gifts, donations and
contributions they may receive from fraternal and similar organizations, local or foreign, which
are actually, directly and exclusively used for their lawful purposes, shall be free from taxes,
duties and other assessments. The exemptions provided herein may be withdrawn only by a
special law expressly repealing this provision.
Baptista v. Villanueva, G.R. No. 194709, July 31, 2013.
FACTS
Petitioners were former union members of Radio Philippines Network Employees Union
(RPNEU), a legitimate labor organization and the sole and exclusive bargaining agent of the
rank and file employees of Radio Philippines Network (RPN), a government-sequestered
corporation involved in commercial radio and television broadcasting affairs
Respondents were the union’s elected officers and members
On suspicion of union mismanagement, petitioners, together with some other union members,
filed a complaint for impeachment of their union president, Reynato Siozon, before the executive
board of RPN, which was eventually abandoned. They later re-lodged the impeachment
complaint, this time, against all the union officers and members of RPNEU before the
Department of Labor and Employment (DOLE). They likewise filed various petitions for audit
covering the period from 2000 to 2004
12
Two written complaints were filed against petitioners and several others for alleged violation of
the union’s Constitution and By-Laws.Months later a different group of union members filed a
third complaint against petitioners and 12 others, before the Chairman of RPNEU’s Committee
on Grievance and Investigation citing as grounds the "commission of an act which violates
RPNEU Constitution and By-Laws, specifically:
Article IX, Section 2.2 for joining or forming a union outside the sixty (60) days period
Article IX, Section 2.5 for urging or advocating that a member start an action in any court of
justice or external investigative body against the Union or its officer without first exhausting all
internal remedies open to him or available in accordance with the CBL
Petitioners and their group, through an exchange of communications with the Committee, denied
the charges imputed against them and contested the procedure adopted by the Committee in its
investigation. The Committee submitted their recommendation of expulsion from the union to
RPNEU’s Board of Directors.RPNEU’s Board of Directors affirmed the recommendation of
expulsion of petitioners and the 12 others from union membership in a Board Resolution.
Petitioners with the 12 others wrote to RPNEU’s President and Board of Directors that their
expulsion from the union was an ultra vires act because the Committee failed to observe the
basic elements of due process because they were not given the chance to physically confront
and examine their complainants. In a letter, RPNEU’s officers informed their company of the
expulsion of petitioners and the 12 others from the union and requested the management to
serve them notices of termination from employment in compliance with their CBA’s union
security clause. RPN HRD Manager, Lourdes Angeles, informed petitioners and the 12 others of
the termination of their employment effective March 20, 2006, enforcing Article II, Section 216
also known as the union security clause of their current CBA.
Petitioners filed three complaints for Unfair Labor Practice questioning legality of their expulsion
LABOR ARBITER
Favored petitioners, adjudged the respondents guilty of ULP pursuant to Article 249 (a) and (b)
of the Labor Code. The LA clarified that only the union officers of RPNEU could be held
responsible for ULP, so they exonerated six (6) of the original defendants who were mere union
members. The LA also ordered the reinstatement of petitioners as bonafide members of
RPNEU.
NLRC
Set aside LA decision. NLRC found that petitioners filed a suit calling for the impeachment of the
officers and members of the Executive Board of RPNEU without first resorting to internal
remedies available under its own Constitution and By-Laws. The NLRC likewise decreed that the
LA’s order of reinstatement was improper because the legality of the membership expulsion was
not raised in the proceedings and, hence, beyond the jurisdiction of the LA
CA
Affirmed NLRC. CA stated that the termination of employment by virtue of a union security
clause was recognized in our jurisdiction. It explained that the said practice fortified the union
and averted disunity in the bargaining unit within the duration of the CBA. The CA declared that
petitioners were accorded due process before they were removed from office. In fact, petitioners
were given the opportunity to explain their case and they actually availed of said opportunity by
submitting letters containing their arguments
ISSUE:
Whether the union members are guilty of ULP
RULING:
NO
The primary concept of ULP is embodied in Article 247 of the Labor Code, which provides:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair
labor practices violate the constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the promotion of healthy and stable labor-management
relations.
In essence, ULP relates to the commission of acts that transgress the workers’ right to organize.
As specified in Articles 248 and 249 of the Labor Code, the prohibited acts must necessarily
relate to the workers' right to self-organization and to the observance of a CBA. Absent the said
vital elements, the acts complained, although seemingly unjust, would not constitute ULP
ART. 249. UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS.- It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their rights to self-organization. However,
a labor organization shall have the right to prescribe its own rules with respect to the acquisition
or retention of membership:
(b) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization has
been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to other
members;
Based on RPNEU’s Constitution and By-Laws, the charges against petitioners were not mere
internal squabbles, but violations that demand proper investigation because, if proven, would
constitute grounds for their expulsion from the union. As such, Article X, Investigation
Procedures and Appeal Process of RPNEU’s Constitution and By-Laws, which reads –
SECTION 1. Charge against any member or officer of the Union shall be submitted to the Board
of Directors (BOD) in writing, which shall refer the same, if necessary, to the committee on
Grievance and Investigation. The Committee shall hear any charge and subsequently, forward
its finding and recommendation to the BOD. The BOD has the power to approve or nullify the
recommendation of the Committee on Grievance and Investigation based on the merit of the
appeal.
was correctly applied under the circumstances.
It is well-settled that workers’ and employers’ organizations shall have the right to draw up their
constitutions and rules to elect their representatives in full freedom, to organize their
administration and activities and to formulate their programs.In this case, RPNEU’s Constitution
and By-Laws expressly mandate that before a party is allowed to seek the intervention of the
court, it is a pre-condition that he should have availed of all the internal remedies within the
13
organization. Petitioners were found to have violated the provisions of the union’s Constitution
and By-Laws when they filed petitions for impeachment against their union officers and for audit
before the DOLE without first exhausting all internal remedies available within their organization.
This act is a ground for expulsion from union membership. Thus, petitioners’ expulsion from the
union was not a deliberate attempt to curtail or restrict their right to organize, but was triggered
by the commission of an act, expressly sanctioned by Section 2.5 of Article IX of the union’s
Constitution and By-Laws.
Petitioners failed to discharge the burden required to prove the charge of ULP against the
respondents. Aside from their self-serving allegations, petitioners were not able to establish how
they were restrained or coerced by their union in a way that curtailed their right to self-
organization.petitioners had the burden of adducing substantial evidence to support its
allegations of ULP, which burden they failed to discharge. In fact, both the NLRC and the CA
found that petitioners were unable to prove their charge of ULP against the respondents
Acedera v. International Container Terminal Services, Inc. (ICTSI), G.R. No. 146073,
January 13, 2003.
FACTS:
Jerry Acedera, Et. Al. are employees of herein private respondent International Container
Terminal Services, Inc. (ICTSI) and are officers/members of Associated Port Checkers &
Workers Union-International Container Terminal Services, Inc. Local Chapter (APCWU-ICTSI), a
labor organization duly registered as a local affiliate of the Associated Port Checkers & Workers
Union (APCWU).
On September 28, 1990, ICTSI entered into its first Collective Bargaining Agreement (CBA) with
APCWU with a term of five years effective until September 28, 1995. The CBA was renegotiated
and thereafter renewed through a second CBA that took effect on September 29, 1995, effective
for another five years. Thus, in accordance with the above-quoted provision of the CBA, the
employees’ work week was reduced to five days or a total of 250 days a year. ICTSI, however,
continued using the 304-day divisor in computing the wages of the employees.
Regional Tripartite Wage and Productivity Board (RTWPB) in the NCR decreed a P17.00 daily
wage increase for all workers and employees receiving P125.00 per day or lower in the National
Capital Region. 7 The then president of APCWU, together with some union members, thus
requested the ICTSI’s Human Resource Department/Personnel Manager to compute the actual
monthly increase in the employees’ wages by multiplying the RTWPB mandated increase by 365
days and dividing the product by 12 months. ICTSI stopped using 304 days as divisor and
started using 365 days to determine the daily wage.
Later on, ICTSI went on a retrenchment program and laid off its on-call employees. This
prompted the APCWU-ICTSI to file a notice of strike which included as cause of action not only
the retrenchment of the employees but also ICTSI’s use of 365 days as divisor in the
computation of wages. The dispute respecting the retrenchment was resolved by a compromise
settlement while that respecting the computation of wages was referred to the Labor Arbiter.
Acedera et al. filed a Motion to Intervene.
LA’s Ruling:The correct divisor in computing the daily wage and other labor standard benefits
of the employees of ICTSI who are members of the complainant Union as well as the other
employees similarly situated is 250 days.
● ICTS is ordered to pay the employees concerned the differentials representing the
underpayment of said salaries and other benefits.
● Denied petitioners-appellants’ Complaint-in-Intervention with Motion for Intervention
upon a finding that they are already well represented by APCWU
NLRC’s Ruling:
● Reversed the decision of the LA and dismissed APCWU’s complaint.
CA’s Ruling:
● dismissed APCWU’s petition on the following grounds: failure to allege when its
motion for reconsideration of the NLRC decision was filed, failure to attach the
necessary appendices to the petition, and failure to file its motion for extension to file
its petition within the reglementary period.
● Records shows that petitioners, claiming to be employees of ICTSI, are already well
represented by its employees union, APCWU.
ISSUE:
Whether or not Acedera et al. have no legal right to intervene in the case as their intervention
was a superfluity -YES.
HELD:
Petitioner’s contention is based on Rule 19 of the 1997 Rules of Civil Procedure, Section 1.
They stress that they have complied with the requisites for intervention because (1) they are the
ones who stand to gain or lose by the direct legal operation and effect of any judgment that may
be rendered in this case, (2) no undue delay or prejudice would result from their intervention
since their Complaint-in-Intervention with Motion for Intervention was filed while the Labor
Arbiter was still hearing the case and before any decision thereon was rendered, and (3) it was
not possible for them to file a separate case as they would be guilty of forum shopping because
the only forum available for them was the Labor Arbiter.
However, SC ruled that Petitioners failed to consider, in addition to the rule on intervention, the
rule on representation, thusly:
Sec. 3. Representatives as parties. — Where the action is allowed to be prosecuted or defended
by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included
in the title of the case and shall be deemed to be the real party in interest. A representative may
be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized
by law or these Rules.
A labor union is one such party authorized to represent its members under Article 242(a) of the
Labor Code which provides that a union may act as the representative of its members for the
purpose of collective bargaining. This authority includes the power to represent its members for
the purpose of enforcing the provisions of the CBA. That APCWU acted in a representative
capacity "for and on behalf of its Union members and other employees similarly situated," the
title of the case filed by it at the Labor Arbiter’s Office so expressly states.
While a party acting in a representative capacity, such as a union, may be permitted to
intervene in a case, ordinarily, a person whose interests are already represented will not
be permitted to do the same except when there is a suggestion of fraud or collusion or
that the representative will not act in good faith for the protection of all interests
represented by him.
14
To reiterate, for a member of a class to be permitted to intervene in a representative action,
fraud or collusion or lack of good faith on the part of the representative must be proven. It must
be based on facts borne on record. Mere assertions, as what petitioners-appellants proffer, do
not suffice.
San Miguel Foods, Inc. – Cebu B-MEG Feed Plant v. Lauesma, G.R. No. 116172, October
10, 1996.
FACTS:
On September 24, 1993, a petition for certification election among the monthly-paid employees
of the San Miguel Food, Inc.-Cebu B-Meg Feeds Plant was filed by labor federation Ilaw at
Buklod ng Mangagawa (IBM) before Med-Arbiter Achilles V. Manit, alleging, that it is a legitimate
labor organization duly registered with DOLE. SMFI-Cebu B-Meg Feeds Plant (SMFI), is a
business entity duly organized and existing under the laws of the Philippines which employs
roughly 75 monthly paid employees, almost all of whom support the present petition. It was
submitted in the petition that there has been no certification election conducted in SMFI to
determine the sole and exclusive bargaining agent thereat for the past 2 years and that the
proposed bargaining unit, which is SMFI's monthly paid employees, is an unorganized one. It
was also stated therein that IBM has already complied with the mandatory requirements for the
creation of its local or affiliate in SMFI's establishment.
SMFI filed a Motion to Dismiss on the ground that a similar petition remains pending between
the same parties for the same cause of action before Med-Arbiter Achilles V. Manit. The earlier
petition, pertains to the the issuance of an order by the Med-Arbiter allowing the conduct for a
certification election in SMFI's establishment.
IBM filed its Opposition to SMFI's Motion to Dismiss contending, case referred to by SMFI had
already been resolved by Med-Arbiter Manit in his Resolution and Order wherein IBM's first
petition for certification election was denied mainly due to IBM's failure to comply with certain
mandatory requirements of the law. Thus, IBM argues that there having been no similar petition
pending before Med-Arbiter Manit, another petition for certification election may be refiled as
soon as the said requirements are met.
Med-Arbiter Manit’s Ruling:
● Usec Laguesma, granted the second petition for certification election of private
respondent IBM.
SMFI’s contention upon appeal:
Med-Arbiter erred in directing the conduct of certification election considering that the local or
chapter of IBM at SMFI is still not a legitimate labor organization with a right to be certified as the
exclusive bargaining agent in petitioner's establishment based on two grounds: (1) the
authenticity and due execution of the Charter Certificate submitted by IBM in favor of its local at
SMFI cannot yet be ascertained as it is still not known who is the legitimate and authorized
representative of the IBM Federation who may validly issue said Charter Certificate; and (2) a
group of workers or a local union shall acquire legal personality only upon the issuance of a
Certificate of Registration by the Bureau of Labor Relations under Article 234 of the Labor Code,
which IBM at SMFI did not possess.
Secretary of Labor and Employment’s Ruling:
● Denied the appeal
ISSUE:
Whether or not SMFI is not a legitimate labor organization on the basis of Article 234 of the
Labor Code, any labor organization shall acquire legal personality only upon the issuance of the
Certificate of Registration by the Bureau of Labor Relations - NO.
HELD:
Article 212(h) of the Labor Code defines a legitimate labor organization as "any labor
organization duly registered with the Department of Labor and Employment, and includes any
branch or local thereof ."
It is important to determine whether or not a particular labor organization is legitimate since
legitimate labor organizations have exclusive rights under the law which cannot be exercised by
non-legitimate unions, one of which is the right to be certified as the exclusive representative of
all the employees in an appropriate collective bargaining unit for purposes of collective
bargaining. These rights are found under Article 242.
Moreover,, a labor organizations attains the status of legitimacy only upon the issuance in its
name of a Certificate of Registration by the Bureau of Labor Relations pursuant to Articles 234
and 235 of the Labor Code. The procedure is not the only way by which a labor union may
become legitimate, however. When an unregistered union becomes a branch, local or chapter of
a federation, some of the aforementioned requirements for registration are no longer required.
Section 3, Rule II, Book V of the Implementing Rules of the Labor Code governs the procedure
for union affiliation.
In upholding the legitimate status of IBM at SMFI as mentioned by the SolGen, the contention of
the respondent that unless and until the issue on who is the legitimate national president, of the
Ilaw at Buklod ng Mangagawa is resolved, the petitioner cannot claim that is has a valid charter
certificate necessary for it to acquire legal personality is untenable. We wish to stress that the
resolution of the said issue will not in any way affect the validity of the charter certificate issued
by the IBM in favor of the local union. It must be borne in mind that the said charter certificate
was issued by the IBM in its capacity as a labor organization, a juridical entity which has a
separate and distinct legal personality from its members. When as in this case, there is no
showing that the Federation acting as a separate entity is questioning the legality of the
issuance of the said charter certificate, the legality of the issuance of the same in favor of the
local union is presumed. This, notwithstanding the alleged controversy on the leadership of the
federation.
In affirming the comment of the SolGen, SC ruled that respondent's Comment to the petition
indicates that in the election of officers held to determine the representatives of IBM, the faction
of Mr. Meron lost to the group of Mr. Edilberto Galvez, and the latter was acknowledged as the
duly elected IBM National President. Thus, the authority of Mr. Galvez to sign the charter
certificate of IBM at SMFI, as President of the IBM Federation, can no longer be successfully
questioned. A punctilious examination of the records presents no evidence to the contrary and
petitioner, instead of squarely refuting this point, skirted the issue by insisting that the mere
presence of two contending factions in the IBM prevents the issuance of a valid and authentic
charter certificate in favor of IBM at SMFI.
Lastly,, the certification election sought to be stopped by petitioner is fait accompli. The monthly
paid rank-and-file employees of SMFI have already articulated their choice as to who their
15
collective bargaining agent should be. In the certification election held on August 20, 1994, the
SMFI workers chose IBM at SMFI to be their sole and exclusive bargaining agent. This
democratic decision deserve utmost respect. Again, it bears stressing that labor legislation
seeks in the main to protect the interest of the members of the working class. It should never be
used to subvert their will.
b. Cancellation of Union Certificate of Registration
• Articles 245; 246; 247; 248; 250(j), last paragraph; 252; and 256, Labor Code.
Article 245: [238] Cancellation of Registration.186 The certificate of registration of any
legitimate labor organization, whether national or local, may be cancelled by the Bureau, after
due hearing, only on the grounds specified in Article 239 hereof.
Article 246: [238-A] Effect of a Petition for Cancellation of Registration.188 A petition for
cancellation of union registration shall not suspend the proceedings for certification election nor
shall it prevent the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the union to seek just and
equitable remedies in the appropriate courts.
Article 247: [239] Grounds for Cancellation of Union Registration.189 The following may
constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Article 248: [239-A] Voluntary Cancellation of Registration.190 The registration of a legitimate
labor organization may be cancelled by the organization itself: Provided, That at least two-thirds
of its general membership votes, in a meeting duly called for that purpose to dissolve the
organization: Provided, further, That an application to cancel registration is thereafter submitted
by the board of the organization, attested to by the president thereof.
Article 252: [242-A] Reportorial Requirements.194 The following are documents required to be
submitted to the Bureau by the legitimate labor organization concerned:
193 As amended by Sec. 17 of R.A. No. 6715 (1989).194 As amended by Sec. 7 of R.A. No.
9481 (2007).
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days
from adoption or ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days
from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union
registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
Article 256: [245-A] Effect of Inclusion as Members of Employees Outside the Bargaining
Unit.198 The inclusion as union members of employees outside the bargaining unit shall not be
a ground for the cancellation of the registration of the union. Said employees are automatically
deemed removed from the list of membership of said union.
Takata (Philippines) Corporation v. Bureau of Labor Relations, G.R. No. 192676, June 4,
2014.
FACTS:
On July 7, 2009, Takata Corp filed with DOLE a petition for cancellation of Certificate of Union
Registration of Samahang Lakas Manggagawa ng Takata (SALAMAT) on the ground that was
guilty of misrepresentation, false statements, and fraud with respect to the number of those who
participated in their organizational meeting, the adoption and ratification of its Constitution and
by-laws, and in the election of its officers.
Takata’s contention:
- In the May 1, 2009 organizational meeting of respondent, only 68 attendees signed
the attendance sheet, and which number comprised only 17% of the total number of
the 396 regular rank- and-file employees which respondent sought to represent, and
hence, respondent failed to comply with the 20% minimum membership requirement;
- The document “Pangalan ng mga Kasapi ng Unyon” bore no signatures of the alleged
119 union members;
- The employees were not given sufficient information on the documents they signed;
- The document “Sama-Samang Pahayag ng Pagsapi” was not submitted at the time of
the filing of respondent's application for union registration; that the 119 union
members were actually only 117;
- The total number of petitioner's employees as of May 1, 2009 was 470, and not 396
as respondent claimed.
SALAMAT’s contention:
- Denied the charge and claimed that the 119 union members were more than the 20%
requirement for union registration.
- The document “Sama-Samang Pahayag ng Pagsapi sa Unyon” which it presented in
its petition for certification election supported their claim of 119 members.
- Takata was estopped from assailing its legal personality as it agreed to a certification
election and actively participated in the pre-election conference of the certification
election proceedings.
- The union members were informed of the contents of the documents they signed and
that the 68 attendees to the organizational meeting constituted more than 50% of the
total union membership, hence, a quorum existed for the conduct of the said meeting.
DOLE:
16
 ● Granted petition for cancellation of respondent's certificate of registration. Thus, the
Union Certificate of Registration is revoked and/or cancelled and SALAMAT is delisted
from the roll of legitimate labor organization of this office.
● 68 employees who attended the organizational meeting was obviously less than 20%
of the total number of 396 regular rank-and-file employees which respondent sought
to represent, hence, short of the union registration requirement;
● attendance sheet which contained the signatures and names of the union members
totalling to 68 contradicted the list of names stated in the document denominated as
“Pangalan ng mga Kasapi ng Unyon.”
● The document “Sama-Samang Pahayag ng Pagsapi” was not attached to the
application for registration as it was only submitted in the petition for certification
election filed by respondent at a later date.
● The proceedings in the cancellation of registration and certification elections are two
different and entirely separate and independent proceedings which were not
dependent on each other.
Bureau of Labor Relations’s Ruling:
● Reversed the decision of DOLE and ordered that SALAMAT shall remain in the roster
of labor organizations.
● Takata failed to prove that respondent deliberately and maliciously misrepresented the
number of rank-and-file employees. It pointed out petitioner's basis for the alleged
non-compliance with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting supposedly
comprising only 17% of the total 396 regular rank-and-file employees.
● The list of employees who participated in the organizational meeting was a separate
and distinct requirement from the list of the names of members comprising at least
20% of the employees in the bargaining unit; and that there was no requirement for
signatures opposite the names of the union members; and there was no evidence
showing that the employees assailed their inclusion in the list of union members.
CA: Denied the petition and affirmed the decision of the BLR.
ISSUE:
Whether or not SALAMAT’s Certificate of Union Registration should be cancelled -NO.
HELD:
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent claimed
that it has 119 members as shown in the document denominated as “Pangalan ng mga Kasapi
ng Unyon;” hence, respondent misrepresented on the 20% requirement of the law as to its
membership.
SC ruled that It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining unit. In fact, even
the IRR of the Labor Code does not so provide. It is only under Article 234 (c) that requires the
names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to the
employees’ membership in the union and not to the list of workers who participated in the
organizational meeting.
Indeed, Article 234 (b) and (c) provide for separate requirements, which must be submitted for
the union's registration, and which respondent did submit. Here, the total number of employees
in the bargaining unit was 396, and 20% of which was about 79. Respondent submitted a
document entitled “Pangalan ng Mga Kasapi ng Unyon” showing the names of 119 employees
as union members, thus respondent sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the attendance sheet of the organizational
meeting which contained the names and signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members which are more than 20% of all the
employees of the bargaining unit, and since the law does not provide for the required number of
members to attend the organizational meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a quorum for the meeting to
proceed and to validly ratify the Constitution and By-laws of the union. Thus, there’s, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's union registration.
For fraud and misrepresentation to be grounds for cancellation of union registration under Article
239 of the Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.
The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and Allied
Industries – Hertiage Hotel Manila Supervisors Chapter (NUWHRAINHHMSC), G.R. No.
178296, January 12, 2011.
FACTS:
On October 11, 1995, respondent filed with the DOLE a petition for certification election. The
Med-Arbiter granted the petition on February 14, 1996 and ordered the holding of a certification
election. On appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the
Med-Arbiter’s order and remanded the case to the Med-Arbiter for the holding of a preelection
conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied
on September 23, 1996.
The preelection conference was not held as initially scheduled; Petitioner moved for the
dismissal on the petition due to alleged repeated non-appearance of respondent. The latter
agreed to suspend proceedings until further notice. The preelection conference resumed on
January 29, 2000. Later on, Petitioner discovered that respondent had failed to submit to the
Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its
members since it filed its registration papers in 1995. Thus, petitioner filed a Petition for
Cancellation of Registration of respondent, on the ground of the non-submission of the said
documents. Petitioner prayed that respondent’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.
Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged
as the winner. Thus, petitioner filed a Protest with Motion to Defer Certification of Election
Results and Winner.
Petitioner’s contention:
- The certification election held on June 23, 2000 was an exercise in futility because,
once respondent’s registration is cancelled, it would no longer be entitled to be
certified as the exclusive bargaining agent of the supervisory employees.
- Some of respondent’s members were not qualified to join the union because they
were either confidential employees or managerial employees.
- Prayed that the certification of the election results and winner be deferred until the
petition for cancellation shall have been resolved, and that respondent’s members
who held confidential or managerial positions be excluded from the supervisors’
bargaining unit.
17

