Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages (pp. 7-14, Record.) PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and regulations regarding employess' conduct in carrying out their duties and functions, and alleging that by implementing the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA reffered to the requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated. In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of Chapter II of the Code as defective for, respectively, running counter to the construction of penal laws and making punishable any offense within PAL's contemplation. These provisions are the following: Sec. 2. Non-exclusivity. This Code does not contain the entirety of the rules and regulations of the company. Every employee is bound to comply with all applicable rules, regulations, policies, procedures and standards, including standards of quality, productivity and behaviour, as issued and promulgated by the company through its duly authorized officials. Any violations thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of the offense. Sec. 7. Cumulative Record. An employee's record of offenses shall be cumulative. The penalty for an offense shall be determined on the basis of his past record of offenses of any nature or the absence thereof. The more habitual an offender has been, the greater shall be the penalty for the latest offense. Thus, an employee may be dismissed if the number of his past offenses warrants such penalty in the judgment of management even if each offense considered separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the other hand, due regard shall be given to the length of time between commission of individual offenses to determine whether the employee's conduct may indicate occasional lapses (which may nevertheless require sterner disciplinary action) or a pattern of incorrigibility. Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at the scheduled date. Interpreting such failure as a waiver of

G.R. No. 85985 August 13, 1993 PHILIPPINE AIRLINES, INC. (PAL), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents. Solon Garcia for petitioner. Adolpho M. Guerzon for respondent PALEA.

MELO, J.: In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code of Discipline among employees is a shared responsibility of the employer and the employees. On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was circulated among the employees and was immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied therein. Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL, by its unilateral implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the Code must conform with the requirements of sufficient publication, and that

the parties' right to present evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a decision was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed. However, the arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and regulations governing the conduct of employees is a "legitimate management prerogative" such rules and regulations must meet the test of "reasonableness, propriety and fairness." She found Section 1 of the Code aforequoted as "an all embracing and all encompassing provision that makes punishable any offense one can think of in the company"; while Section 7, likewise quoted above, is "objectionable for it violates the rule against double jeopardy thereby ushering in two or more punishment for the same misdemeanor." (pp. 38-39, Rollo.) The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that PAL's assertion that it had furnished all its employees copies of the Code is unsupported by documentary evidence, she stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees who thought all the while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the law excuses no one from compliance . . . finds application only after it has been conclusively shown that the law was circulated to all the parties concerned and efforts to disseminate information regarding the new law have been exerted. (p. 39, Rollo.) She thereupon disposed: WHEREFORE, premises considered, respondent PAL is hereby ordered as follows: 1. Furnish all employees with the new Code of Discipline; 2. Reconsider the cases of employees meted with penalties under the New Code of Discipline and remand the same for further hearing; and 3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the decision. All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit. SO ORDERED. (p. 40, Rollo.) PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no evidence of unfair labor practice committed by PAL and affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the following observations:

Indeed, failure of management to discuss the provisions of a contemplated code of discipline which shall govern the conduct of its employees would result in the erosion and deterioration of an otherwise harmonious and smooth relationship between them as did happen in the instant case. There is no dispute that adoption of rules of conduct or discipline is a prerogative of management and is imperative and essential if an industry, has to survive in a competitive world. But labor climate has progressed, too. In the Philippine scene, at no time in our contemporary history is the need for a cooperative, supportive and smooth relationship between labor and management more keenly felt if we are to survive economically. Management can no longer exclude labor in the deliberation and adoption of rules and regulations that will affect them. The complainant union in this case has the right to feel isolated in the adoption of the New Code of Discipline. The Code of Discipline involves security of tenure and loss of employment a property right! It is time that management realizes that to attain effectiveness in its conduct rules, there should be candidness and openness by Management and participation by the union, representing its members. In fact, our Constitution has recognized the principle of "shared responsibility" between employers and workers and has likewise recognized the right of workers to participate in "policy and decision-making process affecting their rights . . ." The latter provision was interpreted by the Constitutional Commissioners to mean participation in "management"' (Record of the Constitutional Commission, Vol. II). In a sense, participation by the union in the adoption of the code if conduct could have accelerated and enhanced their feelings of belonging and would have resulted in cooperation rather than resistance to the Code. In fact, labor-management cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.) Respondent Commission thereupon disposed: WHEREFORE, premises considered, we modify the appealed decision in the sense that the New Code of Discipline should be reviewed and discussed with complainant union, particularly the disputed provisions [.] (T)hereafter, respondent is directed to furnish each employee with a copy of the appealed Code of Discipline. The pending cases adverted to in the appealed decision if still in the arbitral level, should be reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor Arbiter are sustained.

