G.R. No.

181531

July 31, 2009

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES- MANILA PAVILION HOTEL CHAPTER, Petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents. DECISION CARPIO MORALES, J.: National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion Hotel Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of Appeals November 8, 2007 Decision1 and of the Secretary of Labor and Employments January 25, 2008 Resolution2 in OS-A-9-52-05 which affirmed the Med-Arbiters Resolutions dated January 22, 20073 and March 22, 2007.4 A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results: EMPLOYEES IN VOTERS LIST = 353 TOTAL VOTES CAST = NUWHRAIN-MPHC = HIMPHLU = NO UNION = SPOILED = SEGREGATED = 346 151 169 1 3 22

In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case back to Med-Arbiter Ma. Simonette Calabocal to decide which among those votes would be opened and tallied. Eleven (11) votes were initially segregated because they were cast by dismissed employees, albeit the legality of their dismissal was still pending before the Court of Appeals. Six other votes were segregated because the employees who cast them were already occupying supervisory positions at the time of the election. Still five other votes were segregated on the ground that they were cast by probationary employees and, pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted.

By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, specially those cast by the 11 dismissed employees and those cast by the six supposedly supervisory employees of the Hotel. Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that the votes of the probationary employees should have been opened considering that probationary employee Gatbontons vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote short of the majority which would then become 169. By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters Order. It held that pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion and inclusion of voters in a certification election, the probationary employees cannot vote, as at the time the Med-Arbiter issued on August 9, 2005 the Order granting the petition for the conduct of the certification election, the six probationary employees were not yet hired, hence, they could not vote. The SOLE further held that, with respect to the votes cast by the 11 dismissed employees, they could be considered since their dismissal was still pending appeal. As to the votes cast by the six alleged supervisory employees, the SOLE held that their votes should be counted since their promotion took effect months after the issuance of the above-said August 9, 2005 Order of the Med-Arbiter, hence, they were still considered as rank-and-file. Respecting Gatbontons vote, the SOLE ruled that the same could be the basis to include the votes of the other probationary employees, as the records show that during the pre-election conferences, there was no disagreement as to his inclusion in the voters list, and neither was it timely challenged when he voted on election day, hence, the Election Officer could not then segregate his vote. The SOLE further ruled that even if the 17 votes of the dismissed and supervisory employees were to be counted and presumed to be in favor of petitioner, still, the same would not suffice to overturn the 169 votes garnered by HIMPHLU. In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper. Petitioners motion for reconsideration having been denied by the SOLE by Resolution of March 22, 2007, it appealed to the Court of Appeals. By the assailed Decision promulgated on November 8, 2007, the appellate court affirmed the ruling of the SOLE. It held that, contrary to petitioners assertion, the ruling in Airtime Specialist, Inc. v. Ferrer Calleja5 stating that in a certification election, all rank-and-file

employees in the appropriate bargaining unit, whether probationary or permanent, are entitled to vote, is inapplicable to the case at bar. For, the appellate court continued, the six probationary employees were not yet employed by the Hotel at the time the August 9, 2005 Order granting the certification election was issued. It thus held that Airtime Specialist applies only to situations wherein the probationary employees were already employed as of the date of filing of the petition for certification election. Respecting Gatbontons vote, the appellate court upheld the SOLEs finding that since it was not properly challenged, its inclusion could no longer be questioned, nor could it be made the basis to include the votes of the six probationary employees. The appellate court brushed aside petitioners contention that the opening of the 17 segregated votes would materially affect the results of the election as there would be the likelihood of a runoff election in the event none of the contending unions receive a majority of the valid votes cast. It held that the "majority" contemplated in deciding which of the unions in a certification election is the winner refers to the majority of valid votes cast, not the simple majority of votes cast, hence, the SOLE was correct in ruling that even if the 17 votes were in favor of petitioner, it would still be insufficient to overturn the results of the certification election. Petitioners motion for reconsideration having been denied by Resolution of January 25, 2008, the present recourse was filed. Petitioners contentions may be summarized as follows: 1. Inclusion of Jose Gatbontons vote but excluding the vote of the six other probationary employees violated the principle of equal protection and is not in accord with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja; 2. The time of reckoning for purposes of determining when the probationary employees can be allowed to vote is not August 9, 2005 the date of issuance by Med-Arbiter Calabocal of the Order granting the conduct of certification elections, but March 10, 2006 the date the SOLE Order affirmed the Med-Arbiters Order. 3. Even if the votes of the six probationary employees were included, still, HIMPHLU could not be considered as having obtained a majority of the valid votes cast as the opening of the 17 ballots would increase the number of valid votes from 321 to 338, hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have garnered at least 170, not 169, votes. Petitioner justifies its not challenging Gatbontons vote because it was precisely its position that probationary employees should be allowed to vote. It thus avers that justice and equity dictate that since Gatbontons vote was counted, then the votes of the 6 other probationary employees should likewise be included in the tally. Petitioner goes on to posit that the word "order" in Section 5, Rule 9 of Department Order No. 40-03 reading "[A]ll employees who are members of the appropriate bargaining unit sought to be