Respondent’s contention:
- The petition was filed primarily to delay the conduct of the certification election, the
respondent’s certification as the exclusive bargaining representative of the supervisory
employees, and the commencement of bargaining negotiations.
- Prayed for the dismissal of the petition for the following reasons: (a) petitioner is
estopped from questioning respondent’s status as a legitimate labor organization as it
had already recognized respondent as such during the preelection conferences; (b)
petitioner 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.
- Citing National Union of Bank Employees v. Minister of Labor, et al. and Samahan ng
Manggagawa sa Pacific Plastic v. Hon. Laguesma, the Med-Arbiter held that the
pendency of a petition for cancellation of registration is not a bar to the holding of a
certification election.
DOLE: Dismissed the appeal and the Regional Director’s reasoning:
● While finding that respondent had indeed failed to file financial reports and the list of
its members for several years, he, nonetheless, denied the petition, ratiocinating that
freedom of association and the employees’ right to self-organization are more
substantive considerations.
● The fact that respondent won the certification election and that it had already been
certified as the exclusive bargaining agent of the supervisory employees. In view of
the foregoing, Regional Director Maraan—while emphasizing that the non-compliance
with the law is not viewed with favor—considered the belated submission of the
annual financial reports and the list of members as sufficient compliance thereof and
considered them as having been submitted on time.
Bureau of Labor Relations: Director Cacdac’s inhibited himself from the case being the
previous counsel of respondent. Thus, DOLE Secretary Sto. Tomas took cognizance of the
appeal by dismissing the same holding that the constitutionally guaranteed freedom of
association and right of workers to self-organization outweighed respondent’s noncompliance
with the statutory requirements to maintain its status as a legitimate labor organization.
CA’s Ruling: Denied the petition.
ISSUE:
Whether or not failure to comply with the statutory requirement, filing financial reports and the list
of its members, sufficient ground for the cancellation of registration of the respondent as a labor
union -NO.
HELD:
Petitioner also insists that respondent’s registration as a legitimate labor union should be
cancelled. Petitioner posits that once it is determined that a ground enumerated in Article 239 of
the Labor Code is present, cancellation of registration should follow; it becomes the ministerial
duty of the Regional Director to cancel the registration of the labor organization, hence, the use
of the word "shall." Petitioner points out that the Regional Director has admitted in its decision
that respondent failed to submit the required documents for a number of years; therefore,
cancellation of its registration should have followed as a matter of course.
SC ruled that the non-compliance should not be a ground for the cancellation. Articles 238 and
239 of the Labor Code provide that failure to file financial reports and the list of its members are
grounds for the cancellation of Union Organization. However, 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.
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.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, appellee had submitted its financial statement for the
years 1996-1999. With this submission, appellee 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 appellee’s late submission.
Punctuality on the part of the union and its officers could have prevented this petition.
Mariwasa Siam Ceramics, Inc. v. The Secretary of the Department of Labor and
Employment, G.R. No. 183317, December 21, 2009.
FACTS:
On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) was issued a Certificate of Registration as a legitimate labor
organization by DOLE.
Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration against
respondent, claiming that the latter violated Article 234 of the Labor Code for not complying with
the 20% requirement, and that it committed massive fraud and misrepresentation in violation of
Article 239 of the same code. The petitioner insists that respondent failed to comply with the
20% union membership requirement for its registration as a legitimate labor organization
because of the disaffiliation from the total number of union members of 102 employees who
executed affidavits recanting their union membership.
Regional Director of DOLE: issued an Order granting the petition, revoking the registration of
respondent, and delisting it from the roster of active labor unions.
Bureau of Labor Relations: granted the appeal. Reversed decision of Regional Director,
SMMSC-Independent remains in the roster of legitimate labor organizations.
CA: denied the petition.
18

ISSUES:
1. Whether or not SMMSC-Independent failed to comply with 20% requirement -NO.  Hotel and Restaurant and Allied Industries (NUWHRAIN). It was also alleged that such omitted
2. whether or not the withdrawal of 31 union members from NATU affected the petition
for certification election insofar as the 30% requirement is concerned -NO.
HELD:
1. Even assuming the veracity of the affidavits of recantation, the legitimacy of
respondent as a labor organization must be affirmed. While it is true that the
withdrawal of support may be considered as a resignation from the union, the fact
remains that at the time of the union's application for registration, the affiants were
members of respondent and they comprised more than the required 20% membership
for purposes of registration as a labor union. Article 234 of the Labor Code merely
requires a 20% minimum membership during the application for union registration. It
does not mandate that a union must maintain the 20% minimum membership
requirement all throughout its existence.
2. It appears undisputably that the 31 union members had withdrawn their support to the
petition before the filing of said petition. It would be otherwise if the withdrawal was
made after the filing of the petition for it would then be presumed that the withdrawal
was not free and voluntary. The presumption would arise that the withdrawal was
procured through duress, coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made before the
filing of the petition, the names of employees supporting the petition are supposed to
be held secret to the opposite party. Logically, any such withdrawal or retraction
shows voluntariness in the absence of proof to the contrary. Moreover, it becomes
apparent that such employees had not given consent to the filing of the petition, hence
the subscription requirement has not been met.
When the withdrawal or retraction is made after the petition is filed, the employees
who are supporting the petition become known to the opposite party since their names
are attached to the petition at the time of filing. Therefore, it would not be unexpected
that the opposite party would use foul means for the subject employees to withdraw
their support.
The affidavits of recantation were executed after the identities of the union members
became public, i.e., after the union filed a petition for certification election on May 23,
2005, since the names of the members were attached to the petition. The purported
withdrawal of support for the registration of the union was made after the documents
were submitted to the DOLE, Region IV-A. The logical conclusion, therefore, following
jurisprudence, is that the employees were not totally free from the employer's
pressure, and so the voluntariness of the employees' execution of the affidavits
becomes suspect.
The Heritage Hotel Manila v. Pinag-isang Galing at Lakas ng mga Manggagawa sa
Heritage Manila (PIGLASHERITAGE), G.R. No. 177024, October 30, 2009.
FACTS:
The Heritage Hotel Employees Union (HHE) was formed in 2000 by certain rank and file
employees of herein petitioner Heritage Hotel Manila, to which the Department of Labor and
Employment-National Capital Region issued a certificate of registration.  HHE filed a petition for
certification election which petitioner opposed on the ground that HHE misrepresented itself to
be an independent union, when in fact it was a local chapter of the National Union of Workers in
disclosure was intentional because petitioner’s supervisors union was already affiliated with it.
Petitioner also filed a petition to cancel the union’s registration certificate. The Med-Arbiter
nevertheless granted HHE’s petition for certification election. 
Petitioner appealed to the Secretary of Labor but it was denied as well as its motion for
reconsideration, prompting petitioner to file a petition for certiorari with the Court of Appeals. The
CA issued a writ of injunction against the holding of HHE’s certification election until the petition
for cancellation of its registration shall have been resolved with finality. 
In 2003, another union, herein respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa
Heritage Manila (PIGLAS), was formed by certain rank and file employees of petitioner at a
meeting. PIGLAS was issued its registration certificate by the DOLE-NCR in 2004. HHE later on
adopted a resolution for its dissolution and then filed a petition for cancellation of its union
registration. 
PIGLAS filed a petition for certification election which petitioner opposed alleging that the new
union’s officers and members were also those who comprised the old union. Petitioner likewise
alleged that PIGLAS was formed to circumvent the CA’s injunction earlier issued. The Med-
Arbiter nevertheless granted the petition for certification election. 
 
Petitioner filed a petition to cancel PIGLAS’ registration, claiming that the documents submitted
with the union’s application for registration bore the following false information:
 The List of Members showed that the PIGLAS union had 100 union members; 
  The Organizational Minutes said that 90 employees attended the meeting on
December 10, 2003; 
 The Attendance Sheet of the meeting of December 10, 2003 bore the signature of  
127 members who ratified the union’s Constitution and By-Laws; and
 The Signature Sheet bore 128 signatures of those who attended that meeting.  
Petitioner alleged that the misrepresentation was evidenced by the discrepancy in the number of
union members appearing in the application and the list as well as the number of signatories to
the attendance and signature sheets. The minutes reported only 90 employees attended the
meeting. Petitioner also alleged that 33 members of PIGLAS were members of HHE, which is in
violation of the policy against dual unionism. 
 
DOLE-NCR: denied petitioner’s petition to cancel PIGLAS’ registration because the
discrepancies in the number of members in the application’s supporting documents were not
material and did not constitute misrepresentation. The dual unionism is also not a ground for
canceling registration, since the members of HHE simply exercised their right to self-
organization and freedom of association when they joined PIGLAS. The Bureau of Labor
Relations affirmed the DOLE-NCR, by reasoning that PIGLAS’ organization meeting lasted for
12 hours. Thus, it was possible for the number of attendees to have increased as the meeting
progressed. Besides, the union only needed 50 members of the total of 250 employees in the
bargaining unit to comply with the 20% membership requirement. Petitioner filed a petition for
certiorari with the Court of Appeals but it was denied as well as petitioner’s motion for
reconsideration. Hence, this petition for review under Rule 45.
 
ISSUES:
1. Whether or not the union made fatal misrepresentation in its application for union registration
–NO.
2. Whether or not dual unionism is a ground for canceling a union’s registration –NO.
 
HELD: 
19
1. Petitioner has no evidence of the alleged misrepresentation. The discrepancies alone cannot
be taken as indication that PIGLAS misrepresented the information contained in these
documents. Charges of fraud and misrepresentation should be clearly established by evidence
and surrounding circumstances because once it is proved, the labor union acquires none of the
rights accorded to registered organizations. 
The discrepancies can be explained. While it appears that in the minutes of the December 10,
2003 organizational meeting, only 90 employees responded to the roll call at the beginning, it
cannot be assumed that such number could not grow to 128 as reflected on the signature sheet
for attendance. The meeting lasted 12 hours from 11:00am to 11:00pm. There is no evidence
that the meeting hall was locked up to exclude late attendees. As to the fact that only 127
members ratified the union’s constitution and by-laws when 128 signed the attendance sheet, it
cannot be assumed that all those who attended approved of such. Any member had the right to
hold out and refrain from ratifying those documents or to simply ignore the process.  The Labor
Code and its implementing rules do not require that the number of members appearing on the
documents in question should completely dovetail.  For as long as the documents and
signatures are shown to be genuine and regular and the constitution and by-laws democratically
ratified, the union is deemed to have complied with registration requirements.     registration may be canceled or the union may be decertified as the bargaining unit, in which
 
The discrepancy in the list of members (showing only 100 members) and the signature and
attendance sheets (showing 127 or 128 members) submitted is immaterial. A comparison of the
documents shows that except for six members, the names found in the list are also in the
attendance and signature sheets. PIGLAS more than complied with the 20% requirement since
only 50 employees out of 250 employees in the bargaining unit were required to unionize.  it is not enough to show that the union includes ineligible employees in its membership. It must
 