SO ORDERED. (p. 5, NLRC Decision.) PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in: (a) directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8,Rollo.) As stated above, the Principal issue submitted for resolution in the instant petition is whether management may be compelled to share with the union or its employees its prerogative of formulating a code of discipline. PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of responsibility therefor between employer and employee. Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in decision and policy-making processes affecting the rights, duties and welfare." However, even in the absence of said clear provision of law, the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of discretion. In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the company's right to implement a new system of distributing its products, but gave the following caveat: So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. (at p. 28.) All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is clearly a managerial one. A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they concern the management aspect of the business of

the company as in the San Miguel case. The provisions of the Code clearly have repercusions on the employee's right to security of tenure. The implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which border on infringement of constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker" (Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635). Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great respect. PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the functions of management without having to discuss the same with PALEA and much less, obtain the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following provision of the agreement: The Association recognizes the right of the Company to determine matters of management it policy and Company operations and to direct its manpower. Management of the Company includes the right to organize, plan, direct and control operations, to hire, assign employees to work, transfer employees from one department, to another, to promote, demote, discipline, suspend or discharge employees for just cause; to lay-off employees for valid and legal causes, to introduce new or improved methods or facilities or to change existing methods or facilities and the right to make and enforce Company rules and regulations to carry out the functions of management. The exercise by management of its prerogative shall be done in a just reasonable, humane and/or lawful manner. Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course, amplified by Republic Act No 6715 when it decreed the "participation of workers in decision and policy making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees' rights. Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be attained if the employees are restive on account, of their being left out in the determination of cardinal and fundamental matters affecting their employment. WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special pronouncement is made as to costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 130693 March 4, 2004

SANDOVAL-GUTIERREZ, J.: At bar is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated May 30, 1997 and Resolution2 dated August 22, 1997 rendered by the Court of Appeals in CA-G.R. SP No. 40919, entitled "Mindanao Steel Corporation vs. Atty. Marieto Gallego and Minsteel Free Workers Organization MINFREWO-NFL, Cagayan de Oro City." The undisputed facts of this case are as follows: On June 29, 1990, Mindanao Steel Corporation (herein petitioner) and Minsteel Free Workers Organization MINFREWO-NFL Cagayan de Oro City (herein respondent) executed a collective bargaining agreement (CBA) providing for an increase of P20.00 in the workers daily wage. Prompted by the December 5, 1990 fuel price increase, the Regional Tripartite Wages and Productivity Board (RTWPB) of Region X, Northern Mindanao, Cagayan de Oro City, issued Interim Wage Order No. RX-023. This Interim Wage Order granted to all workers4 an emergency cost of living allowance (ECOLA)5 for three (3) months or from January 7, 1991 to April 6, 1991. Petitioner refused to implement the Interim Wage Order, prompting respondent to file with the National Mediation and Conciliation Board (NCMB) a complaint for payment of ECOLA against the former. Then the parties, in a Submission Agreement dated April 8, 1991, agreed to submit the case for voluntary arbitration. After the parties had submitted their position papers and other pleadings, the Voluntary Arbitrator rendered a Decision dated January 8, 1992 ordering petitioner to pay respondents members and other workers their ECOLA. Petitioner then filed a motion for reconsideration but was denied in an Order dated January 28, 1992. Thereafter, petitioner filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary restraining order and/or writ of preliminary injunction. On May 30, 1997, the Appellate Court promulgated its Decision affirming the Voluntary Arbitrators Decision dated January 8, 1992 and Order dated January 28, 1992. The Court of Appeals ratiocinated as follows: "In the case at bench, Interim Wage Order No. RX-02 was issued specifically to grant employees atemporary allowance pending the approval of the wage increase being petitioned by them due to the fuel price hike on December 5, 1990.