represented by the petitioner at the time of the issuance of the order granting the conduct of certification election shall be allowed to vote" refers to an order which has already become final and executory, in this case the March 10, 2002 Order of the SOLE. Petitioner thus concludes that if March 10, 2006 is the reckoning date for the determination of the eligibility of workers, then all the segregated votes cast by the probationary employees should be opened and counted, they having already been working at the Hotel on such date. Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that the same was not proper for if the 17 votes would be counted as valid, then the total number of votes cast would have been 338, not 321, hence, the majority would be 170; as such, the votes garnered by HIMPHLU is one vote short of the majority for it to be certified as the exclusive bargaining agent. The relevant issues for resolution then are first, whether employees on probationary status at the time of the certification elections should be allowed to vote, and second, whether HIMPHLU was able to obtain the required majority for it to be certified as the exclusive bargaining agent. On the first issue, the Court rules in the affirmative. The inclusion of Gatbontons vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the six other probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds: In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for purposes of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit." (Emphasis supplied) Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the Omnibus Rules Implementing the Labor Code, provides: Rule II Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial and agricultural enterprises, including employees of government owned or controlled corporations without original charters established under the Corporation Code, as

well as employees of religious, charitable, medical or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join or assist labor unions for purposes of collective bargaining: provided, however, that supervisory employees shall not be eligible for membership in a labor union of the rank-and-file employees but may form, join or assist separate labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor unions for purposes of collective bargaining. Alien employees with valid working permits issued by the Department may exercise the right to self-organization and join or assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs. For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization. All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection and other legitimate purposes except collective bargaining. (Emphasis supplied) The provision in the CBA disqualifying probationary employees from voting cannot override the Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor Code and its Implementing Rules on certification elections and jurisprudence thereon. A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order or public policy.6 Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their position that probationary employees hired after the issuance of the Order granting the petition for the conduct of certification election must be excluded, should not be read in isolation and must be harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz: Rule XI xxxx Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of a certification election shall be eligible to vote. An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification election. (Emphasis supplied) xxxx

Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last hearing, the Med-Arbiter shall issue a formal order granting the petition or a decision denying the same. In organized establishments, however, no order or decision shall be issued by the MedArbiter during the freedom period. The order granting the conduct of a certification election shall state the following: (a) the name of the employer or establishment; (b) the description of the bargaining unit; (c) a statement that none of the grounds for dismissal enumerated in the succeeding paragraph exists; (d) the names of contending labor unions which shall appear as follows: petitioner union/s in the order in which their petitions were filed, forced intervenor, and no union; and (e) a directive upon the employer and the contending union(s) to submit within ten (10) days from receipt of the order, the certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the bargaining unit for the last three (3) months prior to the issuance of the order. (Emphasis supplied) xxxx Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from receipt of the entire records of the petition within which to decide the appeal. The filing of the memorandum of appeal from the order or decision of the Med-Arbiter stays the holding of any certification election. The decision of the Secretary shall become final and executory after ten (10) days from receipt thereof by the parties. No motion for reconsideration of the decision shall be entertained. (Emphasis supplied) In light of the immediately-quoted provisions, and prescinding from the principle that all employees are, from the first day of their employment, eligible for membership in a labor organization, it is evident that the period of reckoning in determining who shall be included in the list of eligible voters is, in cases where a timely appeal has been filed from the Order of the Med-Arbiter, the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory. The filing of an appeal to the SOLE from the Med-Arbiters Order stays its execution, in accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible voters pending the resolution of the appeal.

During the pendency of the appeal, the employer may hire additional employees. To exclude the employees hired after the issuance of the Med-Arbiters Order but before the appeal has been resolved would violate the guarantee that every employee has the right to be part of a labor organization from the first day of their service. In the present case, records show that the probationary employees, including Gatbonton, were included in the list of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration have been denied by the SOLE, rendering the Med-Arbiters August 22, 2005 Order final and executory 10 days after the March 22, 2007 Resolution (denying the motion for reconsideration of the January 22 Order denying the appeal), and rightly so. Because, for purposes of self-organization, those employees are, in light of the discussion above, deemed eligible to vote. A certification election is the process of determining the sole and exclusive bargaining agent of the employees in an appropriate bargaining unit for purposes of collective bargaining. Collective bargaining, refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit.7 The significance of an employees right to vote in a certification election cannot thus be overemphasized. For he has considerable interest in the determination of who shall represent him in negotiating the terms and conditions of his employment. Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the Med-Arbiter, experience shows that it sometimes takes months to be resolved. To rule then that only those employees hired as of the date of the issuance of the Med-Arbiters Order are qualified to vote would effectively disenfranchise employees hired during the pendency of the appeal. More importantly, reckoning the date of the issuance of the Med-Arbiters Order as the cut-off date would render inutile the remedy of appeal to the SOLE.1avvph!1 But while the Court rules that the votes of all the probationary employees should be included, under the particular circumstances of this case and the period of time which it took for the appeal to be decided, the votes of the six supervisory employees must be excluded because at the time the certification elections was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the election. As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is well-settled that under the so-called "double majority rule," for there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast. Prescinding from the Courts ruling that all the probationary employees votes should be deemed valid votes while that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as