Labor laws are liberally construed in favor of labor especially if doing so would affirm its
constitutionally guaranteed right to self-organization. PIGLAS union’s supporting documents
reveal the unmistakable yearning of petitioner company’s rank and file employees to organize.   constitution or by-laws, among other documents.
This yearning should not be frustrated by inconsequential technicalities.
2. NO. The right of any person to join an organization also includes the right to leave that
organization and join another one.HHE union ceased to exist, its certificate of registration being
already cancelled.  of the organizational meeting. However these evidence was presented seven months after the
S.S. Ventures International, Inc. v. S.S. Ventures Labor Union (SSVLU), G.R. No. 161690,
July 23, 2008.
FACTS:
Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA- registered export firm with
principal place of business at Phase I-PEZA- Bataan Export Zone, Mariveles, Bataan, is in the
business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union (Union) is a
labor organization registered with the DOLE.
March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in behalf
of the rank-and-file employees. August 21, 2000, Ventures filed a Petition to cancel the Union’s
certificate of registration alleging that the Union deliberately and maliciously included the names
of more or less 82 former employees no longer connected with Ventures in its list of members
who attended the organizational meeting and in the adoption/ratification of its constitution and
by-laws; that No organizational meeting and ratification actually took place; and the Union’s
application for registration was not supported by at least 20% of the rank-and-file employees of
Ventures.
Regional Director of DOLE- Region III favored Ventures and resolved to Cancel the Certificate of
the union. On appeal, the BLR Director granted the Union’s appeal and reversing the decision of
RD. Ventures went to the CA. The CA dismissed Ventures’ petition as well as the MR. Hence,
this petition for review
ISSUE:
Whether the registration of the Union must be cancelled.
RULING:
NO. The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of the
Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the
Labor Code, shall not be abridged. Once registered with the DOLE, a union is considered a
legitimate labor organization endowed with the right and privileges granted by law to such
organization. While a certificate of registration confers a union with legitimacy with the
concomitant right to participate in or ask for certification election in a bargaining unit, the
case the union is divested of the status of a legitimate labor organization. Among the grounds for
cancellation is the commission of any of the acts enumerated in Art. 239(a) of the Labor Code,
such as fraud and misrepresentation in connection with the adoption or ratification of the union’s
constitution and like documents. The Court, has in previous cases, said that to decertify a union,
also be shown that there was misrepresentation, false statement, or fraud in connection with the
application for registration and the supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the minutes of ratification of the
The evidence presented by Ventures consist mostly of separate hand-written statements of 82
employees who alleged that they were unwilling or harassed signatories to the attendance sheet
union filed its petition for cancellation of registration. Hence these statements partake of the
nature of withdrawal of union membership executed after the Union’s filing of a petition for
certification election on March 21, 2000. We have said that the employees’ withdrawal from a
labor union made before the filing of the petition for certification election is presumed voluntary,
while withdrawal after the filing of such petition is considered to be involuntary and does not
affect the same. Now then, if a withdrawal from union membership done after a petition for
certification election has been filed does not vitiate such petition, it is but logical to assume that
such withdrawal cannot work to nullify the registration of the union. The Court is inclined to
agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded
that the affidavits of retraction of the 82 members had no evidentiary weight.
The registration or the recognition of a labor union after it has submitted the corresponding
papers is not ministerial on the part of the BLR. It becomes mandatory for the BLR to check if
the requirements under Art. 234 of the Labor Code have been sedulously complied with. If the
union’s application is infected by falsification and like serious irregularities, especially those
appearing on the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. The issuance to the Union of Certificate of
Registration, in the case at bar, necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating irregularities.
20
The relevance of the 82 individuals’ active participation in the Union’s organizational meeting
and the signing ceremonies thereafter comes in only for purposes of determining whether or not
the Union, even without the 82, would still meet what Art. 234(c) of the Labor Code requires to
be submitted, requiring that the union applicant must file the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining unit where it
seeks to operate.
In its union records on file with this Bureau, respondent union submitted the names of 542
members. This number easily complied with the 20% requirement, be it 1,928 or 2,202
employees in the establishment. Even subtracting the 82 employees from 542 leaves 460 union
members, still within 440 or 20% of the maximum total of 2,202 rank-and-file employees of the
employer Venture.
Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is
better addressed in the inclusion-exclusion proceedings during a pre-election conference. The
issue surrounding the involvement of the 82 employees is a matter of membership or voter
eligibility. It is not a ground to cancel union registration.
For fraud and misrepresentation to be grounds for cancellation of union registration under Article
239, the nature of the fraud and misrepresentation must be grave and compelling enough to
vitiate the consent of a majority of union members.
Air Philippines Corporation v. Bureau of Labor relations, G.R. No. 155395, June 22, 2006
FACTS:
The case initially centered on the union registration of respondent Air Philippines Flight
Attendants Association (APFLAA). APFLAA filed on 17 March 1999 a petition for certification
election as the collective bargaining representative of the flight attendants of APC. After the
Med-Arbiter rendered a ruling ordering the holding of a certification election, such election was
held on 5 August 1999, with majority of the votes cast in favor of APFLAA.
On 25 November 1999, APC filed a Petition for De-Certification and Cancellation of Union
Registration against APFLAA with the DOLE. APC alleged that APFLAA could not be registered
as a labor organization, as its composition consisted of "a mixture of supervisory and rank-and-
file flight attendants." Particularly, APC alleged that flight attendants holding the position of "Lead
Cabin Attendant," which according to it is supervisory in character, were among those who
comprised APFLAA.
On 18 July 2001, the DOLE-National Capital Region (NCR) Regional Director Alex E. Maraan
rendered a Decision dismissing the petition. The DOLE-NCR held that Article 245 of the Labor
Code, which states that supervisory employees are not eligible for membership in labor
organizations of rank-and-file employees, does not provide a ground for cancellation of union
registration, which is instead governed by Article 239 of the Labor Code. 3
APC filed a Motion for Reconsideration/Appeal regarding this Decision of the DOLE-NCR. In a
Resolution dated 18 July 2001, the Bureau of Labor Relations (BLR) denied the appeal,
affirming the rationale of the DOLE-NCR.4
APC then immediately filed a Petition for Certiorari with the Court of Appeals, imputing grave
abuse of discretion on the part of the BLR in denying its appeal. However, the petition was
dismissed outright by the Court of Appeals on the ground that APC had "failed to avail of the
remedy of a prior Motion for Reconsideration" before the filing of the certiorari petition, which
step, it stressed, is a "condition sine qua non to the filing of a petition for certiorari."5
APC filed a Motion for Reconsideration dated 5 February 2002, but this too was denied by the
Court of Appeals in a Resolution dated 13 September 2002. This time, the appellate court ruled
that the Motion for Reconsideration was "totally defective," for failing to contain the proof of
service or registry return receipts to the respondents. The Court of Appeals even noted that the
Affidavit of Service attached to the Motion for Reconsideration "failed to indicate the registry
return receipts of the registered mails to the respondents."6
Hence, the present petition.
APC argues that its petition before the Court of Appeals involved mere questions of law, among
which is whether APFLAA’s union registration may be cancelled considering that the union is
allegedly composed of a mixture of supervisory and rank-and-file employees. It is posited that
questions of law may be raised directly in a petition for certiorari without need of a prior motion
for reconsideration.
However, it is clear from the petition filed by APC before the Court of Appeals that the issues
involved do not consist of questions of law only. It is insisted therein that employees holding the
position of Lead Cabin Attendants are supervisory employees and hence disallowed from joining
a union of rank-and-file employees.8 On the other hand, APFLAA countered before the DOLE-
NCR and the BLR that only rank-and-file flight attendants comprised its membership. 9 Thus, the
very question of whether Lead Cabin Attendants are indeed supervisory employees appears to
be factual in nature, the proper resolution of which necessitates a factual determination of the
actual duties of Lead Cabin Attendants. Indeed, APC made reference therein to such documents
as an employee’s manual in support of its argument, 10 documents that would evidently require
factual evaluation before accorded proper evidentiary value.
There is admittedly some leeway for the Court of Appeals if it was so minded to give due course
to APC’s petition, notwithstanding the failure to file a motion for reconsideration. Yet ultimately,
the determination of whether or not to admit a petition attended with such defect falls within the
sound discretion of the Court of Appeals.
Should the Court of Appeals decide, as it did, to dismiss the petition outright on such ground, it
would commit no reversible error of law nor any grave abuse of discretion, considering that the
rule requiring the filing of a motion for reconsideration before resorting to the special civil action
of certiorari is well entrenched in jurisprudence.
It also does not escape the attention of the Court that the Motion for Reconsideration filed by
APC before the Court of Appeals was itself fatally defective, allowing the appellate court to deny
21
the same without having to evaluate its substantial arguments. The action of the appellate court
relative to APC’s missteps is consistent with procedural rules.
Still, the Court has deigned to give a close look at the substantial arguments raised in APC’s
petition before the Court of Appeals.
ISSUE: Whether or not the APFLAA could be registered
HELD: Yes.
The DOLE-NCR Regional Director, in dismissing the petition for cancellation, cited our minute
resolution in SPI Technologies Incorporated v. DOLE wherein the Court observed that Article
245 of the Labor Code, the legal basis for the petition for cancellation, merely prescribed the
requirements for eligibility in joining a union and did not prescribe the grounds for cancellation of
union registration.13 Since the filing of this petition, the Court has had occasion to rule, in
Tagaytay Highlands International Golf Club v. Tagaytay Highlands Employees Union-PGTWO,14
that "[t]he inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and (c) of Article 239 15 of the Labor Code."
Clearly then, for the purpose of de-certifying a union, it is not enough to establish that the rank-
and-file union includes ineligible employees in its membership. Pursuant to Article 239 (a) and
(c) of the Labor Code, it must be shown that there was misrepresentation, false statement or
fraud in connection with the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, or in connection with the election of officers,
minutes of the election of officers, the list of voters, or failure to submit these documents
together with the list of the newly elected-appointed officers and their postal addresses to the
BLR.17
In its Petition for De-certification and Cancellation of Union Registration, APC did not impute on
APFLAA such misrepresentation of the character necessitated under Article 239 (a) and (c) of
the Labor Code. APC merely argued that APFLAA was not qualified to become a legitimate
labor organization by reason of its mixed composition of rank-and-file and supervisory
employees; and that APFLAA committed misrepresentation by making it appear that its
composition was composed purely of rank-and-file employees. Such misrepresentation (if it can
be called as such) as alleged by APC, is not conformable to Article 239 (a) and (c) of the Labor
Code. Indeed, it appears from the record that APC instead devoted the bulk of its arguments in
establishing that supervisory employees comprised part of the membership of APFLAA, a
ground which is not sufficient to cause the cancellation of union registration. And this is of
course all under the assumption that Lead Cabin Attendants are indeed supervisory employees,
a claim consistently denied by APFLAA and which was not confirmed by either the DOLE-NCR
or the BLR.
There may be remedies available to enforce the proscription set forth in Article 245 of the Labor
Code on supervisory employees joining the union of rank-and-file employees. But consistent
with jurisprudence, the rule under Article 245 barring supervisory employees from joining the
union of rank-and-file employees is not a ground for cancellation of union registration.
Accordingly, we see no error on the part of the DOLE-NCR and the BLR in having dismissed
APC’s petition, and thus no cause to compel the Court of Appeals to disregard APC’s procedural
errors and accept the petition for certiorari.
c. Reportorial Requirements
ART. 252. [242-A] Reportorial Requirements.194 The following are documents required to be
submitted to the Bureau by the legitimate labor organization concerned:
a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days
from adoption or ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days
from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union
registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
6. Foreign Activities
• Articles 284; 285; and 286, Labor Code.
ART. 284. [269] Prohibition Against Aliens; Exceptions.219 All aliens, natural or juridical, as well
as foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of
trade union activities without prejudice to normal contacts between Philippine labor unions and
recognized international labor centers: Provided, however, That aliens working in the country
with valid permits issued by the Department of Labor and Employment, may exercise the right to
self- organization and join or assist labor organizations of their own choosing for purposes of
collective bargaining: Provided, further, That said aliens are nationals of a country which grants
the same or similar rights to Filipino workers.
ART. 285. [270] Regulations of Foreign Assistance. (a) No foreign individual, organization or
entity may give any donations, grants or other forms of assistance, in cash or in kind, directly or
indirectly, to any labor organization, group of workers or any auxiliary thereof, such as
cooperatives, credit unions and institutions engaged in research, education or communication, in
relation to trade union activities, without prior permission by the Secretary of Labor.
Trade union activities" shall mean:
(1) organization, formation and administration of labor organization;
(2) negotiation and administration of collective bargaining agreements;
(3) all forms of concerted union action;
(4) organizing, managing, or assisting union conventions, meetings, rallies, referenda, teach-ins,
seminars, conferences and institutes;
(5) any form of participation or involvement in representation proceedings, representation
elections, consent elections, union elections; and
(6) other activities or actions analogous to the foregoing.
(b) This prohibition shall equally apply to foreign donations, grants or other forms of assistance,
in cash or in kind, given directly or indirectly to any employer or
(c) The Secretary of Labor shall promulgate rules and regulations to regulate and control the
giving and receiving of such donations, grants, or other forms of assistance, including the
mandatory reporting of the amounts of the donations or grants, the specific recipients thereof,
the projects or activities proposed to be supported, and their duration.
ART. 286. [271] Applicability to Farm Tenants and Rural Workers. The provisions of this Title
pertaining to foreign organizations and activities shall be deemed applicable likewise to all
22
organizations of farm tenants, rural workers and the like: Provided, That in appropriate cases,
the Secretary of Agrarian Reform shall exercise the powers and responsibilities vested by this
Title in the Secretary of Labor.
7. Union-Member Relations
• Articles 250 and 260(a), Labor Code.
ART. 250. [241] Rights and Conditions of Membership in a Labor Organization.192 The
following are the rights and conditions of membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor
organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;
(b) The members shall be entitled to full and detailed reports from their officers and
representatives of all financial transactions as provided for in the constitution and by-laws of the
organization;
(c) The members shall directly elect their officers in the local union, as well as their national
officers in the national union or federation to which they or their local union is affiliated, by secret
ballot at intervals of five (5) years. No qualification requirement for candidacy to any position
shall be imposed other than membership in good standing in subject labor organization. The
secretary or any other responsible union officer shall furnish the Secretary of Labor and
Employment with a list of the newly-elected officers, together with the appointive officers or
agents who are entrusted with the handling of funds within thirty (30) calendar days after the
election of officers or from the occurrence of any change in the list of officers of the labor
organization;
(d) The members shall determine by secret ballot, after due deliberation, any question of major
policy affecting the entire membership of the organization, unless the nature of the organization
or force majeure renders such secret ballot impractical, in which case, the board of directors of
the organization may make the decision in behalf of the general membership;
(e) No labor organization shall knowingly admit as members or continue in membership any
individual who belongs to a subversive organization or who is engaged directly or indirectly in
any subversive activity;
(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for
election as a union officer or for appointment to any position in the union;
(g) No officer, agent or member of a labor organization shall collect any fees, dues, or other
contributions in its behalf or make any disbursement of its money or funds unless he is duly
authorized pursuant to its constitution and by-laws;
192 Article 241, pars. (c) and (j) are shown here as amended by Sec. 16 of R.A. No. 6715
(1989).
(h) Every payment of fees, dues or other contributions by a member shall be evidenced by a
receipt signed by the officer or agent making the collection and entered into the record of the
organization to be kept and maintained for the purpose;
(i) The funds of the organization shall not be applied for any purpose or object other than those
expressly provided by its constitution and by-laws or those expressly authorized by written
resolution adopted by the majority of the members at a general meeting duly called for the
purpose;
(j) Every income or revenue of the organization shall be evidenced by a record showing its
source, and every expenditure of its funds shall be evidenced by a receipt from the person to
whom the payment is made, which shall state the date, place and purpose of such payment.
Such record or receipt shall form part of the financial records of the organization.
Any action involving the funds of the organization shall prescribe after three (3) years from the
date of submission of the annual financial report to the Department of Labor and Employment or
from the date the same should have been submitted as required by law, whichever comes
earlier: Provided, That this provision shall apply only to a legitimate labor organization which has
submitted the financial report requirements under this Code: Provided, further, That failure of
any labor organization to comply with the periodic financial reports required by law and such
rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall
automatically result in the cancellation of union registration of such labor organization;
(k) The officers of any labor organization shall not be paid any compensation other than the
salaries and expenses due to their positions as specifically provided for in its constitution and
by-laws, or in a written resolution duly authorized by a majority of all the members at a general
membership meeting duly called for the purpose. The minutes of the meeting and the list of
participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives. Any irregularities in the approval of the resolutions shall be a ground
for impeachment or expulsion from the organization;
(l) The treasurer of any labor organization and every officer thereof who is responsible for the
account of such organization or for the collection, management, disbursement, custody or
control of the funds, moneys and other properties of the organization, shall render to the
organization and to its members a true and correct account of all moneys received and paid by
him since he assumed office or since the last day on which he rendered such account, and of all
bonds, securities and other properties of the organization entrusted to his custody or under his
control. The rendering of such account shall be made:
(1) At least once a year within thirty (30) days after the close of its fiscal year;
(2) At such other times as may be required by a resolution of the majority of the members of the
organization; and
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished
the Secretary of Labor.
(m) The books of accounts and other records of the financial activities of any labor organization
shall be open to inspection by any officer or member thereof during office hours;
(n) No special assessment or other extraordinary fees may be levied upon the members of a
labor organization unless authorized by a written resolution of a majority of all the members in a
general membership meeting duly called for the purpose. The secretary of the organization shall
record the minutes of the meeting including the list of all members present, the votes cast, the
purpose of the special assessment or fees and the recipient of such assessment or fees. The
record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no special assessments,
from any amount due to an employee without an individual written authorization duly signed by
the employee. The authorization should specifically state the amount, purpose and beneficiary of
the deduction; and
(p) It shall be the duty of any labor organization and its officers to inform its members on the
provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor
relations system and all their rights and obligations under existing labor laws.
For this purpose, registered labor organizations may assess reasonable dues to finance labor
relations seminars and other labor education activities.
Any violation of the above rights and conditions of membership shall be a ground for
cancellation of union registration or expulsion of officers from office, whichever is appropriate. At
least thirty percent (30%) of the members of a union or any member or members specially
concerned may report such violation to the Bureau. The Bureau shall have the power to hear
and decide any reported violation to mete the appropriate penalty.
23
Criminal and civil liabilities arising from violations of above rights and conditions of membership ● As a result, Union declared a deadlock and filed a notice of strike with the National
shall continue to be under the jurisdiction of ordinary courts. Conciliation and Mediation Board -National Capital Region (NCMB-NCR).
● Conciliation and mediation proved to be futile, such that in January 2002, majority of
ART. 260. [249] Unfair Labor Practices of Labor Organizations.205 It shall be unfair labor Union’s members voted to stage a strike.
practice for a labor organization, its officers, agents or representatives: ● However, the DOLE Secretary (SOLE) timely assumed jurisdiction over the dispute, and
(a) To restrain or coerce employees in the exercise of their right to self- organization. However, the parties were summoned and heard on their respective claims, and were required to
a labor organization shall have the right to prescribe its own rules with respect to the acquisition submit their respective position papers.
or retention of membership; ● May 31, 2002: the SOLE issued an Order:
- Given all the foregoing, we cannot follow the Union's formula and in effect disregard
University of Santo Tomas v. Samahang Manggagawa ng UST (SM-UST), G.R. No. 169940, the School's two other bargaining units; to do so is a distortion of economic reality that
September 14, 2009. will not bring about long term industrial peace. We cannot simply adopt the School's
proposal in light of the parties' bargaining history, particularly the pattern of increases
Petitioner: University of Santo Tomas in the last cycle.
Respondent: Samahang Manggagawa ng UST (SM-UST)
- Considering all these, we believe the following to be a fair and reasonable resolution
FACTS: of the wage issue.
● Respondent Union was the authorized bargaining agent of the non-academic/non-teaching 1st Year - P1,000.00/month
rank-and-file daily- and monthly-paid employees (about 619) of Petitioner UST. 2nd Year - P2,000.00/month
● October 2001: During formal negotiations for a new collective bargaining agreement (CBA) 3rd Year - P2,200.00/month
for the academic year 2001 through 2006, UST submitted its "2001-2006 CBA Proposals.” - These increases, at a three-year total of P68,337,600, are less than the three (3)- year
● December 2001: UST submitted its final offer on the economic proposals. The proposals of increases in the last CBA cycle to accommodate the School's proven lack of capacity
Union and UST are compared below: to afford a higher increase, but are still substantial enough to accommodate the
workers' needs while taking into account the symmetry that must be maintained with
UNION UST the wages of the other bargaining units.
- On a straight line aggregate of P5,200.00, the non-academic personnel will receive
A. ACADEMIC YEAR 2001-2002 P498.48 less than an Instructor I (member of the faculty union) who received an
aggregate of P5,698.48, thus maintaining the gap between the teaching and non-
teaching personnel. The salary difference will as well be maintained over the three (3)-
1. Salary increase per month P800.00 P1,000.00
year period of the CBA.
2. Signing bonus P10,000.00 P10,000.00 - An RFI employee (member of the union's bargaining unit) will receive a monthly salary
of P21,695.95 while an Instructor I (faculty union member) will have a salary of
3. Additional Christmas bonus P2,000.00 P2,000.00 P22,948.00; while an RF5-5/A (member of the union's bargaining unit) will receive a
salary of P23,462.97 compared to an Asst. Prof. 1 (faculty) who will receive
B. ACADEMIC YEAR 2002-2003 P29,250.96.
- From a total cost of salary increases for the first year at P7,428,000, these costs will
escalate to P22,284,000 in the second year, and to P38,625,000 at the third year.
1. Salary increase per month P1,500.00 P1,700.00
Given these figures, the amounts available for distribution and the member of groups
2. Additional Christmas bonus P2,000.00 P2,000.00 sharing these amounts, these increases are by no means minimal.
- A review of the past bargaining history of the parties shows that the School as a
3. Salary restructuring P6 million P6.19 million matter of course grants a signing bonus. This ranged from P8,000.00 during the first
three (3) years of the last CBA to P10,000.00 during the remaining two (2) years of the
C. ACADEMIC YEAR 2003-2004 re-negotiated term. In this instance, the School's offer of P10,000.00 signing bonus is
already reasonable considering that the School could have taken the position that no
signing bonus is due on compulsory arbitration in line with the ruling in Meralco v.
1. Salary increase per month P1,700.00 P2,000.00
Quisumbing et al., G.R. No. 127598, 27 January 1999.
2. Additional Christmas bonus P2,000.00 P2,000.00 ● Union filed a motion for reconsideration but it was denied by the SOLE.
● Thus, Union filed an original petition for certiorari with the Court of Appeals, claiming that
the awards made by the SOLE are not supported by the evidence on record and are
● On the other hand, Union reduced its demands for the first year from P8,000.00 monthly contrary to law and jurisprudence.
salary increase per employee to P7,000.00, and from P75,000.00 signing bonus to ● The CA ruled:
P60,000.00 for each employee, but UST insisted on its final offer.