MINDANAO STEEL CORPORATION, petitioner, vs. MINSTEEL FREE WORKERS ORGANIZATION (MINFREWO-NFL) CAGAYAN DE ORO, respondent. DECISION

"The grant of the P20.00 wage increase under the CBA did not have the purpose of granting such temporary allowance due to the contingency stated in the subject wage order, but was actually intended as wage increase to be effective January 1, 1991. Thus, as stated by the Supreme Court, it should be termed as wage increase, pure and simple, and not part of the emergency allowance. "Not to be overlooked is the provision under the CBA which was executed between the parties herein, Section 3, Article VII of which provides that: It is hereby agreed that these salary increases shall be exclusive of any wage that may be provided by law as a result of economic change. (p. 55, rollo) "There indeed is nothing contrary to law, customs, public order or public policy in a stipulation subordinating, as does the aforesaid provision in the collective bargaining agreement, contractual wage increases to those imposed or prescribed by law. They were therefore perfectly free to agree thereon, and having thus agreed, are bound by such stipulation as constituting the law between them." (Filipinas Golf and Country Club, Inc. vs. NLRC, 176 SCRA 625) "The increase provided by the subject wage order, moreover, was not intended to be purely a wage increase, that may be credited to any wage increase granted by employers because of or in anticipation of the fuel price hike, but for emergency purposes for only three months. "The petitioner should, therefore, not be entitled to the creditable benefit provided by the implementing rules and regulations of interim wage order no. RX-02. "This Court thus finds no grave abuse of discretion amounting to lack of excess of jurisdiction on the part of the respondent voluntary arbitrator in issuing the questioned decision. "WHEREFORE, THE INSTANT PETITION IS HEREBY DISMISSED FOR LACK OF MERIT. "SO ORDERED." On August 22, 1997, the Court of Appeals issued a Resolution denying petitioners motion for reconsideration. Hence, this petition for review on certiorari.

Petitioner contends that it is exempt from paying the ECOLA because pursuant to the CBA, it already granted a wage increase of P20.00 a day or P523.20 a month effective January 1, 1991. Likewise, petitioner claims it is entitled to creditable benefits on the basis of Section 7 of Interim Wage Order No. RX-02 which provides: "(W)age increases, rice allowance (in kind or cash), and other allowances granted by employers to their workers because of, or in anticipation of the fuel price hikes on December 05, 1990 and exclusive of compliance with Wage Order Nos. RX-01 and RX-01-A are creditable, provided that if the amount is less than that prescribed in this Interim Wage Order, the employer shall give the difference." Along the same line, petitioner maintains that under Section 5 of the Implementing Rules and Regulations of Wage Order No. RX-02, its grant of wage increase to its workers pursuant to the CBA is considered compliance with the Order, thus: "Section 5. Creditable Benefits - Any wage increases or adjustments granted between November 22, 1990 and January 06, 1991 shall be considered as compliance with the Order provided that if the amount is less than that prescribed, the employer shall pay the difference. "In addition, any of the following shall be considered as compliance: "a. All forms of wage increases granted unilaterally or under collective bargaining agreement excluding company anniversary increases and those resulting from regularization, promotion and merit increases. "b. All kinds of allowances in cash or in kind for whatever purpose, such as transportation, meal allowance, rice subsidy and others. "c. All forms of economic assistance such as productivity bonus, housing, bus services for the family and other similar activities." Petitioners contentions lack merit. To begin with, any doubt or ambiguity in the contract between management and the union members should be resolved in the light of Article 1702 of the Civil Code which provides: "(I)n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer."6 The basic issue for our resolution is whether or not petitioner is exempt from paying the ECOLA in light of the CBA entered into by the parties.