24
 - Based on UST Chief Accountant Antonio J. Dayag's Certification, the tuition fee
increment for the SY 2001-2002 amounted to P101,036,330.37. From this amount, the
tuition fee adjustment amounting to P2,785,143.00 was deducted leaving a net tuition
fee increment of P98,251,189.36.
- Pursuant to Section 5 (2) RA 6728, 70% of P98,251,187.36 or P68,775,831.15 is the
amount UST has to allocate for salaries, wages, allowances and other benefits of its
2,290 employees, categorized as follows:
619 non-teaching personnel represented by UNION;
1,452 faculty members represented by UST-Faculty Union (UST-FU); and
219 academic/administrative officials. The last group of employees is
excluded from the coverage of the two bargaining units.
- Based on the SOLE’s arbitral award for the first year (AY 2001-2002), UNION would
get P15,475,000.00 or 22.5% of P68,775,831.00 (or from the 70% of the tuition fee
increment for AY 2001-2002) by approximating UST's expense on the increment of
salaries/wages, allowances and benefits of the non-teaching personnel. xxx
- The allocation for salary increases, 13th month pay, signing bonus and Christmas
bonus for UST's teaching and non-teaching employees, as well as the school officials,
amount to P68.475 million. This represents almost 70% of the UST incremental tuition
fee proceeds for AY 2001-2002. Considering the fringe benefits being extended to
UST employees, it is safe to assume that the fringe benefits being extended to UST
employees, it is safe to assume that the funds for such benefits need to be sourced
from UST's other revenues. xxx We examined UST audited financial statements from
1997 to 2001 and found that UST's "other incomes" come from parking fees, rent
income and interest income. It, likewise, derives income from school operations. xxx
- Even if the other benefits of the faculty members were to be charged from the
remaining balance of the Accumulated Excess of Revenues Over Expenses, there
would still be sufficient amount to fund the other benefits of the non-teaching
personnel. xxx
- However, while We subscribe to UST's position on "salary distortion", Our earlier
findings support UST's contention that the UST has substantial accumulated income
and thus, We deem it proper to award an increase, not in salary, to prevent any salary
distortion, but in signing bonus. The arbitral award of P10,000 signing bonus per
employee awarded by public Union is hereby increased to P18,000.00.
● UST filed an MR, which was denied. Hence, this petition.
ISSUES:
1. WON the CA gravely abused its discretion when it ruled that the members of Union
did not voluntarily and knowingly accept the arbitral award of the SOLE. - NO
2. WON the CA has completely ignored the clear mandate and intention of RA 6728
otherwise known as the Government Assistance to Students and Teachers in Private
Education Act. - The SC need not rule on this issue.
3. WON the CA gravely abused its discretion when it increased the signing bonus from
P10,000.00 to P18,000.00. - YES
HELD:
1. NO, the CA did not. UST alleges that, as of December 11, 2002, 526 regular non-academic
employees - out of a total of 619 members - have decided to unconditionally abide by the
May 31, 2002 Order of SOLE. UST claims that it began paying the wage adjustment and
other benefits pursuant to the SOLE Order; and that to date, 572 out of the 619 members
have been paid. UST argues that by their acceptance of the award and the resulting
payments made to them, the said Union members have ratified its offer and thus rendered
moot the case before the CA.
- Union echoes the CA ruling that they are not precluded from receiving additional
benefits that the courts may award later on, bearing in mind that – “the employer and
the employee do not stand on the same footing. Considering the country's prevailing
economic conditions, the employee oftentimes finds himself in no position to resist
money proffered, thus, his case becomes one of adherence and not of choice.
- Union’s members were merely constrained to accept payment at the time. Christmas
was then just around the corner, and the Union members were in no position to resist
the temptation to accept much-needed cash for use during the most auspicious
occasion of the year. Time and again, we have held that necessitous men are not,
truly speaking, free men; but to answer a present emergency, will submit to any terms
that the crafty may impose upon them.
- Besides, as individual components of a Union possessed of a distinct and separate
corporate personality, Union’s members should realize that in joining the organization,
they have surrendered a portion of their individual freedom for the benefit of all the
other members; they submit to the will of the majority of the members in order that
they may derive the advantages to be gained from the concerted action of all. Since
the will of the members is personified by its board of directors or trustees, the
decisions it makes should accordingly bind them. Precisely, a labor Union exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment. What the individual employee may
not do alone, as for example obtain more favorable terms and conditions of work, the
labor organization, through persuasive and coercive power gained as a group, can
accomplish better.
2. The SC need not rule on this issue . UST argues that the CA erred in ordering it to source
part of its judgment award from the school's other income, claiming that RA 6728 does not
compel or require schools to allocate more than 70% of the incremental tuition fee increase
for the salaries and benefits of its employees. Citing an authority in education law
(Sarmiento III), it stresses that: "...if schools use any part of the 20% reserved for the
upgrading of school facilities to supplement the salaries of their academic and non-
academic personnel, they would not only be violating the students' constitutional right to
quality education through "improvement and modernization" but also committing a serious
infraction of the mandatory provisions of RA 6728."
- Union argues that RA 6728 does not provide that the increase or improvement of the
salaries and fringe benefits of the employees should be exclusively funded from the
income of UST which is derived from the increase in tuition fees. In fact, the statute
has no application with respect to the manner of disposition of the other incomes (as
distinguished from income derived from tuition fee increases) of UST, nor does it
preclude or exempt the latter from using its other income or part thereof to fund the
cost of increases or improvements in the salaries and benefits of its employees.
- The SC finds it unnecessary to rule on this matter. These fringe benefits are included
in the DOLE Secretary's award - an award which UST seeks to affirm in toto; this
being so, it cannot now argue otherwise. Since it abides by the DOLE Secretary's
award, which it finds "fair and equitable," it must raise the said amount through
sources other than incremental tuition fee proceeds.
3. YES, the CA did. UST contends that the CA’s award of additional signing bonus is contrary
to the nature and principle behind the grant of such benefit, which is one given as a matter
25
 of discretion and cannot be demanded by right, a consideration paid for the goodwill that
existed in the negotiations, which culminate in the signing of a CBA. UST claims that since
this condition is absent in the parties' case, it was erroneous to have rewarded UNION with
an increased signing bonus.
- Union argues that since no strike or any untoward incident occurred, goodwill between
the parties remained, which entitles UNION's members to receive their signing bonus.
Besides, UNION asserts that since UST did not appeal the DOLE Secretary's award, it
may not now asserts that since UST did not appeal the DOLE Secretary's award, it
may not now argue against its grant, the issue remaining being the propriety of the
awarded amount; that is, whether or not it was proper for the CA to have raised it from
P10,000.00 to P18,000.00.
- A signing bonus is a grant motivated by the goodwill generated when a CBA is
successfully negotiated and signed between the employer and the Union. Here, no
CBA was successfully negotiated by the parties. It is only because UST prays for this
Court to affirm in toto the SOLE’s Order that we shall allow an award of signing bonus.
There would have been no other basis to grant it if UST had not so prayed. We shall
take it as a manifestation of UST's liberality, which we cannot now allow it to withdraw.
A bonus is a gratuity or act of liberality of the giver; when UST filed the instant petition
seeking the affirmance of the SOLE’s Order in its entirety, assailing only the increased
amount of the signing bonus awarded, it is considered to have unqualifiedly agreed to
grant the original award to UNION's members.
WHEREFORE, the petition is PARTIALLY GRANTED. The signing bonus of EIGHTEEN
THOUSAND PESOS (P18,000.00) per member of respondent Samahang Manggagawa ng
U.S.T. as awarded by the Court of Appeals is REDUCED to TEN THOUSAND PESOS
(P10,000.00). All other findings and dispositions made by the Court of Appeals in its January 31,
2005 Decision and September 23, 2005 Resolution in CA-G.R. SP No. 72965 are AFFIRMED.
UST Faculty Union (USTFU) v. Bitonio, G.R. No. 131235, November 16, 1999.
Petitioners: UST Faculty Union (Ustfu), Gil Y. Gamilla, Corazon Qui, Norma Calaguas, Irma
Potenciano, Luz De Guzman, Remedios Garcia, Rene Arnejo, Editha Ocampo, Cesar Reyes,
Celso Nierra, Gliceria Baldres, Ma. Lourdes Medina, Hidelita Gabo, Mafel Ysrael, Laura Abara,
Natividad Santos, Ferdinand Limos, Carmelita Espina, Zenaida Famorca, Philip Aguinaldo,
Benedicta Alava and Leoncio Casal
Respondents: Dir. Benedicto Ernesto R. Bitonio Jr. of The Bureau of Labor Relations, Med-
Arbiter Tomas F. Falconitin of the National Capital Region, Department of Labor And
Employment (DOLE), Eduardo J. Mariño Jr., Ma. Melvyn Alamis, Norma Collantes, Urbano
Alabagia, Ronaldo Asuncion, Zenaida Burgos, Anthony Cura, Fulvio M. Guerrero, Myrna Hilario,
Teresita Meer, Fernando Pedrosa, Nilda Redoblado, Rene Sison, Evelyn Tirol and Rosie
Alcantara
FACTS:
● Private Respondents are duly elected officers of the UST Faculty Union (USTFU)
● The secretary general of USTFU posted a notice addressed to all USTFU members
announcing a general assembly to be held on 05 October 1996
- Among others, the general assembly was called to elect USTFU's next set of officers.
● On 02 October 1996, the secretary general of UST, upon the request of the various UST
faculty club presidents, issued notices allowing all faculty members to hold a convocation
on 04 October 1996
- Denominated as a general faculty assembly, the convocation was supposed to
discuss the "state of the unratified USTUSTFU CBA" and "status and election of
USTFU officers"
● The convocation was held as scheduled (Oct. 4, 1996)
- The general assembly was attended by members of the USTFU and, as admitted by
the appellants, also by "nonUSTFU members who are members in good standing of
the UST Academic Community Collective Bargaining Unit"
- On this occasion, appellants were elected as USTFU's new set of officers by
acclamation and clapping of hands
- Upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the
USTFU Constitution and By-Laws (CBL) and "the rules of the election be suspended
and that the election be held [on] that day"
● Respondents filed the instant petition seeking injunctive reliefs and the nullification of the
results
● Subsequently, petitioners and UST allegedly entered into another CBA covering the period
from 01 June 1996 to 31 May 2001
● The med-arbiter issued a TRO against petitioners
● Public respondent, director of the BLR agreed with the med-arbiter that the Oct. 4 election
was void
ISSUES:
1. WON the October 4 election was valid. – NO
2. WoN the suspension of the CBL was valid. – NO
HELD:
1. The election was not valid
● The right to vote in the union is enjoyed only by union members
- A union election should be distinguished from a certification election, which is the
process of determining, through secret ballot, the sole and exclusive bargaining agent
of the employees in the appropriate bargaining unit, for purposes of collective
bargaining
- Specifically, the purpose of a certification election is to ascertain whether or not a
majority of the employees wish to be represented by a labor organization and, in the
affirmative case, by which particular labor organization
- In a certification election, all employees belonging to the appropriate bargaining unit
can vote
- A union member who likewise belongs to the appropriate bargaining unit is entitled to
vote in said election. However, the reverse is not always true; an employee belonging
to the appropriate bargaining unit but who is not a member of the union cannot vote in
the union election, unless otherwise authorized by the constitution and bylaws of the
union.
- In this case, non-members participated in the assembly and in the voting
● The election did not follow the procedures imposed by the CBL
- The union's CBL is the fundamental law that governs the relationship between
and among the members of the union. It is where the rights, duties and obligations,
powers, functions and authority of the officers as well as the members are defined
- First, the assembly was not called by the USTFU. It was merely a convocation of
faculty clubs, It was not convened in accordance with the provision on general
membership meetings. It was in fact a gathering that was called and participated in by
management and nonunion members
26
 - Second, there was no commission on elections to oversee the election, as mandated
by Sections 1 and 2 of Article IX of the USTFU's CBL
- Third, the purported election was not done by secret balloting, in violation of Section 6,
Article IX of the USTFU's CBL, as well as Article 241 (c) of the Labor Code
2. The suspension of the CBL was not valid
● Petitioners contend that the October 4, 1996 assembly "suspended" the union's CBL. They
aver that the suspension and the election that followed were in accordance with their
"constituent and residual powers as members of the collective bargaining unit to choose
their representatives for purposes of collective bargaining."
● The general faculty assembly was not the proper forum to conduct the election of USTFU
officers. Not all who attended the assembly were members of the union; some, apparently,
were even disqualified from becoming union members, since they represented
management
● The person who moved for the suspension of USTFU's CBL was not a member of USTFU.
Allowing a nonunion member to initiate the suspension of a union's CBL, and nonunion
members to participate in a union election on the premise that the union's CBL had been
suspended in the meantime, is incompatible with the freedom of association and protection
of the right to organize
● The grievances of the petitioners could have been brought up and resolved in accordance
with the procedure laid down by the union's CBL
WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED.
Costs against petitioners.
Heirs of Teodolo M. Cruz v. Court of Industrial Relations, G.R. No. L-23331, December 27,
1969.
Petitioners: Heirs of Teodolo M. Cruz, Mary Concepcion and Edgardo Cruz (counsel of the
Union, not the 49 Union members – petitioners in a separate case consolidated with this one)
King Hongs: Court of Industrial Relations (CIR), Santiago Rice Mill and King Hong and
Company
FACTS:
● June 21, 1952: The Santiago Labor Union, composed of workers of the Santiago Rice Mill,
a business enterprise engaged in the buying and milling of palay at Santiago, Isabela, and
owned and operated by King Hong Co., Inc. (King Hong), filed before the CIR a petition for
overtime pay, premium pay for night, Sunday and holiday work, and for reinstatement of
workers illegally laid off.
● The total sum claimed by the workers, P100,816.36 for overtime pay, P19,350.00 for
premium pay and P3,360.00 for differential pay under the Minimum Wage Law - amounted
to P123,526.36.
● September 19, 1958: The CIR, thru Judge Emiliano G. Tabigne, dismissed the petition of
the union for lack of merit and want of jurisdiction.
● Upon a motion for reconsideration, the CIR en banc, by a split decision of 3-2 vote,
reversed the decision of the trial judge.
● The Supreme Court affirmed the CIR en banc decision and remanded the records for
enforcement by the CIR.
● The Chief Examiner filed with the CIR his Partial Report of December 14, 1962, wherein
the judgment award in favor of the workers was determined and computed as totaling
PHP423,756.74. Both the union members and King Hong opposed the report.
● Judge Tabigne, as the trial judge, ordered a hearing thereon on December 22, 1962, as a
condition precedent to execution of the judgment. Such Report was submitted for resolution
and approval at the hearing of December 22, 1962, but the records before us fail to show
that the trial judge ever acted on or approved the Report.
● Before and after the submittal of the Chief Examiner's Report of December 14, 1962, the
union pressed for execution of the final judgment in favor of its claimants-members.
- It filed, furthermore, on December 20, 1962, an Urgent Motion for Preliminary
Attachment, in view of the disposition by King Hong of its trucks and automotive
equipment and by virtue of the fact admitted by King Hong that it had stopped
operations preparatory to liquidation, by reason of the alien nationality of most of its
stockholders, under the provisions of Republic Act No. 3018 nationalizing the rice and
corn industry.
- In another motion of December 4, 1962, the union had asked that the CIR at least
order King Hong to put up a bond of P500,000.00 to answer for the payment of the
judgment or to deposit said amount in Court.
● The 49 union members-petitioners assert that these motions were left hanging until the
union filed a mandamus petition with this Court (not the present case).
● The trial judge issued and released on April 15, 1963 the Deposit Order dated March 30,
1963, ordering King Hong, within 10 days from its finality, to deposit in Court P100,000.00
and to file a surety bond of equal amount, "to guarantee the payment of whatever amount
(a) due petitioner (union) and its members concerned after this Court shall have finally
decided the obligation of herein King Hongs under the judgment." This Order was affirmed
by the CIR en banc, in its Resolution denying King Hong's motion for reconsideration.
● King Hong sought a review of the Deposit Order. The Supreme Court, in its Resolution of
September 20, 1963, dismissed for lack of merit the petition for review, and the dismissal
became final on October 24, 1963.
● Earlier, on June 25, 1963: King Hong had offered the Union the maximum amount of
P110,000.00 in full settlement of its obligations to the members-claimants of the Union
under the judgment, but the union rejected the offer and counter-offered the minimum
amount of P200,000.00.
● The union meanwhile filed to no avail a series of urgent motions on May 8, July 1, August
29 and September 6, 1963 for approval of the Chief Examiner's Partial Report of December
14, 1962 and for enforcement, through a writ of execution or contempt proceedings, of the
Deposit Order.
● Upon the finality of the Supreme Court’s Resolution dismissing King Hong’s petition for a
review of the Deposit Order, the union again filed on October 29, 1963 still another Urgent
Motion, advising the trial judge of the SC's action rejecting King Hong’s appeal and invoking
the CIR’s ministerial duty of enforcing its said Order. The trial judge took no action on this
latest Urgent Motion of the union.
● Instead, an unscheduled conference was called and held on October 31, 1963 in the
chambers of the trial judge, and attended by representatives of King Hong, including their
counsels of record, on one hand and Segundino S. Maylem, president of the union and
eight directors of the union, on the other. Four of these nine union representatives,
including the union president himself, had no claims or awards whatever under the
judgment. Said union officials were not assisted by counsel, as petitioner Mary Concepcion,
counsel of record of the union, was not present, not having been notified of the conference.
At this conference, King Hong made again the same offer to settle and quitclaim the
judgment in favor of the union members for P110,000.00. But this time, as appears from
the transcript of the conference, King Hong and the directors of the union decided to settle
the case amicably with the payment by King Hong of the same amount of P110,000.00
27
 which was deposited with the Court's disbursing officer immediately upon the signing of the
settlement which will be prepared by King Hong through its counsel.
● Petitioner Natividad Magalpo, a director of the union, together with petitioners Lydia Bulos
and Paciencia Batoon, both union members-claimants, filed on November 5, 1963, their
verified "Manifestation and Objection with Ex- Parte Urgent Motion", relating what
transpired at the conference, charging the union president, Maylem, with bad faith in that
he never previously advised the union representatives that the conference of October 31,
1963 was to discuss a compromise settlement nor that the Supreme Court’s resolution
dismissing King Hong’s appeal from the Deposit Order had already become final, and
asking the trial judge to shelve the proposed settlement until King Hong shall have
complied with the said deposit order.
● These petitioners further filed on November 4, 1963 an urgent Ex-parte Motion for the
issuance of a writ of execution for the enforcement of the Deposit Order against King Hong,
and asked the trial judge to act on their two urgent motions upon receipt thereof.
● Both urgent motions were totally ignored by both the trial judge as well as by King Hong,
despite due notice on the latter.
● The request of the union president, Maylem, at the October 31, 1963 conference that the
trial judge have the union counsel present during the proposed signing of the settlement
agreement set for November 8, 1963, as expressly noted by the trial judge, was likewise
ignored.
● Notwithstanding that notice of the conference set for November 8, 1963 at 2:30 p.m. was
served on November 5, 1963 on the union counsel, petitioner Mary Concepcion, the
scheduled conference was never held.
● Unexplainedly, Maylem, the union president and nine other members of the union's board
of directors (out of 13 board members) had earlier executed a "Settlement" on November 8,
without the knowledge, advice, and conformity of the union counsel, with King Hong's
attorney-in-fact, who was duly assisted by King Hong’s two counsels, who likewise
executed the "Settlement." In this "Settlement", the said union officials claiming to act “with
the authorization of the Board of Directors and its members," in consideration of the sum of
P110,000.00, or one-fourth of the estimated P423,756.74-judgment liability of King Hong,
“waived and quitclaimed…any and all claims it (the union) may have against King Hong as
well as the claim of each and every one of the members of the…union against the…firm.”
The union further "warranted" in said “Settlement" "that aside from the petitioner (union)
itself and the members thereof, there are no other persons who have any interest over the
judgment debt and that if it should happen that other persons shall make a claim against
[King Hong] and/or said judgment debt, that [King Hong], nevertheless, shall no longer be
liable therefor."
● The “Settlement" was immediately submitted to the trial judge who forthwith on the same
day, November 8, 1963, issued his Order, approving the same, and entered into CIR’s
records at 1:45 p.m. of the same day.
● Petitioners-lawyers Mary Concepcion et al. upon learning of the "Settlement" and King
Hong’s deposit with the CIR of the sum of P110,000.00 in pursuance thereof filed in the
afternoon of November 8, 1963 a motion for withdrawal of the sum of P33,000.00
equivalent to their 30% contingent fee, without prejudice to such action as they may take
for enforcing their lien to its full extent. The trial judge granted such motion in its Order of
November 9, 1963.
● In due course, petitioners-lawyers moved for reconsideration and setting aside of the trial
judge's Order of November 8, 1963 approving the "Settlement" and prayed the CIR en banc
to reinstate the judgment against King Hong and to enforce the Deposit Order
● Petitioners Magalpo, Bulos and Batoon, likewise moved CIR en banc to reconsider and set
aside the trial judge's approval of the "Settlement", in disregard of their objection and
pending motions of November 5, 1963 to shelve the proposed settlement and to enforce
the Deposit Order.
● December 26, 1963: They were joined in their plea for reconsideration by 47 other union
members-claimants, Co-petitioners at bar.
● King Hong filed its opposition to the motions for reconsideration, questioning the personality
and interest of petitioners-movants Magalpo and her 2 other co-movants and asserting that
they were bound by the "Settlement" entered into by their union's board of directors. It
alleged that it had deposited with the CIR the sum of P110,000.00 stipulated in the
“Settlement" on the same day of its approval by the trial judge. It filed with the CIR on
November 21, 1963 a letter of ratification dated November 10, 1963 addressed to the trial
judge and purportedly signed by some 79 union members-claimants confirming and
accepting the settlement executed by the union board.
● Petitioners list 21 of these signatures as questionable, asserting that they are at variance
with other corresponding signatures in the Payroll dated November 8, 1963 submitted to
the CIR on November 21, 1963, such that "either one or the other signature is a forgery."
● King Hong counters that there is "absolutely no truth to the claim" and that the signers of
the ratification letter “have all received their individual shares of the P110,000.00 settlement
paid by [King Hong] and this in itself is a ratification on their part of said settlement."
● Nothing appears in the record, however, as to whether and in what manner King Hong
Court determined the authenticity of the signatures.
● King Hong further filed on December 18, 1963 a motion for reconsideration of the trial
judge's Order approving payment of P33,000.00 to the petitioners-attorneys by way of
attorneys' fees.
● On August 1, 1964, and August 4, 1964, they were served with copies of the CIR’s en banc
Resolution dated March 9, 1964, penned by the trial judge, “finding no sufficient
justifications to set aside, disturb or modify the Order issued in these cases on November 8
and 9, 1963" and denying all three motions for reconsideration. Judges Amando C.
Bugayong and Ansberto F. Paredes concurred under date of July 29, 1964 with the
Resolution, while Judge Arsenio Martinez took no part. No statement of the material
allegations of, and issues raised in, the pertinent pleadings set out in detail hereinabove nor
reasons for the conclusion of insufficient justification reached by the majority resolution are
given therein.
● Then Presiding Judge Jose S. Bautista dissented. "Taking into account the precipitate
approval of settlement over the objection of some union members concerned and without
hearing them, on the strength simply of the manifestation of the petitioner's Board of
Directors that it had authority to compromise when previously said union members
concerned had already manifested in Annex "E" that there was no such authority," he voted
"that the case be restored to the status quo as of October 30, 1963, but the payment
already made to the union members be considered as partial payments on account, subject
to final liquidation and adjustment; that an order of execution of the judgment in cases Nos.
G.R. L-21758 and L-21759 of the Supreme Court be issued (upholding the Order of March
30, 1963 for deposit of P200,000.00 in cash and surety bond) be issued and that the
Hearing Officer shall resume the hearing of the Examiner's Report."
● Hence, the appeals of petitioners.
● The Santiago Labor Union filed its Answer “putting its weight behind the prayers of the
petitioners." The Answer reveals that the union members, feeling betrayed, had
disauthorized and removed from office Maylem, the union president and his board of
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 directors who had executed the "Settlement" with King Hong and disclaimed the documents
of ratification that they had signed at the behest of Maylem.
ISSUE: WON the Supreme Court can sanction the CIR’s majority resolution upholding the trial
judge's approval of the union board's settlement for P110,000.00 of the estimated P423,756.74 -
judgment liability of King Hong in favor of the individual union member.
HELD: NO.
● The precipitate approval of the purported settlement under the circumstances goes against
the grain of fundamental considerations of justice, equity and due process.
● Petitioners were not accorded due process of law, when, for reasons unexplained in the
record, the conference set for November 8, 1963 at 2:30 p.m. to take up formally the
proposed settlement was cancelled and never held.
● The lack of due deliberation and caution in the trial judge's instant approval of the
settlement is seen from the stipulations therein that the union thereby waived and
quitclaimed any and all claims which it may have against King Hong, as well as the claim of
each and every one of the members of the union against King Hong, when precisely the
authority of the union board members to enter into any such compromise or settlement was
under express challenge by petitioner Magalpo, a board member herself in her Objection
and Urgent Motion to shelve the settlement filed on November 5, 1963, which the trial judge
completely disregarded.
- Petitioner Magalpo further made serious charges that Maylem, the union president,
had misled the board members into attending the unscheduled conference held on
October 31, 1963 before the trial judge, and had deliberately concealed from them the
fact of entry on October 24, 1963 of the Order of the Supreme Court upholding the
Deposit Order and the effect thereof of making mandatory upon the trial judge, in
accordance with the terms of his own order, the issuance of a writ for execution or
enforcement to compel King Hong to so deposit P100,000.00 in cash and an equal
amount in surety bond to guarantee satisfaction of the union members' judgment
against King Hong.
- In point of fact, the union's own Urgent Motion of October 29, 1963, emphasizing that
the CIR no longer had any excuse for not complying with the deposit order, as well as
petitioner Magalpo et al's Urgent ex-parte motion of November 4, 1963 to the same
effect were pending before the trial judge, unresolved and unacted upon.
- Petitioners Magalpo et al. had reason, therefore, to assail the proposed settlement for
P110,000.00 as unconscionable, when at the very least the union members could be
assured of P200,000.00 under the deposit order to satisfy their judgment credit, while
the report of King Hong court's examiner showed that King Hong had sufficient assets
and considering that their partial judgment credit, as estimated by King Hong court's
examiner, amounted to more than P400,000.00.
● The trial judge's rush approval of the settlement disregarded the grave adverse
consequences thereof to the union members. The settlement, as prepared by King Hong’s
counsel, provided for a union warranty that aside from the union itself and the members
thereof, "there are no other persons who have any interest over the judgment debt and that
if it should happen that other persons shall make a claim against King Hong and/or said
judgment debt, that King Hong, nevertheless, shall no longer be liable therefor." Such
warranty was against the very facts of record, which showed that as early as June 21,
1963, petitioners-counsels had duly recorded their attorneys' lien of "30% of whatever
amount may finally be awarded in favor of the petitioner." Thus, technically, since the award
in favor of the union members amounted to more than P400,000.00 the settlement for
P110,000.00 would conceivably just about cover the 30% attorneys' fees payable to the
petitioners-counsels under the contract, if they were so minded to enforce it and bad faith
on the union's part were shown, with the union members left holding an empty bag. Such
onerous terms of the settlement could not then properly be approved by the trial judge as
"not contrary to law, morals and public policy."
● All these underscore the failure of due process when petitioners were deprived of the
formal conference on the proposed settlement scheduled for November 8, 1963 and of their
right to be assisted by the union counsel as expressly requested, so that a fair hearing
could be accorded petitioners and an opportunity afforded them to air their serious charges
of bad faith and lack of authority against the union leadership.
● Another vital reason for striking down the settlement is the lack of any express or specific
authority of the president and majority of the union board of directors to execute the same
and scale down the estimated P423,756.74 - judgment liability of King Hong in favor of the
individuals union members to P110,000.00. On the contrary, petitioner board member
Magalpo timely challenged the authority of the union board to execute any such settlement,
expressly informing the trial judge that the union had specifically appointed an entity in
Manila, the "CREAM, Inc.", formerly Credit Research and Intelligence, as its attorney-in-fact
and "exclusive authorized representative for the evaluation, adjustment and liquidation of its
claim against King Hong." Forty-seven other union members-claimants joined petitioner
Magalpo in their denunciation of the union board's unauthorized action, and in their plea for
reconsideration with the CIR. Forty-nine union members-claimants entitled to the bulk of
the judgment award have filed this appeal from the adverse rulings of the Court below.
These union members have repudiated the former union president, Maylem and his board
of directors, for having betrayed the union members, and the new union leadership, in its
Answer filed with the Court, has joined petitioners in their prayer for redress, categorically
asserting that the union records do not show any grant by the members to the former union
board under Maylem to "negotiate the claim or subsequent ratification of the settlement for
P110,000.00" which is “unthinkable and ridiculous." Under such circumstances, the letter of
ratification of the settlement purportedly signed by some 79 members, many of whose
signatures thereon are denounced as forgeries and which ratification was not authenticated
in the proceedings below and has been expressly disowned by petitioners herein, cannot
be given any legal significance or effect.
● The judgment award was for the payment of overtime, premium and differential pay to the
individual union members as claimants and premium and differential pay to the individual
union members as claimants and for the reinstatement of the individual union members
who testified and proved their having been illegally laid-off, which represent a personal
material interest directly in favor of the individual union members, as against the lack of
material interest on the part of the union as such, the union's lack of authority to execute
the settlement, in the absence of express or specific authorization by the union members,
becomes patent. The authority of the union as such, to execute a settlement of the
judgment award in favor of the individual union members, cannot be presumed but must be
expressly granted.
● In La Campana Food Products, Inc. v. Employees Ass'n. vs. Court of Industrial Relations,
et al., the Supreme Court ruled that the union's loss of interest in the case was no ground
for dismissing the case, since “the labor union as a body in reality has not so great a
material interest in the controversy as would prejudice it in the event of dismissal. It is the
twenty-one (21) members for whose benefit the ULP case was prosecuted who stand to
take tremendous losses" and suffer injustice.
● Just as this Court has stricken down unjust exploitation of laborers by oppressive
employers, so will it strike down their unfair treatment by their own unworthy leaders. The
29
 Constitution enjoins the State to afford protection to labor. Fair dealing is equally demanded
of unions as well as of employers in their dealings with employees. The union has been
evolved as an organization of collective strength for the protection of labor against the
unjust exactions of capital, but equally important is the requirement of fair dealing between
the union and its members, which is fiduciary in nature, and arises out of two factors: "one
is the degree of dependence of the individual employee on the union organization; the
other, a corollary of the first, is the comprehensive power vested in the union with respect
to the individual." The union may be considered but the agent of its members for the
purpose of securing for them fair and just wages and good working conditions and is
subject to the obligation of giving the members as its principals all information relevant to
union and labor matters entrusted to it.
● King Hong never filed with the CIR any denial or responsive pleading traversing the factual
allegations in petitioner Magalpo's Manifestation and Objection. Such failure on the part of
King Hong constitutes an implied admission of the material averments. King Hong’s
justification now that it did not file any responsive pleading or denial because Magalpo and
her co-petitioners had no personality to file their pleadings as they were not parties to the
cases in the CIR is of no avail, for they were actually the awardees and beneficiaries under
the judgment against King Hong and the union was but their agent.
● The cases of Jesalva et al. vs. Bautista, and Diomela et al. vs. CIR cited by King Hong
clearly have no application. In Jesalva, there was no question that the union had acted with
the authority of the union membership. No deceit or concealment or misrepresentation
tainted the settlement. Neither was the amount of the settlement denounced as
unconscionable. In Diomela, there was no question of the authority of the union president
to withdraw the unfair labor practice charge, as the three employees directly affected had
co-signed the withdrawal motion with him.
● We therefore sustain the minority opinion of then Presiding Judge Bautista of the CIR.
● It is directed that an order for the enforcement of the Deposit Order, be forthwith issued,
and that hearings on the Chief Examiner's Report of December 14, 1962 be resumed
immediately and without interruption so that the amounts due under the judgment to the
individual union members may be finally determined without further delay.
● It is unfortunate that pending these proceedings, no application for preliminary injunction
restraining King Hong from disposing of its assets was made, since King Hong had stopped
operations in 1962 preparatory to liquidation, by virtue of the provisions of Republic Act No.
3018 nationalizing the rice and corn industry. King Hong's stockholders are, however,
charged with notice of King Hong's liability by virtue of the pendency of these appeals, and
should any liquidating dividends have been distributed and paid to them in the meantime,
they shall stand liable for the satisfaction of the union workers' judgment against King Hong
to the extent of such dividends respectively paid to and received by them. Similarly, any
outstanding unpaid subscriptions or balances of subscriptions to King Hong's capital stock,
estimated at P20,000.00 shall be subject to garnishment and execution in satisfaction of
the judgment.
● As to the contingent 30% attorneys' fees of petitioners-lawyers, the Court deems it proper
at this stage, to direct in the exercise of its authority to control the amount of such fees, that
petitioners-lawyers may collect their stipulated contingent 30% attorneys' fees to the extent
that additional amounts may be realized on the union workers' judgment up to the sum of
P150,000.00, including the initial payment of P110,000.00, (on which they have already
collected their corresponding fee), such that any further amounts collected beyond
P150,000.00 shall no longer be subject to said contingent fee.
WHEREFORE, the respondent Court's Orders of November 8, 1963 and March 9, 1964 are
hereby declared null and void and set aside. The respondent court is directed to proceed
immediately with the execution of the judgment rendered by it against respondent firm in Cases
Nos. 709-V and V-1 as affirmed by this Court's decision of August 31, 1962, in accordance with
the directives set forth in the next preceding paragraph, which is incorporated by reference as an
integral portion of the dispositive part of this decision. With costs against private respondent in
both cases herein decided.
a. Admission and Discipline of Members
• Articles 250(a) and (e); 260(a), and 292(c), Labor Code.
ART. 250. [241] Rights and Conditions of Membership in a Labor Organization.192 The
following are the rights and conditions of membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor
organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;
(e) No labor organization shall knowingly admit as members or continue in membership any
individual who belongs to a subversive organization or who is engaged directly or indirectly in
any subversive activity;
ART. 260. [249] Unfair Labor Practices of Labor Organizations.205 It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self- organization. However,
a labor organization shall have the right to prescribe its own rules with respect to the acquisition
or retention of membership;
ART. 292. [277] Miscellaneous Provisions.
(c) Any employee, whether employed for a definite period or not, shall, beginning on his first day
of service, be considered as an employee for purposes of membership in any labor union.
Villar v. Inciong, G.R. Nos. 50283-84, April 20, 1983.
Petitioners: Dolores Villar, Romeo Pequito, Dionisio Ramos, Benigno Mamaraldo, Orlando
Acosta, Recitacion Bernus, Anselma Andan, Rolando De Guzman and Rita Llagas
Respondents: The Hon. Amado G. Inciong, as Deputy Minister of The Ministry of Labor, Amigo
Manufacturing Incorporated and Philippine Association of Free Labor Unions (PAFLU)
FACTS:
● Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor
organization which, 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 CBA governing their labor
relations, which agreement was then about to expire on February 28, 1977. Within the last
60 days of the CBA, 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 MOLE. The petition was opposed by the PAFLU with whom
the Amigo Employees Union was at that time affiliated. The same employees who had
signed the petition filed by FUR signed a joint resolution disaffiliating from PAFLU.
● Dolores Villar, representing herself to be the authorized representative of the Amigo
Employees Union, filed a petition for certification election in the Company. The Amigo
30
 Employees Union-PAFLU intervened and moved for the dismissal of the petition for
certification election filed by Villar, on the ground, among others that Villar had no legal
personality to sign the petition since she was not an officer of the union nor is there factual
or legal basis for her claim that she was the authorized representative of the local union.
● Med-Arbiter dismissed the petition filed by Villar, which dismissal is still pending appeal
before BLR. Amigo Employees Union-PAFLU called a special meeting of its general
membership. A Resolution was thereby unanimously approved which called for the
investigation by the PAFLU national president, of all of the petitioners and one Felipe
Manlapao, for continuously maligning the union spreading false propaganda that the union
officers were merely appointees of the management; and for causing divisiveness in the
union. PAFLU formed a Trial Committee to investigate the local union's charges against the
petitioners for acts of disloyalty.
● PAFLU and the Company concluded a new CBA which also reincorporated the same
provisions of the existing CBA, including the union security clause. PAFLU President
rendered a decision finding the petitioners guilty of the charges. PAFLU demanded the
Company to terminate the employment of the petitioners pursuant to the security clause of
the CBA. Acting on PAFLU's demand, the Company informed PAFLU that it will first secure
the necessary clearances to terminate petitioners. PAFLU requested the Company to put
petitioners under preventive suspension pending the application for said clearances to
terminate the petitioners. The Company filed the request for clearance to terminate the
petitioners before DOLE which was granted. DOLE Secretary Inciong denied the appeal,
hence, this petition for review.
ISSUE: WON the DOLE Secretary erred in affirming the grant of clearance of termination of
petitioners.
HELD: NO.
● It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the
freedom of association ordained by the Constitution. But the Court has laid down the ruling
that a closed shop is a valid form of union security, and such provision in a CBA is not a
restriction of the right of freedom of association guaranteed by the Constitution.
● In the case at bench, the Company and the Amigo Employees Union-PAFLU entered into a
CBA with a union security clause which is a reiteration of the old CBA. The quoted
stipulation for closed-shop is clear and unequivocal. Petitioners’ theory that their expulsion
was not valid upon the grounds is untenable. PAFLU had the authority to investigate
petitioners on the charges filed by their co-employees in the local union and after finding
them guilty as charged, to expel them from the roll of membership of the Amigo Employees
Union-PAFLU is clear under the constitution of the PAFLU to which the local union was
affiliated. And pursuant to the security clause of the new CBA, reiterating the same clause
in the old CBA, PAFLU was justified in applying said security clause.
● Recognized and salutary is the principle that when a labor union affiliates with a mother
union, it becomes bound by the laws and regulations of the parent organization. It is
undisputable that oppositors were members of the Amigo Employees Union at the time that
said union affiliated with PAFLU; hence, oppositors are bound by the laws and regulations
of PAFLU.
● Inherent in every labor union, or any organization for that matter, is the right of self-
preservation. When members of a labor union seek the disintegration and destruction of the
very union to which they belong; they thereby forfeit their rights to remain as members of
the union which they seek to destroy. Prudence and equity, as well as the dictates of law
and justice, therefore, compelling mandate the adoption by the labor union of such
corrective and remedial measures, in keeping with its laws and regulations, for its
preservation and continued existence; lest by its folly and inaction, the labor union crumble
and fall.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from affirming the joint
decision of the OIC of Regional Office No. 4 in RO4-Case No. T-IV-3549-T and RO4 Case No.
RD-4-4088-77-T granting clearance to terminate petitioners as well as dismissing their complaint
with application for preliminary injunction, is hereby AFFIRMED. No costs.
Salunga v. Court of Industrial Relations, G.R. No. L-22456, September 27, 1967.
Facts:
Francisco Salunga (Salunga) had been an employee of San Miguel Brewery, Inc since 1948.
And Salunga was also a member of a Union in San Miguel since 1953.
San Miguel Agrees that as a condition of employment of those employees who are members of
the UNION on the date of the signing of this agreement, or may join the UNION during the
effectivity of this agreement that if such employees retracts its membership from the union,
he/she shall be automatically removed as an employee in San Miguel.
On August 18, 1961 Salunga tendered his resignation from the Union, which accepted it on
August 26, 1961, and transmitted it to the Company on August 29, 1961, with a request for the
immediate implementation of section 3, Article II.
San Miguel informed Salunga that his aforementioned resignation would result in the
termination of his employment, in view of Section 3. AS such Salunga wrote to the Union a letter
withdrawing or revoking his resignation and advising the Union to continue deducting his
monthly union dues. Salunga also furnished a copy of this communication to the Company. San
Miguel in turn, notified the Union of the receipt of said copy and that San
Miguel shall not take any action on this case and shall consider Salunga still a member of the
union and continue deducting his union dues,
On September 8, 1961, the Union told the San Miguel that Salunga’s membership could not be
reinstated and insisted on his separation from the service.San Miguel told The Union that they
asked Salunga if he realized that by resigning from the Union he would in effect be forfeiting his
position in the company. When he answered in the negative, San Miguel showed him a copy of
our Collective Bargaining Agreement and called his attention to Sec. 3, Art. II. Salunga told San
Miguel that he did not realize that he would be losing his job if he were to resign from the Union.
San Miguel clarified that it did not at any time ask or urge him to withdraw his resignation;
neither that it is asking or insisting that the Union readmit him into the Union. San Miguel
asserted that informing him of the consequences of his resignation from the Union, was the only
humane thing to do under the circumstances. Nevertheless, if notwithstanding the foregoing
clarification the Union still consider him as having actually resigned from the organization, and
The Union insist that San Miguel dismiss him from the service in accordance with Sec. 3, Article
II of the CBA, Then San Miguel will have no alternative but to do so.
Salunga appealed to his complaint to PAFLU National Convention but his dismissal was
maintained.
31
a complaint for unfair labor practice, against the Union, its president, respondent John de
Castillo, respondent Cipriano Cid, as PAFLU president, the Company, and its aforementioned
Vice-President Miguel Noel with the CIR.
CIR: ruled for Salunga and held that San Miguel, Miguel Noel, National Brewery & Allied
Industrial Labor Union of the Philippines (PAFLU), John de Castillo, and Cipriano Cid, are
hereby declared guilty of unfair labor practices as charged, and ordered to cease and desist
from further committing such unfair labor practice acts complained.
On appeal, CIR en banc was reversed.
Issue/s:
Whether or not Salunga cannot be re-admitted
Whether or not San Miguel was guilty of unfair labor practice.
Ruling:
1. He may be re-admitted as a member, although he voiced out concerns and
grievances against The Union, because it was stated in the constitution and by-laws of
the Union.
Although as a general rule, A state may not compel ordinary voluntary associations to
admit thereto any given individual, because membership therein may be accorded or
withheld as a matter of privilege; the rule is qualified in respect of labor unions holding
a monopoly in the supply of labor, either in a given locality, or as regards a particular
employer with which it has a closed-shop agreement.
Consequently, it is well settled that such unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a closed-shop provision would not justify the
employer in discharging, or a union in insisting upon the discharge of, an employee
whom the union thus refuses to admit to membership, without any reasonable ground
therefor. Needless to say, if said unions may be compelled to admit new members,
who have the requisite qualifications, with more reason may the law and the courts
exercise the coercive power when the employee involved is a long standing union
member, who, owing to provocations of union officers, was impelled to tender his
resignation, which he forthwith withdrew or revoked. Surely, he may, at least, invoke
the rights of those who seek admission for the first time, and can not arbitrarily he
denied readmission.
2. S.C ruled that there was no Unfair Lanor practice The Company was reluctant — if not
unwilling — to discharge the petitioner. When the Union first informed the Company of
petitioner's resignation and urged implementation of section 3 of the bargaining
contract, the Company advised petitioner of the provision thereof, thereby intimating
that he had to withdraw his resignation in order to keep his employment. Besides, the
Company notified the Union that it (the Company) would not take any action on the
case and would consider the petitioner, "still a member" of the Union. When the latter,
thereafter, insisted on petitioner's discharge, the Company still demurred and
explained it was not taking sides and that its stand was prompted merely by "humane"
considerations, springing from the belief that petitioner had resigned from the Union
without realizing its effect upon his employment. And, as the Union reiterated its
demand, the Company notified petitioner that it had no other alternative but to
terminate his employment, and dismissed him from the service, although with "regret".
Bugay v. Kapisanan ng mga Manggagawa sa Manila Railroad Company, G.R. No. L-13093,
February 28, 1962.
FACTS:
Bugay, auditor of the Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company
(Kapisanan) and a payroll clerk of Manila Railroad, was requested by the secretary-treasurer of
the company to deliver certain documents belonging to the union and in compliance therewith he
delivered them without consulting the officers of the union. Making use of these documents, the
management of the company filed with the City Fiscal of Manila against Vicente K. Olazo,
president of the union a charge for falsification of commercial document (such was dismissed by
the city fiscal).
Subsequently, charges for disloyalty and conduct unbecoming a union member were preferred
against Bugay, which caused his explusion. Bugay filed a charge for ULP against the union
before the CIR which, after due hearing, rendered decision holding that Bugay’s expulsion was
illegal it appearing that the same has not been approved by the majority of the chapters of the
union as required by its constitution and by-laws. Bugay did not have sufficient opportunity to
defend himself.
Issue: Whether or not Bugay expulsion as a union member is proper.
RULING:
No. Bugay’s affiliation with the Kapisanan was never terminated. That being the case, Bugay is
entitled to all the rights and obligations appertaining to every member of the Kapisanan Union
actions, whether favorable or otherwise, must be taken by the chapters within a period of ten
days from the time they receive the resolution. Even under the assumption that the proceedings
against Bugay were not irregular, the resolution in question never had any valid effect on his
union membership. Considering that he has been unduly and discriminatorily deprived of such
rights and obligations, the Court finds, and so holds, that the Kapisanan, by their act and
conduct, have engaged in and are engaging in ULP.
It should be observed that the main basis of Bugay's action is his claim that because of the ULP
committed by the officers of defendant union as found by the CIR and the SC, he has suffered
moral damages. It is true that the decisions both of the CIR and SC do not contain any
statement that the charges preferred by the officers of the union against him which resulted in
his expulsion were "trumped up" or fabricated, or that said officers acted maliciously or in bad
faith, but the fact remains that the two courts have found that his expulsion was illegal because
of the irregularities committed in his investigation. In effect, it was found that not only has he not
been given an opportunity to defend himself but his expulsion was not submitted to the different
chapters of the union as required by its constitution and by-laws.
Issue: WON Bugay was afforded due process.
SC: No. In the investigation held and in the board meeting where the committee’s report
recommending Bugay’s expulsion was approved, Bugay was not present (he was in Lucena).
The committee assigned to summon him failed to serve notice upon him because he was in
Lucena. However, proceedings still continued anent the absence of Bugay.
32
Besides, the contention that majority of the chapters voted in favor of Bugay's expulsion is not
borne by the evidence. An examination of the chapters to the Kapisanan board of directors
shows that all of the votes, except those of the Hondagua Chapters and Engineering Manila
Yard Chapter were not validly cast.
b. Election of Officers
• Article 250(c); (f); and (k), Labor Code.
ART. 250. [241] Rights and Conditions of Membership in a Labor Organization.192 The
following are the rights and conditions of membership in a labor organization:
(c) The members shall directly elect their officers in the local union, as well as their national
officers in the national union or federation to which they or their local union is affiliated, by secret
ballot at intervals of five (5) years. No qualification requirement for candidacy to any position
shall be imposed other than membership in good standing in subject labor organization. The
secretary or any other responsible union officer shall furnish the Secretary of Labor and
Employment with a list of the newly-elected officers, together with the appointive officers or
agents who are entrusted with the handling of funds within thirty (30) calendar days after the
election of officers or from the occurrence of any change in the list of officers of the labor
organization;
(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for
election as a union officer or for appointment to any position in the union;
(k) The officers of any labor organization shall not be paid any compensation other than the
salaries and expenses due to their positions as specifically provided for in its constitution and
by-laws, or in a written resolution duly authorized by a majority of all the members at a general
membership meeting duly called for the purpose. The minutes of the meeting and the list of
participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives. Any irregularities in the approval of the resolutions shall be a ground
for impeachment or expulsion from the organization;
Montaño v. Verceles, G.R. No. 168583, July 26, 2010.
FACTS:
Atty. Montaño worked as legal assistant of FFW Legal Center on October 1, 1994.
Subsequently, he joined the union of rank‐and‐file employees, the FFW Staff Association, and
eventually became the employees' union president in July 1997. In November 1998, he was
likewise designated officer‐in‐charge of FFW Legal Center.
During the 21st National Convention and Election of National Officers of FFW, Atty. Montaño
was nominated and elected for the position of National Vice‐President despite the finding of
FFW COMELEC that Atty. Montaño is not qualified to run for the position because Section 76 of
Article XIX of the FFW Constitution and By‐Laws prohibits federation employees from sitting in
its Governing Board and strong opposition and protest of respondent Atty. Ernesto C. Verceles
(Atty. Verceles), a delegate to the convention and president of University of the East Employees'
Association (UEEA‐FFW) which is an affiliate union of FFW.
On May 28, 2001, through a letter to the Chairman of FFW COMELEC, Atty. Verceles reiterated
his protest over Atty. Montaño's candidacy which he manifested during the plenary session
before the holding of the election in the Convention. On June 18, 2001, Atty. Verceles sent a
follow‐up letter to the President of FFW requesting for immediate action on his protest.
On July 13, 2001, Atty. Verceles, as President of UEEA‐FFW and officer of the Governing Board
of FFW, filed before the BLR a petition13 for the nullification of the election of Atty. Montaño as
FFW National Vice‐ President.
Atty. Montaño filed his Comment with Motion to Dismiss on the grounds that the Regional
Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction
over the case.
DECISION OF LOWER FFW COMELEC: Montano not qualified.
Bureau of Labor Relations (BLR):
Montano qualified. it upheld its jurisdiction over the intra‐union dispute case.
BLR likewise affirmed that Atty. Verceles' legal personality to institute the action as president of
an affiliate union of FFW.
BLR ruled that there were no grounds to hold Atty. Montaño unqualified to run for National Vice‐
President of FFW.
BLR denied motion for reconsiderarion.
CA: Reversed BLR, montano not qualified.
Atty. Montaño did not possess the qualification requirement under paragraph (d) of Section 26
that candidates must be an officer or member of a legitimate labor organization. According to the
CA, since Atty. Montaño, as legal assistant employed by FFW, is considered as confidential
employee, consequently, he is ineligible to join FFW Staff Association, the rank‐and‐file union of
FFW. * CA (motion for reconsideration): denied.
ISSUE/S:
1.Whether or not the CA was correct in upholding the jurisdiction of the BLR;
2.Whether or not was correct in not declaring as premature the petition in view of the pending
protest before FFW COMELEC
3. Whether or not the CA was correct in not finding that the petition violated the rule on non ‐
forum shopping
4. Whether or not the CA was correct in not dismissing the case for being moot in view of the
appointment of Atty. Verceles as NLRC Commissioner;
5. Whether or not Montano is qualified to run as National Vice ‐ President
6. Whether or not the CA was correct in granting the petition to annul Montano's election as
FFW National Vice‐ President on the ground that FFW Staff Association is not a legitimate labor
organization.
Ruling:
33