Pertinent is Section 3, Article VII of the CBA which provides: "It is hereby agreed that these salary increases shall be exclusive of any wage increase that may be provided by law as a result of any economic change." The above provision is clear that the salary increases, such as the P20.00 provided under the CBA, shall not include any wage increase that may be provided by law as a result of any economic change. Hence, aside from the P20.00 CBA wage increase, respondents members are also entitled to the ECOLA under the Interim Wage Order. The CBA provision under Section 3, Article VII needs no interpretation. Contracts which are not ambiguous are to be interpreted according to their literal meaning and not beyond their obvious intendment. 7 In Mactan Workers Union vs. Aboitiz,8 we held that "the terms and conditions of a collective bargaining contract constitute the law between the parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress." Finally, the P20.00 daily wage increase granted by petitioner to its employees under the CBA can not be considered as creditable benefit or compliance with the Interim Wage Order because such was intended as a CBA or negotiated wage increase and not "because of, or in anticipation of the fuel price hikes on December 5, 1990 x x x." Thus, the Court of Appeals did not commit any error when it rendered the assailed Decision and Resolution, the same being consistent with law and jurisprudence. WHEREFORE, the petition is DENIED. The assailed Decision dated May 30, 1997 and Resolution dated August 22, 1997 rendered by the Court of Appeals in CA-G.R. SP No. 40919 are AFFIRMED. Costs against petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner, vs. DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY,respondents. Soriano and Arana Law Offices for petitioner. The Solicitor General for public respondent. Francisco D. Alas for respondent Associated Labor Unions-TUCP.

PARAS, J.: This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion for reconsideration. The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows: WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal therefrom denied. Let, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the certification election. The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows: WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock Agro-Division) is hereby dismissed for lack of merit and the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the records of this case be immediately forwarded to the Office of origin for the holding of the certification elections.

No further motion shall hereafter be entertained. The antecedents of the case are as follows: On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered with the Ministry of Labor and Employment under Registration Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-Division), a duly organized, registered and existing corporation engaged in the business of poultry raising, piggery and planting of agricultural crops such as corn, coffee and various vegetables, employing approximately 205 rank and file employees/workers, the collective bargaining unit sought in the petition, or in case of doubt of the union's majority representation, for the issuance of an order authorizing the immediate holding of a certification election (Rollo, p. 18). Although the case was scheduled for hearing at least three times, no amicable settlement was reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their respective position papers on or before August 11, 1986 (rollo. p. 62). Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that there is no existing collective bargaining agreement between the respondent employer, petitioner herein, and any other existing legitimate labor unions; (2) that there had neither been a certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending union requesting for certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a majority of respondent employer's rank-and-file employees/workers in the proposed bargaining unit or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed membership with the ALU-TUCP and have expressed their written consent and authorization to the filing of the petition; (4) that in response to petitioner union's two letters to the proprietor/ General Manager of respondent employer, dated April 21, 1986 and May 8, 1 986, requesting for direct recognition as the sole and exclusive bargaining agent of the rank-and-file workers, respondent employer has locked out 119 of its rankand-file employees in the said bargaining unit and had dismissed earlier the local union president, vice-president and three other active members of the local unions for which an unfair labor practice case was filed by petitioner union against respondent employer last July 2, 1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263).
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June, 1986 (c) 6 withdrew their membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious insubordination and destruction of property and (f) 100 simply abandoned their work or stopped working; (3) that the 128 incumbent employees or workers of the livestock section were merely transferred from the agricultural section as replacement for those who have either been dismissed, retrenched or resigned; and (4) that the statutory requirement for holding a certification election has not been complied with by the union (Rollo, p. 26). The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986 (Rollo, p. 62). On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court by mail on February 20, 1987 (Rollo, p. 3). In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the petition and issued a temporary restraining order (,Rollo, p. 95). Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April 8, 1987 (Rollo, p. 218). On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their respective memoranda within twenty (20) days from notice (Rollo, p. 225). The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public respondents as its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435). The issues raised in this petition are: I WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT. II

Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its business, very few of its employees are permanent, the overwhelming majority of which are seasonal and casual and regular employees; (2) that of the total 138 rank-and-file employees who authorized, signed and supported the filing of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after

WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE PROPOSED BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH. In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-and-file workers of the livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables (Rollo, p. 26). But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units (Rollo, p. 435).
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Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid down the test of proper grouping, which is community and mutuality of interest. Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107 Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees concerned; the Court stressed the importance of the second factor otherwise known as the substantial-mutual-interest test and found no reason to disturb the finding of the lower Court that the employees in the administrative, sales and dispensary departments perform work which has nothing to do with production and maintenance, unlike those in the raw leaf, cigar, cigarette and packing and engineering and garage departments and therefore community of interest which justifies the format or existence as a separate appropriate collective bargaining unit. Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the factors to be considered are: employment status of the employees to be affected, that is the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties. In any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra) Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference between the work performed by musicians and that of other persons who participate in the production of a film which suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132 [1961]). Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of petitioner corporation perform work entirely different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the

The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides: Art. 256. Exclusive bargaining representative.The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall have the right at any time to present grievances to their employer. According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482). This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit. Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees".

categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file employees of the livestock-agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of the substantial similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights. II It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred five (205) rank-and-file employees and workers. It has no existing duly certified collective bargaining agreement with any legitimate labor organization. There has not been any certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition for direct certification and/or certification election with the Ministry of Labor and Employment, and there is no contending union requesting for certification as the sole and exclusive bargaining representative in the proposed bargaining unit. The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124 employees or workers which are more than a majority of the rank-and-file employees or workers in the proposed bargaining unit had signed membership with respondent ALU-TUCP and had expressed their written consent and authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met. But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently withdrew their membership; five (5) were retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the entrance to petitioner's farm; and one hundred (100) simply abandoned their work. Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July 28, 1986 showing that the employees were on strike, which was confirmed by the finding of the Bureau of Labor Relations to the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the Vice-president, Gilbert Redoblado and three other active members of the union Carmen Saguing, Roberto Romolo and Iluminada Bonio were dismissed and a

complaint for unfair labor practice, illegal dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p. 415). The complaint was amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and 137 others against petitioner corporation and Bello Casanova President and General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).
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Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but to call a certification election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case. It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their written consent to the certification election or more than a majority of the rank and file employees and workers; much more than the required 30% and over and above the present requirement of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More than that, any doubt cast on the authenticity of signatures to the petition for holding a certification election cannot be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met warrant holding of the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required percentage requirement has been reached, the employees' withdrawal from union membership taking place after the filing of the petition for certification election will not affect said petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous number who had signed up for certification elections Vismico Industrial Workers Association (VIWA) v. Noriel 131 SCRA 569 [1984]). Similarly, until a decision, final in character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied
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participation in the certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are no longer entitled to participate in the certification election on the theory that they have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of a certification election is a statutory policy that should not be circumvented. (George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]). Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64 [1983]). There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that petitioner corporation from the outset has actively participated and consistently taken the position of adversary in the petition for direct certification as the sole and exclusive bargaining representative and/or certification election filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to give the employees true representation in their collective bargaining with an employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the employer's objection to the formation of subject union, much less for the filing of the petition for a certification election. PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED permanently. SO ORDERED.