1.YES. The BLR has jurisdiction over intra‐union disputes involving a federation.
Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of
DOLE have concurrent jurisdiction over inter‐union and intra‐union disputes. Such disputes
include the conduct or nullification of election of union and workers' association officers. There
is, thus, no doubt as to the BLR's jurisdiction over the instant dispute involving member‐unions
of a federation arising from disagreement over the provisions of the federation's constitution and
by‐laws.
Rule XVI lays down the decentralized intra‐union dispute settlement mechanism. Section 1
states that any complaint in this regard ‘shall be filed in the Regional Office where the union is
domiciled.' The concept of domicile in labor relations regulation is equivalent to the place where
the union seeks to operate or has established a geographical presence for purposes of
collective bargaining or for dealing with employers concerning terms and conditions of
employment.
The matter of venue becomes problematic when the intra‐union dispute involves a federation,
because the geographical presence of a federation may encompass more than one
administrative region. Pursuant to its authority under Article 226, this Bureau exercises original
jurisdiction over intra‐union disputes involving federations. It is well‐settled that FFW, having
local unions all over the country, operates in more than one administrative region. Therefore,
this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation
of or disagreement over any provision of its constitution and by‐laws.
2.YES. The petition to annul Atty. Montaño's election as VP was not prematurely filed.
It is true that under the Implementing Rules, redress must first be sought within the organization
itself in accordance with its constitution and by‐laws. However, this requirement is not absolute
but yields to exception under varying circumstances. the FFW COMELEC failed to timely act
thereon. Thus, Atty. Verceles had no other recourse but to take the next available remedy to
protect the interest of the union he represents as well as the whole federation, especially so that
Atty. Montaño, immediately after being proclaimed, already assumed and started to perform the
duties of the position. Consequently, Atty. Verceles properly sought redress from the BLR so
that the right to due process will not be violated.
3.Montano is estopped from raising this issue since he only raised this during this motion for
reconsideration with the CA. The allegation regarding certification against forum shopping was
belatedly raised. It is settled that new issues cannot be raised for the first time on appeal or on
motion for reconsideration.
4. The CA is correct. There is necessity to resolve the case despite the issues having become
moot. As manifested by Atty. Verceles, Atty. Montaño ran and won as FFW National President
after his challenged term as FFW National Vice‐President had expired. It must be stated at this
juncture that the legitimacy of Atty. Montaño's leadership as National President is beyond our
jurisdiction and is not in issue in the instant case. The only issue for our resolution is petitioner's
qualification to run as FFW National Vice‐President during the May 26‐ 27, 2001 elections. We
find it necessary and imperative to resolve this issue not only to prevent further repetition but
also to clear any doubtful interpretation and application of the provisions of FFW Constitution &
By‐laws in order to ensure credible future elections in the interest and welfare of affiliate unions
of FFW.
5. NO, the decision of FFW COMELEC is final and should have been given credence.
FFW COMELEC, undeniably, has sufficient authority to adopt its own interpretation of the
explicit provisions of the federation's constitution and by‐laws and unless it is shown to have
committed grave abuse of discretion, its decision and ruling will not be interfered with. The FFW
Constitution and By‐laws are clear that no member of the Governing Board shall at the same
time perform functions of the rank‐and‐file staff. The BLR erred in disregarding this clear
provision. The FFW COMELEC's ruling which considered Atty. Montaño's candidacy in violation
of the FFW Constitution is therefore correct.
6. NO. the CA's declaration of the illegitimate status of FFW Staff Association is proscribed by
law, owing to the preclusion of collateral attack.
Tancinco v. Ferrer-Calleja, G.R. No. 78131, January 20, 1988.
FACTS:
Private respondents are the prime organizers of ITM-MEA. While said respondents were
preparing to file a petition for direct certification of the Union as the sole and exclusive
bargaining agent of ITM's bargaining unit, the union's Vice- President, was promoted to the
position of Department Head, thereby disqualifying him for union membership. Said incident, led
to a strike spearheaded by Lacanilao group, respondents. Another group however, led by
petitioners staged a strike inside the company premises. After 4 days the strike was settled. On
May 10, 1986 an agreement was entered into by the representatives of the management,
Lacanilao group and the Tancinco group the relevant terms of which states that all monthly
employees shall be united under one union, the ITM Month Employees Association (ITM-MEA)
to be affiliated with ANGLO. The management of ITM recognizes ANGLO as the sole and
exclusive bargaining agent of all the monthly-paid employees;
However, during the pre-election conference attended by MOLE officers, ANGLO through its
National Secretary, made a unilateral ruling excluding some 56 employees consisting of the
Manila office employees, members of Iglesia ni Kristo, non-time card employees, drivers of Mrs.
Salazar and the cooperative employees of Mrs. Salazar. The election of officers was conducted,
the 56 employees in question participated but their votes were segregated without being
counted. Lacanilao's group won. Lacanilao garnered 119 votes with a margin of 3 votes over
Tancinco prompting petitioners to make a protest.
BLR ruled holding the exclusion of the 56 employees as arbitrary, whimsical, and wanting in
legal basis but set aside the challenged order on the ground that 51 ** of 56 challenged voters
were not yet union members at the time of the election per April 24, 1986 list submitted before
the Bureau.
ISSUE:
WON the 56 employees have the right to vote even though some of them are not included in the
list of union members submitted to the Bureau. YES
RATIO: Submission of the employees names with the BLR as qualified members of the union is
not a condition sine qua non to enable said members to vote in the election of union's officers. It
finds no support in fact and in law. Per public respondent's findings, the April 24, 1986 list
34
consists of 158 union members only wherein 51 of the 56 challenged voters' names do not
appear.
It is true that under article 242(c) of the Labor Code, as amended, only members of the union
can participate in the election of union officers. The question however of eligibility to vote may be
determined through the use of the applicable payroll period and employee's status during the
applicable payroll period. The payroll of the month next preceding the labor dispute in case of
regular employees and the payroll period at or near the peak of operations in case of employees
in seasonal industries.
It can also be shown that their act of joining the election by casting their votes is a clear
manifestation of their intention to join the union. They must therefore be considered ipso facto
members. Said employees having exercised their right to unionism by joining ITM-MEA their
decision is paramount. Their names could not have been included in the list of employee
submitted on April 24, 1986 to the Bureau of Labor for the agreement to join the union was
entered into only on May 10, 1986. Indeed the election was supervised by the Department of
Labor where said 56 members were allowed to vote. Private respondents never challenged their
right to vote then.
Kapisanan ng Manggagawang Pinagyakap v. Trajano, G.R. No. 62306, January 21, 1985.
FACTS:
On June 30, 1981, a written request for accounts examination of the financial status of KMP
Labor Union, the existing labor union at Franklin Baker Company in San Pablo City, was filed by
private respondent Silvestre and 13 other employees, who are members of the union
Acting on said request, Union Account Examiner Vicedo of the MOLE conducted the
investigation and thereafter submitted a report
Based on the revelations, private respondents filed with the Regional Office QC, MOLE, a
petition for the expulsion of the union officers
They committed gross violation of the Labor Code, specifically pars. (a), (b), (g), (h), (j), and (k)
of Article 242; and, the constitution and by-laws of the union, Sections 6 and 7
The Union Officers Denied imputation and argued that the disallowed expenditures were made
in good faith; that the same conduced the benefit of members
That They are willing to reimburse the same from their own personal funds and They should not
be held accountable for the non-production of books of accounts of the Union for years 1977,
1978, and 1979 because they were not the officers then and not one of the former officers of the
Union had turned over to them the records
And the Union officers asserted asserted Non-ratification of the constitution and by-laws of the
Union and the non-segregation of the Union funds occurred before they became officers and
that they have already been correcting the same
Med-Arbiter Cabibihan ordered the holding of a referendum, to be conducted under the
supervision of BLR
Petitioners appealed the order to respondent Trajano of BLR the disallowed expenditures of
P1,278.00 were made in good faith and not used for the personal benefit of herein union officers
but, instead, contributed to the benefit of the members they were elected in 1980 only and,
therefore, they could not be made responsible for the omissions of their predecessors who failed
to turn over union records for the questioned period there would be a general election on Oct. 4,
1982, at which time, both the election and the desired referendum could be undertaken to
determine the membership at minimum expense they prayed that resolution on the issue be held
in abeyance
Respondents claimed that Med-Arbiter erred in calling a referendum to decide issue; the
appropriate action should be the expulsion of union officers
Trajano dismissed both appeals and affirmed in toto the order of Med-Arbiter
ISSUE:
Whether or not union officers were guilty of the alleged acts imputed against them thus
expulsion was proper
Ruling: The Supreme Court ruled that were not guilty of the alleged acts
If herein union officers (also petitioners) were guilty of the alleged acts imputed against them,
said public respondent pursuant to Article 242 of the New Labor Code and in the light of Our
ruling in Duyag vs. Inciong, 98 SCRA 522, should have meted out the appropriate penalty on
them, i.e., to expel them from the Union, as prayed for, and not call for a referendum to decide
the issue;
The alleged falsification and misrepresentation of herein union officers were not supported by
substantial evidence. The fact that they disbursed the amount of P1,278.00 from Union funds
and later on was disallowed for failure to attach supporting papers thereon did not of itself
constitute falsification and/or misrepresentation. The expenditures appeared to have been made
in good faith and the amount spent for the purpose mentioned in the report, if concurred in or
accepted by the members, are reasonable; and
The repudiation of both private respondents to the highly sensitive position of auditor at the
October 4, 1982 election, is a convincing manifestation and demonstration of the union
membership's faith in the herein officers' leadership on one hand and a clear condonation of an
act they had allegedly committed.
By and large, the holding of the referendum in question has become moot and academic. This is
in line with Our ruling in Pascual vs. Provincial Board of Nueva Ecija, 106 Phil. 471, which We
quote:
The Court should never remove a public officer for acts done prior to his present term of office.
To do otherwise would be to deprive the people of their right to elect their officers. When the
people have elected a man to office, it must be assumed that they did this with knowledge of his
life and character, and that they disregarded or forgave misfaults or misconduct, if he had been
guilty of any. It is not for the court, by reason of such faults or misconduct to practically overrule
the will of the people.
35
c. Major Policy Matter
• Article 250(d), Labor Code.
Art. 250. Procedure in collective bargaining. The following procedures shall be observed in
collective bargaining
d. During the conciliation proceedings in the Board, the parties are prohibited from doing any act
which may disrupt or impede the early settlement of the disputes;
Halili v. Court of Industrial Relations, G.R. No. L-24864, April 30, 1985.
Facts:
The cases involve disputes regarding claims for overtime of more than five hundred bus drivers
and conductors of Halili Transit. Litigation initially commenced with the filing of a complaint for
overtime with the CIR. The disputes were eventually settled when the contending parties
reached an Agreement where the Administratrix would transfer to the employees the title to a
tract of land in Caloocan, Rizal. The parcel of land was eventually registered in the name of the
Union.
The Union, through Atty. Benjamin C. Pineda, filed an urgent motion with the Ministry of Labor
and Employment (MOLE) requesting for authority to sell and dispose of the property. Union
President Amado Lopez, in a letter, informed J.C. Espinas and Associates that the general
membership of the said Union had authorized a 20% contingent fee for the law firm based on
whatever amount would be awarded the Union.
Atty. Jose C. Espinas, (the original counsel) established the award of 897 workers' claim. When
Atty. Pineda appeared for the Union in these cases, still an associate of the law firm, his
appearance carried the firm name B.C. Pineda and Associates," giving the impression that he
was the principal lawyer in these cases.
Atty. Pineda joined the law firm of Atty. Espinas in 1965 when these cases were pending
resolution. He always held office in the firm's place at Puyat Building, except in 1966 to 1967
when he transferred to the Lakas ng Manggagawa Offices. During this one-year stint at the latter
office, Atty. Pineda continued handling the case with the arrangement that he would report the
developments to the Espinas firm. When he rejoined the law firm in 1968, he continued working
on these cases and using the Puyat Building office as his address in the pleadings.
When Atty. Pineda rejoined the Espinas firm in 1968, he did not reveal to his partners (he was
made the most senior partner) that he had a retainer's contract. He stayed with the law firm until
1974 and still did not divulge the 1967 retainer's contract. Only the officers of the Union knew of
the contract.
The alleged retainer's contract between Atty. Pineda and the Union appears anomalous and
even illegal as well as unethical considering that-
1. The contract was executed only between Atty. Pineda and the officers of the Union chosen by
about 125 members only. It was not a contract with the general membership.
2. The contingent fee of 30% for those who were still working with Halili Transit and the 45% fee
for those who were no longer working worked to the prejudice of the latter group who should and
were entitled to more benefits. Thus, too, when the alleged retainer's contract was executed in
1967, the Halili Transit had already stopped operations in Metro Manila. By then, Atty. Pineda
knew that all the workers would be out of work which would mean that the 45% contingent fee
would apply to all.
3. The contract which retroactively took effect on January 1, 1966, was executed when Atty.
Espinas was still handling the appeal of Halili Transit in the main case before the Supreme
Court.
4. When Atty. Pineda filed his motion for approval of his attorney's lien with Arbiter Valenzuela
on February 8, 1983, he did not attach the retainer's contract.
5. The retainer's contract was not even notarized.
A prospective buyer, the Manila Memorial Park Cemetery, Inc. objected in view of PD 1529
which requires no less than an order from a court of competent jurisdiction as authority to sell
property in trust.
Atty. Pineda, without authority from the Supreme Court but relying on the earlier authority given
him by the Ministry of Labor, filed another urgent motion, praying that the Union be authorized to
sell the lot. The sale was finally consummated, resulting in the execution of an escrow
agreement.
When Atty. Jose C. Espinas (herein movant and alleged original counsel for the Union) learned
of the sale and apportionment of the proceeds from past Union president Amado Lopez, he
requested Labor Arbiter Raymundo Valenzuela to allow him to look into the records of the case.
The latter, however, told him that the records of the case were missing. Thereupon, Atty.
Espinas requested Director Pascual Reyes of the NLRC to locate the records.
Issue:
RULING:
d. Union Funds
• Articles 228(b); 250; and 289, Labor Code.
ART. 228. [222] Appearances and Fees.172 (a) Non-lawyers may appear before the
Commission or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or members thereof.
(b) No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective
bargaining agreement shall be imposed on any individual member of the contracting union:
Provided, However, that attorney’s fees may be charged against union funds in an amount to be
agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary
shall be null and void.
ART. 289. [274] Visitorial Power.223 The Secretary of Labor and Employment or his duly
authorized representative is hereby empowered to inquire into financial activities of legitimate
labor organizations upon the filing of a complaint under oath and duly supported by the written
consent of at least twenty percent (20%) of the total membership of the labor organization
concerned and to examine their books of accounts and other records to determine compliance
or non-compliance with the law and to prosecute any violations of the law and the union
constitution and by- laws: Provided, That such inquiry or examination shall not be conducted
during the sixty (60) days freedom period nor within the thirty (30) days immediately preceding
the date of election of union officials.
36
Peninsula Employees Union (PEU) v. Esquivel, G.R. No. 218454, December 1, 2016.
FACTS:
● On December 13, 2007, Peninsula Employees Union’ (PEU) Board of Directors
passed Local Board Resolution No. 12, series of 20078 authorizing, among others,
the affiliation of PEU with NUWHRAIN, and the direct membership of its individual
members thereto.
● On the same day, the said act was submitted to the general membership, and was
duly ratified by 223 PEU members. Beginning January 1, 2009, PEU-NUWHRAIN
sought to increase the union dues/agency fees from one percent (1 % ) to two percent
(2%) of the rank and file employees’ monthly salaries, brought about by PEU’s
affiliation with NUWHRAIN, which supposedly requires its affiliates to remit to it two
percent (2%) of their monthly salaries.
● The non-PEU members objected to the assessment of increased agency fees arguing
that: (a) the new CBA is unenforceable since no written CBA has been formally signed
and executed by PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is exorbitant
and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory
requirements for such increase.
● The OSEC upheld PEU-NUWHRAIN's right to collect agency fees from the non-PEU
members but only 1% and denied its bid to increase the agency fees to two percent
(2%) for failure to show that its general membership approved the same.
● On MR, OSEC issued an Order partially granting PEU-NUWHRAIN's motion for
reconsideration, and declaring it entitled to collect two percent (2%) agency fees from
the non-PEU members.
● The CA set aside the OSEC's March 6, 2012 Order, and reinstated the June 2, 2010
Decision. It ruled that PEU-NUWHRAIN failed to prove compliance with the requisites
for a valid check-off since the October 28, 2008 minutes do not show that the increase
in union dues was duly approved by its general membership. It also found the July 1,
2010 GMR suspicious considering that it surfaced only after PEU received the
OSEC's June 2, 2010 Decision disallowing the collection of increased agency fees.
ISSUE: Whether or not PEU-NUWHRAIN has right to collect the increased agency fees. YES.
HELD:
● The recognized collective bargaining union which successfully negotiated the CBA
with the employer is given the right to collect a reasonable fee called “agency fee”
from non-union members who are employees of the appropriate bargaining unit, in an
amount equivalent to the dues and other fees paid by union members, in case they
accept the benefits under the CBA.
● While the collection of agency fees is recognized by Article 259 (formerly Article 248)
of the Labor Code, as amended, the legal basis of the union’s right to agency fees is
neither contractual nor statutory, but quasi-contractual, deriving from the established
principle that non-union employees may not unjustly enrich themselves by benefiting
from employment conditions negotiated by the bargaining union. In the present case,
PEU-NUWHRAIN’s right to collect agency fees is not disputed.
● Case law interpreting Article 250 (n) and ( o ) of the Labor Code mandates the
submission of three (3) documentary requisites in order to justify a valid levy of
increased union dues.
● These are: (a) an authorization by a written resolution of the majority of all the
members at the general membership meeting duly called for the purpose; (b) the
secretary’s record of the minutes of the meeting, which shall include the list of all
members present, the votes cast, the purpose of the special assessment or fees and
the recipient of such assessment or fees; and (c) individual written authorizations for
check-off duly signed by the employees concemed.
● In the present case, however, PEU-NUWHRAIN failed to show compliance with the
foregoing requirements. It attempted to remedy the “inadvertent omission” of the
matter of the approval of the deduction of two percent (2%) union dues from the
monthly basic salary of each union member.
● While the matter of implementing the two percent (2%) union dues was taken up
during the PEU-NUWHRAIN’s 8th General Membership Meeting on October 28, 2008,
there was no sufficient showing that the same had been duly deliberated and
approved.
● The minutes of the Assembly itself belie PEU-NUWHRAIN’s claim that the increase in
union dues and the corresponding check-off were duly approved since it merely stated
that “the [two percent (2%)] Union dues will have to be implemented,” meaning, it
would still require the submission of such matter to the Assembly for deliberation and
approval.
● Having failed to establish due deliberation and approval of the increase in union dues
from one percent ( 1 % ) to two percent (2% ), as well as the deduction of the two
percent (2%) union dues during PEU-NUWHRAIN’s 8th General Membership Meeting
on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1,
2010 GMR.
● Corollarily, no individual check-off authorizations can proceed therefrom, and the
submission of the November 2008 check-off authorizations becomes inconsequential.
Jurisprudence states that the express consent of the employee to any deduction in his
compensation is required to be obtained in accordance with the steps outlined by the
law, which must be followed to the letter; however, PEU-NUWHRAIN failed to comply.
● Thus, the CA correctly ruled that there is no legal basis to impose union dues and
agency fees more than that allowed in the expired CBA, .e., at one percent (1 %) of
the employee’s monthly basic salary.
Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union v. Manila
Water Company, Inc., G.R. no. 174179, November 16, 2011.
FACTS:
● The Union is the duly-recognized bargaining agent of the rank-and-file employees of
the respondent Manila Water Company, Inc. (Company) while Borela is the Union
President. Metropolitan Waterworks and Sewerage System (MWSS) entered into a
Concession Agreement (Agreement) with the Company to privatize the operations of
the MWSS.
● Article 6.1.3 of the Agreement provides that the Concessionaire shall grant its
employees benefits no less favorable than those granted to MWSS employees at the
time of their separation from MWSS such as amelioration allowance (AA) and the
cost-of-living allowance (COLA).
● The payment of the AA and the COLA was discontinued pursuant to Republic Act No.
6758, otherwise known as the Salary Standardization Law, which integrated the
allowances into the standardized salary. Nonetheless, the Union demanded from the
Company the payment of the AA and the COLA during the renegotiation of the parties
Collective Bargaining Agreement (CBA).
37
 ● The company subsequently agreed for the payment of the AA and COLA. However,
did not pay said benefits because COA disapproved their payment because the
company had no funds to cover this benefit.
● A complaint against the Company for payment of the AA, COLA, moral and exemplary
damages, legal interest, and attorney's fees before the National Labor Relations
Commission (NLRC).
● LA ruled in favor of the petitioners and ordered the payment of their AA and COLA, six
percent (6%) interest of the total amount awarded, and ten percent (10%) attorney's
fees. NLRC confirmed.
● The Company pointed out that the award of ten percent (10%) attorney's fees to the
petitioners is already provided for in their Memorandum of Agreement (MOA) which
mandated that attorney's fees shall be deducted from the AA and CBA receivables.
● The petitioners argued that the MOA only covered the payment of their share in the
contracted attorney's fees, but did not include the attorney's fees awarded by the
NLRC.
● The CA modified the assailed NLRC rulings by deleting the order for respondent
MWCI to pay attorney's fees equivalent to 10% of the total judgment awards.
ISSUE: Whether or not the NLRC gravely abused its discretion in awarding ten percent (10%)
attorney's fees to the petitioners. NO.
HELD:
● There are two commonly accepted concepts of attorney's fees. In its ordinary
concept, an attorney's fee is the reasonable compensation paid to a lawyer by his
client for the legal services the former renders; compensation is paid for the cost
and/or results of legal services per agreement or as may be assessed. In its
extraordinary concept, attorney's fees are deemed indemnity for damages ordered
by the court to be paid by the losing party to the winning party.
● Article 111 of the Labor Code, as amended, contemplates the extraordinary concept
of attorney's fees and that Article 111 is an exception to the declared policy of strict
construction in the award of attorney's fees. Although an express finding of facts and
law is still necessary to prove the merit of the award, there need not be any showing
that the employer acted maliciously or in bad faith when it withheld the wages.
● Settled is the rule that in actions for recovery of wages, or where an employee was
forced to litigate and, thus, incur expenses to protect his rights and interests, a
monetary award by way of attorney's fees is justifiable under Article 111 of the Labor
Code; Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article
2208 of the Civil Code. The award of attorney's fees is proper, and there need not be
any showing that the employer acted maliciously or in bad faith when it withheld the
wages. There need only be a showing that the lawful wages were not paid
accordingly.
● In the present case, we find it undisputed that the union members are entitled to their
AA benefits and that these benefits were not paid by the Company. That the
Company had no funds is not a defense as this was not an insuperable cause that
was cited and properly invoked.
● As a consequence, the union members represented by the Union were compelled to
litigate and incur legal expenses.On these bases, we find no difficulty in upholding the
NLRC's award of ten percent (10%) attorney's fees.
● The attorney's fees contracted under the MOA do not refer to the amount of attorney's
fees awarded by the NLRC; the MOA provision on attorney's fees does not have any
bearing at all to the attorney's fees awarded by the NLRC under Article 111 of the
Labor Code.
● The Company's argument that the attorney's fees are unconscionable as they
represent 20% of the amount due or about P21.4 million is more apparent than real.
Since the attorney's fees awarded by the LA pertained to the Union's members as
indemnity for damages, it was totally within their right to waive the amount and give it
to their counsel as part of their contingent fee agreement.
● Beyond the limit fixed by Article 111 of the Labor Code, such as between the lawyer
and the client, the attorney's fees may exceed ten percent (10%) on the basis of
quantum meruit, as in the present case. The SC reversed CA decision and reinstated
LA’s award.
Mariño v. Gamilla, G.R. No. 149763, July 7, 2009.
FACTS:
● Petitioners were among the executive officers and directors (collectively called the
Mariño Group) of the University of Sto. Tomas Faculty Union (USTFU), a labor union
duly organized and registered under the laws of the Republic of the Philippines and
the bargaining representative of the faculty members of the University of Santo Tomas
(UST). Respondents were UST professors and USTFU members.
● The 1986 CBA between UST and USTFU expired on 31 May 1988. Thereafter,
bargaining negotiations ensued between UST and the Mariño Group, which
represented USTFU. They were not able to reach an agreement and a bargaining
deadlock was declared.
● On 1992, UST and USTFU executed a (MOA), whereby UST faculty members
belonging to the collective bargaining unit were granted additional economic benefits
for the fourth and fifth years of the 1988-1993 CBA, specifically, the period from 1
June 1992 up to 31 May 1993.
MEMORANDUM OF AGREEMENT
1.0. The University hereby grants additional benefits to Faculty Members belonging to the
collective bargaining unit xxx, which additional benefits shall amount in the aggregate to
P42,000,000.00[.]
7.0.It is clearly understood and agreed upon that the
aggregate sum of P42 million is chargeable against the share of the faculty members in the
incremental proceeds of tuition fees collected and still to be collected; xxx and incremental
proceeds are, by law and pertinent (DECS) regulations, required to be allotted for the payment
of salaries, wages, allowances and other benefits of teaching and non-teaching personnel for
the UNIVERSITY.
● On 12purportedly signified their consent to the economic benefits granted under the
MOA. USTFU, through its President, petitioner Atty. Mariño, wrote a letter to the UST
Treasurer requesting the release to the union of the sum ofP4.2 million, which was
10% of the P42 million economic benefits package granted by the MOA to faculty
members belonging to the collective bargaining unit. UST remitted the sum of P4.2
million to USTFU. After deducting from the P42 million economic benefits package
several expenses, a net amount of P6, 389,145.04 remained and was distributed to
the faculty members.
● On 15 December 1994, respondents filed with the Med-Arbiter, DOLE- National
Capital Region (NCR), a Complaint for the expulsion of the Mariño Group as USTFU
38
 officers and directors. Alleged in their Complaint that the Mariño Group violated the
rights and conditions of membership in USTFU, particularly by: 1) investing the
unspent balance of the P42 million economic benefits package given by UST without
prior approval of the general membership; 2) simultaneously holding elections viva
voce; 3) ratifying the CBA involving the P42 million economic benefits package; and 4)
approving the attorney’s/agency fees worth P4.2 million in the form of check-off.
● On 16 December 1994, UST and USTFU, represented by the Mariño Group, entered
into a new CBA, effective 1 June 1993 to 31 May 1998 (1993-1998 CBA).
● 24 September 1996, petitioner Collantes, as USTFU Secretary- General, posted
notices in some faculty rooms at UST, informing the union members of a general
assembly. The agenda was the election of new On October 4 1996, the UST
Secretary General headed a general faculty assembly. Respondents were among the
elected officers of USTFU (collectively referred to as the Gamilla Group). Med-Arbiter
DOLE-NCR, nullified the election of the Gamilla Group as USTFU officers. Affirmed on
appeal by the (BLR).
● Respondents filed before the Med-Arbiter, DOLE-NCR, a complaint against the Mariño
Group, as well as the Philippine Foundation for the Advancement of the Teaching
Profession, Inc., Security Bank Corporation, and Bank of the Philippine Islands
claiming that they were the legitimate USTFU officers, having been elected on 4
October 1996. They prayed for an order directing the Mariño Group to cease and
desist from using the name of USTFU and from performing acts for and on behalf of
the USTFU and the rest of the members of the collective bargaining unit.
● The DOLE-NCR Reg. Dir. Held that the Mariño Group, as the executive officers of
USTFU, guilty of violating the provisions of the USTFU Constitution and By-laws. Also,
they violated Article 241(c) and (l) of the Labor Code when among others, they
invested in a bank, without prior consent of USTFU members, the sum of
P9,766,570.01, which formed part of the P42 million economic benefits package.
Additionally, the check-off of P4.2 million collected by the Mariño Group, as
negotiation fees, was invalid. Under Republic Act No. 6728, 70% of the tuition fee
increases should be allotted to academic and non-academic personnel.
● Given that the records were silent as to how much of the P42 million economic
benefits package was obtained through negotiations and how much was from the
statutory allotment of 70% of the tuition fee increases, the DOLE-NCR Regional
Director held that the entire amount was within the statutory allotment, which could not
be the subject of negotiation and, thus, could not be burdened by negotiation fees.
● Bureau of Labor Relations agreed with DOLE-NCR Regional Director. The CA
affirmed the BLR decision.
ISSUE: Whether or not the 10% check-off collected by the Mariño Group from the P42 million
economic benefits package is valid. NO.
HELD:
● UST and USTFU stipulated in their 10 September 1992 MOA that the P42 million
economic benefits package granted by UST to the members of the collective
bargaining unit represented by USTFU, was chargeable against the 70% allotment
from the proceeds of the tuition fee increases collected and still to be collected by
UST.
● As observed by the DOLE-NCR Regional Director, and affirmed by both the BLR and
the Court of Appeals, there is no showing that any portion of the P42 million economic
benefits package was derived from sources other than the 70% allotment from tuition
fee increases of UST.
● Given the lack of evidence to the contrary, it can be conclusively presumed that the
entire P42 million economic benefits package extended to USTFU came from the 70%
allotment from tuition fee increases of UST. Preceding from this presumption, any
deduction from the P42 million economic benefits package, such as the P4.2 million
claimed by the Mariño Group as attorney’s/agency fees, should not be allowed,
because it would ultimately result in the reduction of the statutorily mandated 70%
allotment from the tuition fee increases of UST.
● General rule is that attorney’s fees, negotiation fees, and other similar charges may
only be collected from union funds, not from the amounts that pertain to individual
union members. As an exception, special assessments or other extraordinary fees
may be levied upon or checked off from any amount due an employee for as long as
there is proper authorization by the employee.
● A check-off is a process or device whereby the employer, on agreement with the
Union, recognized as the proper bargaining representative, or on prior authorization
from the employees, deducts union dues or agency fees from the latter's wages and
remits them directly to the Union.
● The Court finds that, in the instant case, the P42 million economic benefits package
granted by UST did not constitute union funds from whence the P4.2 million could
have been validly deducted as attorney’s fees. The P42 million economic benefits
package was not intended for the USTFU coffers, but for all the members of the
bargaining unit USTFU represented, whether members or non-members of the union.
● A close reading of the terms of the MOA reveals that after the satisfaction of the
outstanding obligations of UST under the 1986 CBA, the balance of the P42 million
was to be distributed to the covered faculty members of the collective bargaining unit
in the form of salary increases, returns on paycheck deductions; and increases in
hospitalization, educational, and retirement benefits, and other economic benefits.
● The deduction of the P4.2 million, as alleged attorney’s/agency fees, from the P42
million economic benefits package effectively decreased the share from said package
accruing to each member of the collective bargaining unit.
● The Court further determines that the requisites for a valid levy and check-off of
special assessments, laid down by Article 241(n) and (o), respectively, of the
Labor Code, as amended, have not been complied with in the case at bar. To recall,
these requisites are: (1) an authorization by a written resolution of the majority of all
the union members at the general membership meeting duly called for the purpose;
(2) secretary's record of the minutes of the meeting; and (3) individual written
authorization for check-off duly signed by the employee concerned.
● In an attempt to comply with the foregoing requirements, the Mariño Group caused the
majority of the general membership of USTFU to individually sign a document, which
embodied the ratification of the MOA between UST and USTFU, dated 10 September
1992, as well as the authorization for the check-off of P4.2 million, from the P42
million economic benefits package, as payment for attorney’s fees.
● As held by the Court of Appeals, however, the said documents constitute
unsatisfactory compliance with the requisites set forth in the Labor Code, as
amended, and in the USTFU Constitution and By-Laws, even though individually
signed by a majority of USTFU members.
● The inclusion of the authorization for a check-off of union dues and special
assessments for the Labor Education Fund and attorney’s fees, in the same document
39
 for the ratification of the 10 September 1992 MOA granting the P42 million economic
benefits package, necessarily vitiated the consent ofUSTFU members.
● The failure of the Mariño Group to strictly comply with the requirements set forth by
the Labor Code, as amended, and the USTFU Constitution and By- Laws, invalidates
the questioned special assessment. Substantial compliance is not enough in view of
the fact that the special assessment will diminish the compensation of the union
members. Their express consent is required, and this consent must be obtained in
accordance with the steps outlined by law, which must be followed to the letter. No
shortcuts are allowed.
Gabriel v. The Honorable Secretary of Labor and Employment, G.R. No. 115949, March 16,
2000.
FACTS:
● Petitioners and 5 others compromise the Executive Board of Solidbank union, the
collective bargaining agent for the Solidbank Corporation. Private respondents are
members of said union.
● The union’s Executive Board decided to retain the services of their counsel, Atty.
Lacsina, in connection with negotiations for a new CBA.
● A general membership meeting was called where majority of union members
approved a resolution confirming the decision to engage the services of the union’s
counsel. The resolution provided that 10% of the total economic benefits that may be
secured be given to the counsel at attorney’s fees. Also, it contained an authorization
for Solidbank Corporation to check-off said attorney’s fees the first lump sum of
payment of benefits to the employees under the new CBA as well as turnover said
amount to Atty. Lacsina or his representative.
● Private respondents instituted a complaint against the petitioners and the union
counsel before the Department of Labor and Employment (DOLE) for illegal deduction
of attorney’s fees as well as for quantification of the benefits in the 1992 CBA.
Petitioners moved for dismissal.
● Med-arbiter granted the complaint; Secretary of Labor partially granted and the Order
of the Med-Arbiter dated 22 April 1993 is hereby modified as follows: (1) that the
ordered refund shall be limited to those union members who have not signified their
conformity to the check-off of attorney’s fees; and (2) the directive on the payment of
5% attorney’s fees should be deleted for lack of basis.
● On MR: affirmed resolution with following modification: (1) the union’s counsel be
dropped as party litigant; (2) the workers through their union should be made to
shoulder the expenses incurred for the attorney's services. Accordingly, the
reimbursement should be charged to the union's general fund/account.
ISSUE: Whether or not the SOLE erred in ruling that the workers through their union should be
made to shoulder the expenses incurred for the attorney's services (for the CB negotiations) and
that the reimbursement should be charged to the union's general fund/account. NO.
HELD:
● Private respondent’s contention: claim that the check-off provision in question is illegal
because it was never submitted for approval at a general membership meeting called
for the purpose and that it failed to meet the formalities mandated by the Labor Code.
● In check-off, the employer, on agreement with the Union, or on prior authorization
from employees, deducts union dues or agency fees from the latter’s wages and
remits them directly to the union. It assures continuous funding; for the labor
organization. As this Court has acknowledged, the system of check-off is primarily for
the benefit of the union and only indirectly for the individual employees. The pertinent
legal provisions on check-offs are found in Article 222 (b) and Article 241 (o) of the
Labor Code.
● Art. 241 has three (3) requisites for the validity of the special assessment for union’s
incidental expenses, attorney’s fees and representation expenses. These are: (1)
authorization by a written resolution of the majority of all the members at the general
membership meeting called for the purpose; (2) secretary’s record of the minutes of
the meeting; and (3) individual written authorization for check off duly signed by the
employees concerned.
● Clearly, attorney’s fees may not be deducted or checked off from any amount due to
an employee without his written consent.
● The Court finds that the General Membership Resolution of October 19, 1991 of the
SolidBank Union did not satisfy the requirements laid down by law and jurisprudence
for the validity of the ten percent (10%) special assessment for union’s incidental
expenses, attorney’s fees and representation expenses. There were no individual
written check off authorizations by the employees concerned and so the assessment
cannot be legally deducted by their employer.
● Article 222 (b) of the Labor Code prohibits the payment of attorney's fees only when it
is effected through forced contributions from workers from their own funds as
distinguished from the union funds.
● The purpose of the provision is to prevent imposition on the workers of the duty to
individually contribute their respective shares in the fee to be paid the attorney for his
services on behalf of the union in its negotiations with management. The obligation to
pay the attorney's fees belongs to the union and cannot be shunted to the workers as
their direct responsibility. Neither the lawyer nor the union itself may require the
individual worker to assume the obligation to pay attorney's fees from their own
pockets.
● Thus the SC held that the SOLE is correct in ruling that the workers through their
union should be made to shoulder the expenses incurred for the services of a lawyer.
And accordingly, the reimbursement should be charged to the union's general fund or
account. No deduction can be made from the salaries of the concerned employees
other than those mandated by law.
Vengco v. Trajano, G.R. No. 74453, May 5, 1989.
FACTS:
● The Management of the Anglo-American Tobacco Corporation and the Kapisanan ng
Manggagawa sa Anglo-American Tobacco Corporation (FOITAF) entered into a
compromise agreement.
● The company is to pay the union members the sum of P150k for their claims arising
from the unpaid emergency cost of living allowance (ECOLA) and other benefits which
were the subject of their complaint before the Ministry of Labor.
● Respondent Emmanuel Timbungco (union president) received the money paid in
installments and distributed the amount among the union members.
● Petitioners Vengco, et al., who are union members noted that Timbungco was not
authorized by the union workers to get the money; and that ten percent (10%) of the
P150k had been deducted to pay for attorney's fees without their written authorization
in violation of Article 242(o) of the Labor Code.
40
 ● They demanded from Timbungco an accounting of how the P150k was distributed to
the members. Timbungco did not give in to their demand. Thus Vengco, et al. filed a
complaint with the Ministry of Labor.
● Timbungco alleged among others, that he was authorized by a resolution signed by
the majority of the union members to receive and distribute the P150k among the
workers; that the (10%) attorney's fees was in relation to the claim of the local union
for payment of emergency cost of living allowance before the Ministry of Labor which
is totally distinct and separate from the negotiation of the CBA; and that the (10%)
deduction was in accordance with Section II, Rule No. VIII, Book No. III of the Rules
and Regulations implementing the Labor Code and therefore, no authorization from
the union members is required.
● Med-arbiter dismissed the complaint. Vengco et al appealed to the BLR. Director of
the Bureau of Labor Relations granted the appeal and ordered Timbungco to render a
full accounting of the 150k and to publish in the union’s bulletin board the list of all
recipient union members and the respective amounts they have received, within ten
(10) days from receipt.
● OIC Calaycay set aside the decision and ordered an audit examination of the books of
account of the union.
● Vengco, et al, sought reconsideration of the order and contended that the examination
of the books of accounts of the union is irrelevant considering that the issue involved
in the case does not consist of union funds but back pay received by the union
members from the company.
● Dir. Trajano denied the MR and affirmed the audit of the books of account.
ISSUE: Whether or not Timbungco is guilty of illegally deducting 10% attorneys' fees from
petitioners' backwages. YES
HELD:
● Timbungco maintains that the "Kapasiyahan" gave him the authority to make the
deduction. This contention is unfounded. Contrary to his claim, the undated
"Kapasiyahan" or resolution did not confer upon him the power to deduct 10% of the
P150,000.00 despite the alleged approval of the majority of the union workers. Article
241 (o) of the Labor Code provides:
● ART. 241. Rights and conditions of membership in a labor organization. — The
following are the rights and conditions of membership in a labor organization.
xxx (o) Other than for mandatory activities under the Code, no special assessment,
attorney's fees, negotiation fees or any other extraordinary fees may be checked off
from any amount due an employee without an individual written authorization duly
signed by an employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction.
● It is very clear from the provision that attorney's fees may not be deducted or checked
off from any amount due to an employee without his written consent except for
mandatory activities under the Code. A mandatory activity has been defined as a
judicial process of settling dispute laid down by the law.
● It requires the individual written authorization of each employee concerned, to make
the deduction of attorney's fees valid.
● Likewise, the court finds that the other "Kapasiyahan" dated September 18,1981
submitted by Timbungco belied his claim that he was authorized by the union workers
to receive the sum of P150,000.00 on their behalf. The pertinent portion of the said
"Kapasiyahan" provides: 3. Na sa dahilang hindi bigla ang pagbabayad sa nasabing
"CLAIM" bukod pa sa marami kaming naghati-hati sa nasabing halaga ipinapasiya
naming na kusang-loob na kunin ang aming bahagi sa aming kapisanan sa unang
linggo ng Disyembre, 1981 at ito'y ipinaalam namin sa Pangulo ng Kapisanan na si
Ginoong Emmanuel Timbungco.
● The above-quoted statement merely indicated the intention of the workers to get their
claim on the first week of December, 1981 and to inform Timbungco of their intention.
Clearly, this statement cannot be construed to confer upon Timbungco the authority to
receive the fringe benefits for the workers.
● Absent such authority, Timbungco should not have kept the money to himself but
should have turned it over to the Union Treasurer. He, therefore, exceeded his
authority as President of the Union.
Galvadores v. Trajano, G.R. No. 70067, September 15, 1986.
Pacific Banking Corporation v. Clave, G.R. No. L-56965, March 7, 1984.
Doctrine: Attorney’s fees may be charged against union funds in an amount to be agreed upon
by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null
and void.
Facts:
· This case is about the legality of deducting from the monetary benefits
awarded in a collective bargaining agreement the attorney’s fees of the
lawyer who assisted the union president in negotiating the agreement.
· 1979, there had been negotiations between the Pacific Banking
Corporation and the Pacific Banking Corporation Employees
Organization (PABECO) for a collective bargaining agreement for 1979
to 1981. Because of a deadlock, the Minister of Labor assumed
jurisdiction over the controversy. The Deputy Minister rendered a
decision directing the parties to execute a CBA in accordance with the
terms and conditions set forth in his decision
· Lawyer Juanito M. Saavedra’s earliest recorded participation in the
case was on July 15 and 27, 1979 when he filed a motion for
reconsideration and a supplemental motion in behalf of the union.
· Even before the formalization of the CBA on June 3, 1980, Saavedra
on March 24, 1980 filed in the case his notice of attorney ‘s lien.
· The union officials requested the bank to withhold around P345,000
out of the total benefits as ten percent attorney’s fees of Saavedra. At
first, the bank interposed no objection to the request in the interest of
harmonious labor-management relations.In theory, the actual ten
percent attorney’s fees may amount to more than one million pesos
· For nearly a year, the Office of the President in four resolutions
wrestled with the propriety of Saavedra’s ten percent attorney’s fees. In
a resolution dated May 29, 1980, Presidential Executive Assistant
Jacobo C. Clave refused to intervene in the matter. He ruled that the
payment of attorney’s fees was a question that should be settled by the
union and its lawyer themselves as provided in Artile111 of the Labor
Code: Art. 111. Attorney’s fees. — (a) In cases of unlawful withholding
41
 of wages the culpable party may be assessed attorney’s fees
equivalent to ten percent of the amount of wages recovered.
"(b) It shall be unlawful for any person to demand or accept, in any judicial
or administrative proceedings for the recovery of wages, attorney’s
fees which exceed ten percent of the amount of wages
recovered."cralaw virtu
· The last resolution dated April 13, 1981, Deputy Presidential Executive
Assistant Joaquin T. Venus, Jr. ordered the bank to pay the union
treasurer the said attorney’s fees less the amounts corresponding to
the protesting employees. He held that the following article 222 of the
Labor Code, as amended by Presidential Decree No. 1691, effective
May 1, 1980 (before the formalization of the CBA award) had no
retroactive effect to the case:jgc:chanrobles.com.ph
"ART. 222. Appearances and Fees. — . . . (b) No attorney’s fees,
negotiation fees or similar charges of any kind arising from any
collective bargaining negotiations or conclusion of the collective
agreement shall be imposed on any individual member of the
contracting union: Provided, however, that attorney’s fees may be
charged against union funds in an amount to be agreed upon by the
parties. Any contract, agreement or arrangement of any sort to the
contrary shall be null and void."
Issue: Whether or not the attorney’s fees can be deducted from the monetary benefits
from the CBA?
Ruling: NO.
· Under the circumstances, the Office of the President had no jurisdiction to make
an adjudication on Saavedra’s attorney’s fees. The case was appealed with
respect to the CBA terms and conditions, not with respect to attorney’s fees.
Although the fees were a mere incident, nevertheless, the jurisdiction to fix the
same and to order the payment thereof was outside the pale of Clave’s appellate
jurisdiction. He was right in adopting a hands-off attitude in his first resolution and
holding that the payment of the fees was a question between the lawyer and the
union.
· the case is covered squarely by the mandatory and explicit prescription of article
222 which is another guarantee intended to protect the employee against
unwarranted practices that would diminish his compensation without his
knowledge and consent as provided in Art 242 of the Labor Code:
ART. 242. Rights and conditions of membership in a labor
organization. — The following are the rights and conditions of membership
in a labor organization:jgc:chanrobles.com.ph
"(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized by a
written resolution of a majority of all the members at a general membership
meeting duly called for the purpose. The secretary of the organization shall
record the minutes of the meeting including the list of all members present,
the votes cast, the purpose of the special assessment or fees and the
recipient of such assessment or fees. The record shall be attested to by the
president;.
"(o) Other than for mandatory activities under the Code, no
special assessment, attorney’s fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due an employee
without an individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and beneficiary
of the deduction;
· There is no doubt that lawyer Saavedra is entitled to the payment of his fees but
article 222 ordains that union funds should be used for that purpose. The amount
of P345,000 does not constitute union funds. It is money of the employees. The
union, not the employees, is obligated to Saavedra.
e. Union Information
Art. 250. Procedure in collective bargaining. The following procedures shall be observed in
collective bargaining:
1. When a party desires to negotiate an agreement, it shall serve a written notice upon
the other party with a statement of its proposals. The other party shall make a reply
thereto not later than ten (10) calendar days from receipt of such notice;
2. Should differences arise on the basis of such notice and reply, either party may
request for a conference which shall begin not later than ten (10) calendar days from
the date of request.
3. If the dispute is not settled, the Board shall intervene upon request of either or both
parties or at its own initiative and immediately call the parties to conciliation meetings.
The Board shall have the power to issue subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty of the parties to participate fully and
promptly in the conciliation meetings the Board may call;
4. During the conciliation proceedings in the Board, the parties are prohibited from doing
any act which may disrupt or impede the early settlement of the disputes; and
5. The Board shall exert all efforts to settle disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator. (As amended by Section 20, Republic
Act No. 6715, March 21, 1989)
Continental Cement Corporation Labor Union (NLU) v. Continental Cement Corporation,
G.R. No. 51544, August 30, 1990.
f. Enforcement and Remedies
• Articles 250, last paragraph;
Art 252, LC
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
42
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 grievances 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.
Art 289,LC
Who are liable when committed by other than natural person. If the offense is committed by
a corporation, trust, firm, partnership, association or any other entity, the penalty shall be
imposed upon the guilty officer or officers of such corporation, trust, firm, partnership,
association or entity.
Art 303,LC
ART. 303. [288] Penalties.229 Except as otherwise provided in this Code, or unless the acts
complained of hinge on a question of interpretation or implementation of ambiguous provisions
of an existing collective bargaining agreement, any violation of the provisions of this Code
declared to be unlawful or penal in nature shall be punished with a fine of not less than One
Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00), or
imprisonment of not less than three months nor more than three years, or both such fine and
imprisonment at the discretion of the court.
In addition to such penalty, any alien found guilty shall be summarily deported upon completion
of service of sentence.
Any provision of law to the contrary notwithstanding, any criminal offense punished in this Code
shall be under the concurrent jurisdiction of the Municipal or City Courts and the Courts of First
Instance.
ART. 304. [289] Who are Liable When Committed by Other Than Natural Person. If the offense
is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty
shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership,
association or entity.
Mendoza v. Officers of Manila Water Employees Union (MWEU), G.R. No. 201595, January
25, 2016.
Diokno v. Cacdac, G.R. No. 168475, July 4, 2007.
Employees Union of Bayer Philippines, FFW v. Bayer Philippines, Inc., G.R. No. 162943,
June 15, 2005
Rodriguez v. Galvadores, G.R. Nos. 76579-82, August 31, 1988.
Duyag v. Inciong, G.R. No. L-47775, July 5, 1980.
FACTS:
The plaintiffs in this case are arrastre checkers at E. Razon, Inc. in the South Harbor, Port Area,
Manila as well as bona fide members of the Associated Port Checkers and Workers Union.
Meanwhile, the defendants are the officers of the union, who, respectively, are the president (for
more than twenty years), treasurer, vice-president and auditor of the union.
The reason for this case are the unauthorized increase in their monthly union contributions, and
deduction on their midyear bonus as contribution to the union. These increases and deduction
happened in the years 1972, 1973, 1975, and 1976. Also, E. Razon remitted the employees’
profit share through the union which the union failed to distribute completely. These actions was
lead by the union president, Rica Manalad. Manalad also allowed disbursements of retirement
funds to some members without the concurrence of the required number of members. While this
case was pending, Manalad and the union treasurer, Leano, presented to the court that their
actions were already ratified by 90% of the members, the med arbiter however, though this case
is already moot still chose to look in the case since these are violations of the constitutional by
laws of the union.
As the case progress, it was discovered that Manalad had other union memberships and offices
assumed in other unions and labor organization which she had questionable transactions with
using their union. With the given reasons, the Med Arbiter ordered the removal of the private
respondents as officers of the union and directed them to reimburse to the members thereof the
amounts illegally collected from them.
On appeal with the Director of Labor Relations, it was reversed. The Director held that resort to
intra-union remedies is not necessary and that the five complainants have the rights and
personality to institute the proceedings for the removal of the respondents, to recover the
amount illegally collected or withheld from them and to question illegal disbursements and
expenditure of union funds.
However, the Director ruled that the power to remove the union officers rests in the members
and that the Bureau of Labor Relations generally has nothing to do with the tenure of union
officers which "is a political question". The Director further ruled that his office has jurisdiction to
look into the charge of illegal disbursements of union funds. He directed the Labor Organization
Division of the Bureau to examine the books of account and financial records of the union and to
submit a report on such examination. This decision was affirmed by the Under Secretary of
Labor.
ISSUE: Whether or not the Director of Labor Relations is correct in reversing the decision of the
Med Arbiter?
HELD:
No, the SC held that the Labor Arbiter did not err in removing the respondents as union officers.
The membership of Manalad and Puerto in another union is a sufficient ground for their removal
under the constitution and by-laws of the union. In Manalad's case, his organization of a family-
owned corporation competing with. the union headed by him renders it untenable that he should
remain as union president.The petitioners are entitled to the refund of the union dues illegally
collected from them. The union should be the proper refund.bThe Director of Labor Relations
erred in holding that, as a matter of policy, the tenure of union office being a "political question
is, generally, a matter outside his Bureau's jurisdiction and should be pa upon by the union
members themselves.
WHEREFORE, (1) that portion of the decision of the med-arbiter, removing respondents
Manalad, Leano and Puerto as union officers, is affirmed. (Respondent Amparo is no longer an
officer of the union.)
(2) We also affirm that portion of the decision of the Director of Labor Relations, directing the
Bureau's Labor Organization Division to examine the books of accounts and records of the
Associated Port Checkers and Workers Union and to submit a report on such examination within
a reasonable time.
(3) We declare that the five petitioners are entitled to a refund of the union dues illegally
collected from them. The Director of Labor Relations is ordered to require the union to make the
refund within twenty days from notice to his counsel of the entry of judgment in this case. Costs
against the private respondents.
8. Union Chartering and Affiliation
43
a. Nature and Purpose
Philippine Skylanders, Inc. v. National Labor Relations Commission, G.R. No. 127374,
January 31, 2002.
FACTS:
Nov 1993, the Philippine Skylanders Employees Association (PSEA), a local labor union
affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU),
won in the certification election conducted among the rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU
(PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of
disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty
toward its members. PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association - National Congress
of Workers (PSEANCW), and allowed the former officers of PSEA-PAFLU to continue occupying
their positions as elected officers PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which
was immediately registered with DOLE.
PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's
audited financial statement. Ayroso explained that with the dismissal of PSEA-WATU's election
protestthe time was ripe for the parties to enter into a collective bargaining agreement. PSI
through its personnel manager Francisco Dakila denied the request citing as reason PSEA's
disaffiliation from PAFLU and its subsequent affiliation with NCW. PAFLU through Serafin
Ayroso filed a complaint for unfair labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents.
Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and
their respective officers guilty of unfair labor practice.
NLRC upheld the Decision of the Labor Arbiter and conjectured that since an election protest
questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent was pending
resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU, join
another national federation and subsequently enter into a collective bargaining agreement with
its employer-company.
ISSUE: Whether or not PSEA, which is an independent and separate local union, may validly
disaffiliate from PAFLU pending the settlement of an election protest questioning its status as
the sole and exclusive bargaining agent of PSI's rank and file employees.
HELD:
YES. The pendency of an election protest involving both the mother federation and the local
union did not constitute a bar to a valid disaffiliation.
Reasoning In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. the SC upheld the
right of local unions to separate from their mother federation on the ground that as separate and
voluntary associations, 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.
Yet the local unions remain the basic units of association, free to serve their own interests
subject to the restraints imposed by the constitution and by-laws of the national federation, and
free also to renounce the affiliation upon the terms laid down in the agreement which brought
such affiliation into existence.
Policy considerations dictate that in weighing the claims of a local union as against those of a
national federation, those of the former must be preferred. Parenthetically though, the desires of
the mother federation to protect its locals are not altogether to be shunned. It will however be to
err greatly against the Constitution if the desires of the federation would be favored over those of
its members. If it were otherwise, instead of protection, there would be disregard and neglect of
the lowly workingmen.
Disposition Petition is granted.
Filipino Pipe and Foundry Corporation v. National Labor Relations Commission, G.R. No.
115180, November 16, 1999.
FACTS:
- National Labor Union-Trade Union Congress of the Philippines (NLU-TUCP) filed w/ the
Ministry of Labor and Employment, in behalf of its local chapter, the Filipino Pipe Workers Union-
National Labor Union (FPWU-NLU), a notice of strike signed by its national president, Atty.
Lerum, against Filipino Pipe and Foundry Corporation (Fil Pipe), alleging union busting and non
implementation of the Collective Bargaining Agreement. A conciliation conference was set, but
before the conciliation was done, the FPWU-NLU staged a strike.
Fil Pipe filed petition to declare the strike illegal and for damages against FPWU-NLU, NLU-
TUCP and Lerum. Later, Fil Pipe moved to dismiss the complaint against FPWU-NLU.
Labor Arbiter declared the strike illegal, and ordered NLU-TUCP to pay damages. Lerum was
absolved. Appeals were filed. NLRC set aside decision for lack of merit in so far as NLU-TUCP
and Lerum is concerned.
Filipino Pipe: NLRC erred in declaring that NLU-TUCP and Lerum are not primarily responsible,
and that the company has lost its cause of action. They argued that the responsibility for the
damages allegedly sustained by petitioner company on account of the illegal strike, should be
borne by NLU-TUCP and Lerum, for having directly participated in aiding and abetting the illegal
strike. Also, that FPWUNLU is a mere agent of respondent NLU-TUCP, because FPWUNLU, a
local union, cannot act as the principal of respondent NLUTUCP, a mother federation, because it
is not a legitimate labor organization.
ISSUES:
1. Whether or not the strike was illegal
2. Whether or not NLU-TUCP and Lerum are primarily responsible
HELD:
1. Yes, 1st, the strike staged by FPWU-NLU was baseless. 2nd, the union failed to serve the
company a copy of the notice of strike (see Sec 3 Rule XXII, Book V, Implementing Rules). 3rd,
the strike blatantly disregarded the prohibition on the doing of any act which may impede or
disrupt the conciliation proceedings (see Sec 6)
2. No, 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. The same is true even if the local union is not a legitimate labor organization
The direct and primary responsibility for the damages fall on the local union FPWU, being the
principal, and not on respondent NLUTUCP, a mere agent of FPWU-NLU which assisted the
latter in filing the notice of strike. Being just an agent, the notice of strike filed by Lerum is
deemed to have been filed by its principal, the FPWU-NLU. Having thus dismissed the claim for
damages against the principal, FPWU-NLU, the action for damages against its agent,
respondent NLU-TUCP, and Atty. Lerum, has no more leg to stand on and should also be
dismissed.
44
Disposition Petition is dismissed.
ALLIANCE OF NACIONALIST AND GENUINE LABOR ORGANIZATION (ANGLO-KMU) vs.
SAMAHAN NG MGA MANGGAGAWANG NAGKAKAISA SA MANILA BAY SPINNING MILLS
AT J.P. COATS (SAMANA BAY), G.R. NO. 118562 July 5, 1996
Doctrine:
Disaffiliation of a local union from its mother union is valid even if certain
procedural requirements for a valid disaffiliation was not complied with, provided the
general membership of the local union ratified the disaffiliation action.
Facts:
Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for
short) is a duly registered labor organization. Respondent union Samahan Ng mga
Manggagawang Nagkakaisa sa Manila Bay Spinning Mills and J.P. Coats (SAMANA BAY for
short) is its affiliate. In representation of SAMANA BAY, ANGLO entered and concluded a CBA
with Manila Bay Spinning Mills and J.P. Coats Manila Bay Inc. (hereinafter referred to as the
corporations) on November 1, 1991. In December 1993, SAMANA BAY decided to disaffiliate
from ANGLO because of the latter's dereliction of duty in promoting and advancing SAMANA
BAY's welfare. There were also alleged cases of corruption involving ANGLO officers. The
disaffiliation was confirmed by the members of SAMANA BAY unanimously. Apparently, ANGLO
furnished the corporations copies of SAMANA BAY's
resolution to disaffiliate. The corporations refused to honor the disaffiliation. In response to this,
a petition to stop remittance of federation dues to ANGLO was filed by SAMANA BAY with the
Bureau of Labor Relations. ANGLO counter-acted by unseating all officers and board members
of SAMANA
BAY and appointing in their stead new officers who were duly recognized by the corporations.
ANGLO submitted a position paper with the Med-Arbiter, contending that the disaffiliation was
void considering that a CBA was still existing and the freedom period has not set in. The Med-
Arbiter resolved that the disaffiliation was void, but upheld the illegality of the ousting by ANGLO
of the SAMANA BAY officers. Both parties appealed to the DOLE. The DOLE reversed the Med-
Arbiter's decision and ultimately ruled for SAMANA BAY. ANGLO's MR to the DOLE was denied
hence it filed a petition for certiorari with the Supreme Court.
Issues:
1.) WON the disaffiliation of SAMANA BAY from ANGLO was valid
2.) WON the unilateral ousting by ANGLO of officers and board members of
SAMANA BAY was valid
Ruling:
1.) YES.
The Court will not bend the principle that all employees enjoy the right to self-organization and to
form and join labor organizations of their own choosing for the purpose of collective bargaining
due to a mere procedural defect. The law is not without exceptions. Settled is the rule that a
local union has the right to disaffiliate from its mother union when circumstances warrant
(Volkshel
Labor Union v. Bureau of Labor Relations)
GENERAL RULE: a labor union may disaffiliate from its mother union to form a local/
independent union only during the 60-day freedom period immediately preceding the expiration
of a CBA.
EXCEPTION: Even before the onset of the freedom period, disaffiliation may be carried out
when there is a shift of allegiance on the part of the majority of the members of the union.
(Associated Workers Union-PTGWO vs. NLRC) In this case, there was a unanimous
confirmation by the members of SAMANA BAY of the disaffiliation - clearly a shift of allegiance
of the majority (if not all) of the union members.
2.) NO.
The mere act of disaffiliation does not divest the local union of its personality and neither does
this give the mother federation any license to act independently of the local union. A local union
does not owe its existence to the mother federation with which it is affiliated. There is only a
contract of agency wherein the mother federation acts in representation of its affiliate local
union. A local labor union is a separate and distinct unit, primarily designed to secure and
maintain an equality of bargaining power between the employer and their employee-members.
By SAMANA BAY'S disaffiliation from ANGLO, the vinculum that previously bond the two entities
was completely severed.
Therefore, ANGLO was divested of any and all power to act in representation of SAMANA BAY.
Hence, any act by ANGLO affecting SAMANA BAY, including the ouster of its officers, is without
force and effect.
Progressive Development Corporation v. The Honorable Secretary, Department of Labor
and Employment, G.R. No. 96425, February 4, 1992.
FACTS:
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.
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.
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 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.
ISSUE: Whether or not a local union need to be a Legitimate Labor Union on despite its
issuance of charter certificate.
RULING:
Yes. 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.”
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.”
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
45
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, whereas 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.
b. Registration
San Miguel Corporation Employees Union – Philippine Transport and General Workers
Organization (SMCEUPTGWO) v. San Miguel Packaging Products Employees Union –
Pambansang Diwa ng Manggagawang Pilipino (SMPEU-PDMP), G.R. No. 171153,
September 12, 2007.
FACTS:
Petitioner is the incumbent bargaining agent for the regular monthly-paid rank and file
employees of the Three Divisions of San Miguel Corporation (SMC). It had been the
certified bargaining agent for 20 years—from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino
(PDMP). PDMP issued a Charter Certificate to Respondent. In compliance with registration
requirements, RESPONDENT submitted the requisite documents to the BLR for the
purpose of acquiring legal personality.
Upon submission of its charter certificate and other documents, RESPONDENT was issued
by the BLR a Certificate of Creation of Local or Chapter.
PETITIONER then filed with the DOLE-NCR a petition seeking the cancellation of
RESPONDENT’s registration and its dropping from the rolls of legitimate labor
organizations. PETITIONER alleged:
a. That RESPONDENT committed fraud and falsification and non-compliance
to registration requirement; and
b. That PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter.
DOLE-NCR dismissed PETITIONER’s petition and ruled that RESPONDENT is allowed to
directly create a local or chapter. However, it found that RESPONDENT did not comply with
the 20% membership requirement and, thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate labor organizations.
RESPONDENT then appealed to the BLR, which declared that, as a chartered local union,
PETITIONER is not required to submit the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining unit where it seeks to
operate.
Further, although PDMP is considered as a trade union center, it is a holder of Registration
Certificate issued by the BLR, giving it the status of a legitimate labor organization. Thus,
PDMP can charter or create a local, such as RESPONDENT.
PETITIONER filed a Petition for Certiorari with the CA, which affirmed the assailed decision
and resolution.
ISSUE: Is RESPONDENT a legitimate Labor Organization, having been created via chartering
by PDMP, which is a Trade Union Center?
Held:
No, it is not. The PDMP failed to comply with the registration requirements of
the Respondent to become a local or chapter. Although PDMP as a trade union center is a
legitimate labor organization, it has no power to directly create a local or chapter, such as
RESPONDENT. Thus, RESPONDENT cannot be created under the more lenient requirements
for chartering, but must have complied with the more stringent rules for creation and
registration of an independent union, including the 20% membership requirement. There
is no legal justification to support the conclusion that a trade union center is allowed to directly
create a local or chapter through chartering.
If the law’s intent were otherwise, the law could have so easily and conveniently
included “trade union centers” in identifying the labor organizations allowed to charter a chapter
or local. Since under the pertinent status and applicable implementing rules, the power granted
to labor organizations to directly create a chapter or local through chartering is given to a
federation or national union, then a trade union center is without authority to charter directly.
Disposition: Petition GRANTED. RESPONDENT’s Certificate of Registration CANCELLED.
I. Definition
A legitimate labor organization is defined as “any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.” Legitimate
labor organizations have exclusive rights under the law which cannot be exercised by non-
legitimate unions, one of which is the right to be certified as the exclusive representative of all
the employees in an appropriate collective bargaining unit for purposes of collective bargaining.
II. Registration
1. The procedure for registration of a local or chapter of a labor organization is
provided in the Implementing Rules, which enunciates a two-fold procedure for the
creation of a chapter or a local.
a. The first involves the affiliation of an independent union with a federation or
national union or industry union.
b. The second involves the direct creation of a local or a chapter through the
process of chartering.
2. The intent of the law in imposing less requirements in the case of a branch or local of
a registered federation or national union is to encourage the affiliation of a local union
with a federation or national union in order to increase the local union’s bargaining
powers respecting terms and conditions of labor.
3. Once a certificate of registration is issued to a union, its legal personality cannot be
subject to collateral attack—it may be questioned only in an independent petition for
cancellation.
4. There is no legal justification to support the conclusion that a trade union center is
allowed to directly create a local or chapter through chartering.
5. If the law’s intent were otherwise, the law could have so easily and conveniently
included “trade union centers” in identifying the labor organizations allowed to charter
a chapter or local; Since under the pertinent staPetitioners and applicable
implementing rules, the power granted to labor organizations to directly create a
chapter or local through chartering is given to a federation or national union, then a
trade union center is without authority to charter directly.
Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment – Office of The
Secretary, G.R. No. 157117, November 20, 2006.
FACTS: Herein private respondents Coastal Subic Bay Terminal, Inc. Rank and File Union
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed
separate petitions for certification election before the Med-Arbiter of Regional Office No. III.
CSBTI-RFU insists that it is a legitimate labor organization issued a charter certificate by the
Associated Labor Union (ALU) and CSBTI-SU by the Associated Professional, Supervisory,
Office and Technical Employees Union (APSOTEU). They also alleged that the establishment
they sought to operate in was unorganized. Petitioner Coastal Subic Bay Terminal, Inc. opposed
both petitions alleging that CSBTI-RFU and CSBTI-SU were not legitimate labor organizations
and the proposed bargaining units were not particularly described.
46
The Med-Arbiter dismissed both petitions, holding that ALU and APSOTEU are one and the
same federation having a common set of officers. Thus, the two respondent unions were in
effect affiliated with only one federation. Both parties appealed to the Secretary of Labor, who
reversed the said decision stating that they have separate legal personalities to file their
separate petitions for certification election. APSOTEU is also a legitimate labor organization
because it was properly registered pursuant to the 1989 Revised Rules and Regulations
implementing Republic Act No. 6715. ALU and APSOTEU are also separate and distinct labor
unions having separate certificates of registrations from DOLE. They have different sets of
locals. The two respondent unions are legitimate labor organizations chartered respectively by
ALU and APSOTEU. Thus, the Secretary ordered the holding of separate certification election,
with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-
TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES
UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months immediately
preceding the issuance of this decision, shall be the basis for determining the qualified list of
voters.
On appeal, the Court of Appeals affirmed the Secretary. Hence, this instant petition.
ISSUES: Can the supervisory and rank-and-file unions file separate petitions for certification
election?
HELD: First, with respect to APSOTEU’s status: Petitioner argues that APSOTEU improperly
secured its registration from DOLE Regional Director and not from the BLR. Under Article 235 of
the Labor Code, “applications for registration shall be acted upon by the Bureau, which means
the BLR and/or the Labor Relations Division in the Regional Offices of the Department of Labor.”
Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code
further provides that “any national labor organization or labor federation or local union may file
an application for registration with the Bureau or the Regional Office where the applicant’s
principal offices is located.”
Section 1, Rule III of Book V of the Implementing Rules as amended by Department
Order No. 9 also provides that “the application for registration of any federation, national or
industry union or trade union center shall be filed with the Bureau. Where the application is filed
with the Regional Office, the same shall be immediately forwarded to the Bureau…The
application for registration of an independent union shall be filed with and acted upon by the
Regional Office where the applicant’s principal office is located.”
DOLE issued Department Order No. 40-03 further amending Book V of the above
implementing rules, which provides that “applications for registration of labor organizations shall
be filed either with the Regional Office or with the BLR”
Even after the amendments, the rules did not divest the Regional Office and the
BLR of their jurisdiction over applications for registration by labor organizations. The
amendments to the implementing rules merely specified that when the application was
filed with the Regional Office, the application would be acted upon by the BLR.
In case at bar, APSOTEU’s principal office is in Diliman, Quezon City. Its registration was
filed with the NCR Regional Office. At that time, the law applicable was Section 2, Rule Ii, Book
V of the Implementing Rules. Thus, APSOTEU’s certificate of registration is valid.
Now with the issue: The answer is NO. Once a labor union attains the status of a legitimate
labor organization, it continues as such until its certificate of registration is cancelled or
revoked in an independent action for cancellation. The legal personality of a labor
organization cannot be collaterally attacked. Thus, when the personality of the labor
organization is questioned in the same manner the veil of corporate fiction is pierced, the action
partakes the nature of a collateral attack. Hence, in the absence of any independent action for
cancellation of registration against either APSOTEU or ALU, and unless and until their
registrations are cancelled, each continues to possess a separate legal personality. The CSBTI-
RFU and CSBTI-SU are therefore affiliated with distinct and separate federations, despite the
commonalities of APSOTEU and ALU.
Under the Implementing Rules, a chartered local union acquires legal personality through the
charter certificate issued by a duly registered federation or national union, and reported to the
Regional Office in accordance with the rules implementing the Labor Code. A local union does
not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation does not
divest the local union of its own personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise to a contract of agency, where
the former acts in representation of the latter. Hence, local unions are considered principals
while the federation is deemed to be merely their agent. As such principals, the unions are
entitled to exercise the rights and privileges of a legitimate labor organization, including the right
to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.
The purpose of affiliation of the local unions into a common enterprise is to increase the
collective bargaining power in respect of the terms and conditions of labor. When there is
commingling of officers of a rank-and-file union with a supervisory union, the
constitutional policy on labor is circumvented. Labor organizations should ensure the
freedom of employees to organize themselves for the purpose of leveling the bargaining process
but also to ensure the freedom of workingmen and to keep open the corridor of opportunity to
enable them to do it for themselves.
Under Article 245 of the Labor Code, supervisory employees are not eligible for membership in a
labor union of rank-and-file employees. The supervisory employees are allowed to form their
own union but they are not allowed to join the rank-and-file union because of potential conflicts
of interest. Further, to avoid a situation where supervisors would merge with the rank-and-
file or where the supervisors’ labor union would represent conflicting interests, a local
supervisors’ union should not be allowed to affiliate with the national federation of
unions of rank-and-file employees where that federation actively participates in the union
activity within the company. Thus, the limitation is not confined to a case of supervisors
wanting to join a rank-and-file union. The prohibition extends to a supervisors’ local union
applying for membership in a national federation the members of which include local unions of
rank-and-file employees. In De La Salle University Medical Center and College of Medicine v.
Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single federation. In addition,
the supervisors must have direct authority over the rank-and-file employees.
In the instant case, the national federations that exist as separate entities to which the rank-and-
file and supervisory unions are separately affiliated with, do have a common set of officers. In
addition, APSOTEU, the supervisory federation, actively participates in the CSBTI-SU while
ALU, the rank-and-file federation, actively participates in the CSBTI-RFU, giving occasion to
possible conflicts of interest among the common officers of the federation of rank-and-file and
the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and
ALU, the supervisory and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately petition for certification elections.
Thus, petition is granted.
Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No. 116194, February 2, 2000.
FACTS:
Petitioner is a duly-registered banking institution in Cebu, while private respondent APSOTEU-
TUCP was a labor organization duly-registered with the Labor Department. APSOTEU filed a
petition for certification election of the 5 supervisory employees. SRBI filed a motion to dismiss
the union's petition on two grounds. First, that the members of union were in fact managerial or
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confidential employees and were to be disqualified from forming or joining unions. Second, the
Association of Labor Unions-TUCP was representing the union. Since ALU-TUCP also sought to
represent the rank-and-file employees of SRBI, there was a violation of the principle of
separation of unions. The union argued that its members were not managerial employees but
merely supervisory employees.
The Med-Arbiter denied petitioner's motion to dismiss. The same was denied on appeal to the
Secretary of Labor and Employment. Thus, the certification election was ordered.
Subsequently, the petition reached DOLE Regional Office seeking the cancellation of the
respondent union's registration. Respondent DOLE Undersecretary denied SRBI's appeal for
lack of merit. He ruled that APSOTEU-TUCP was a legitimate labor organization fully entitled to
all the rights and privileges granted by law including the right to file a petition for certification
election.
ISSUE: Should the petition for certification election be granted?
ART. 256. [245-A] Effect of Inclusion as Members of Employees Outside the Bargaining
Unit.198 The inclusion as union members of employees outside the bargaining unit shall not be
a ground for the cancellation of the registration of the union. Said employees are automatically
deemed removed from the list of membership of said union.
Holy Child Catholic School v. Sto. Tomas, G.R. No. 179146, July 23, 2013.
De La Salle Unviersity Medical Center and College of Medicine v. Laguesma, G.R. No.
102084, August 12, 1998.
d. Local Union Disaffiliation
National Union of Bank Employees (NUBE) v. Philnabank Employees Association (PEMA),
G.R. No. 174287, August 12, 2013.

HELD: Philippine Skylanders, Inc. v. National Labor Relations Commission, G.R. No. 127374,
Yes. The petitioner bank failed to show that their Cashiers, Accountant, and Acting Chief of the January 31, 2002.
Loans Department possessed managerial powers and duties. At best they only had
recommendatory powers subject to evaluation, review, and final decision by the bank's Alliance of Nationalist and Genuine Labor Organization (ANGLO-KMU) v. Samahan ng
management. The job description forms submitted by petitioner clearly show that the union
mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills at J.P. Coats (SAMANA
members in question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. Moreover, the forms also do not indicate that said officers could formulate and BAY), G.R. No. 118562, July 5, 1996.
execute management policies which are normally expected of management officers. Neither
could the union members be treated as confidential employees. Although the cashier serves the
bank's management, it could not be deemed to have access to confidential information
specifically relating to SRBI's labor relations policies.

As regards the issue on the violation of the principle of separation of unions, records show that
respondent union was initially assisted by ALU during its preliminary stages. A local union
maintains its separate personality despite affiliation with a larger national federation. APSOTEU-
TUCP had separate legal personality from ALU and TUCP.

The law frowns on a union where the membership is composed of both supervisors and rank-
and-file employees, for fear that conflicts of interest may arise in the areas of discipline,
collective bargaining, and strikes. However, in the present case, none of the members of the
respondent union came from the rank-and-file employees of the bank.

Filipino Pipe and Foundry Corporation v. National Labor Relations Commission, G.R. No.
115180, November 16, 1999. (supra, but different topic)

Progressive Development Corporation v. The Honorable Secretary, Department of Labor

and Employment, G.R. No. 96425, February 4, 1992 (supra. but different topic na )

c. Supervisory and Rank-and-File Union Affiliation

• Articles 255 and 256, Labor Code.

ART. 255. [245] Ineligibility of Managerial Employees to Join any Labor Organization; Right of
Supervisory Employees.197 Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in the collective
bargaining unit of the rank-and-file employees but may join, assist or form separate collective
bargaining units and/or legitimate labor organizations of their own. The rank and file union and
the supervisors' union operating within the same establishment may join the same federation or
national union.

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