the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170. HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority vote. The position of both the SOLE and the appellate court that the opening of the 17 segregated ballots will not materially affect the outcome of the certification election as for, so they contend, even if such member were all in favor of petitioner, still, HIMPHLU would win, is thus untenable. It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as basis for computing the required majority, and not just to determine which union won the elections. The opening of the segregated but valid votes has thus become material. To be sure, the conduct of a certification election has a two-fold objective: to determine the appropriate bargaining unit and to ascertain the majority representation of the bargaining representative, if the employees desire to be represented at all by anyone. It is not simply the determination of who between two or more contending unions won, but whether it effectively ascertains the will of the members of the bargaining unit as to whether they want to be represented and which union they want to represent them. Having declared that no choice in the certification election conducted obtained the required majority, it follows that a run-off election must be held to determine which between HIMPHLU and petitioner should represent the rank-and-file employees. A run-off election refers to an election between the labor unions receiving the two (2) highest number of votes in a certification or consent election with three (3) or more choices, where such a certified or consent election results in none of the three (3) or more choices receiving the majority of the valid votes cast; provided that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.8 With 346 votes cast, 337 of which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having obtained 151 and the choice "NO UNION" receiving 1 vote, then the holding of a run-off election between HIMPHLU and petitioner is in order. WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE. The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU). SO ORDERED. CONCHITA CARPIO MORALES Associate Justice

--------------------------

G.R. No. 171153

September 12, 2007

SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEUPTGWO), petitioner, vs. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP), respondent1. DECISION CHICO-NAZARIO, J.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19 February 2001 of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b) the Resolution4 dated 16 January 2006 of the Court of Appeals in the same case, denying petitioner's Motion for Reconsideration of the aforementioned Decision. The following are the antecedent 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 Metal Closure and Lithography Plant in Laguna. 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 Charter Certificate No. 112 to respondent on 15 June 1999.5 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 1999.7 Thereafter, 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.8 All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit.9

On 17 August 1999, 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 noncompliance 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. The petition was docketed as Case No. NCR-OD-9908-007-IRD.12 On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim 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.13 Respondent appealed to the BLR. In a Decision dated 19 February 2001, it declared: 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 noncompliance with the 20% membership requirement does not have any basis in the rules. Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate No. FED-11558-LC issued by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and privileges to act as representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in accordance with the provisions of Department Order No. 9. WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14, 2000, canceling the registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations.14 While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration and affirmed its Decision dated 19 February 2001.15 Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a

Decision dated 9 March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows: In Department Order No. 9, 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. xxxx In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is DISMISSED.16 Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for Reconsideration of the aforementioned Decision. Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole issue of: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT 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. The present petition questions the legal personality of respondent as a legitimate labor organization. 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.17 Petitioner also insists that the 20% requirement for registration of respondent must be based not on the number of employees of a single division, but in all three divisions of the company in all the offices and plants of SMC since they are all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective Bargaining Agreement (CBA),18 quoted hereunder: ARTICLE 1 SCOPE Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular rank and file employees paid on the basis of fixed salary per month and employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP) and San Miguel Packaging Products (SMPP) and in different operations existing in the City of Manila and suburbs, including Metal Closure and Lithography Plant located at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided however, that if during the term of this Agreement, a plant within the territory covered by this Agreement is transferred outside but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the employees in the transferred plant shall remain in the bargaining unit covered by this Agreement. (Emphasis supplied.) Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since it based its membership on the number of employees of a single division only, namely, the SMPP. There is merit in petitioner's contentions. 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."20 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,21 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.22 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 representative23 of all the employees in an appropriate

collective bargaining unit for purposes of collective bargaining.24 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.25 A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP. The procedure for registration of a local or chapter of a labor organization is provided in Book V of the Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26 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.29 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

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated Article 234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or local. This Court disagrees. Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon its registration with the BLR: 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. (Italics supplied.) It is emphasized that the foregoing pertains to the registration of an independent labor organization, association or group of unions or workers. However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case of Progressive Development Corporation v. Secretary, Department of Labor and Employment,31 declared that when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, 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, as provided under Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter.32 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.33

Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor Code and Department Order No. 9. As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on several occasions, pronounced that 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.35 This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.36 Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local or chapter as it is not a legitimate labor organization, it being a trade union center. Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly, this line of reasoning attempts to predicate that a trade union center is not a legitimate labor organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that a trade union center cannot directly create a local or chapter through the process of chartering. Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate labor organization37 as "any labor organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, 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.39 The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack.40 It may be questioned only in an independent petition for cancellation in accordance with Section 5

of Rule V, Book V of the Implementing Rules. The aforementioned provision is enunciated in the following: Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. PDMP was registered as a trade union center and issued Registration Certificate No. FED11558-LC by the BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.41 It bears to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP. Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization,42 and continues to be recognized as such until its certificate of registration is successfully impugned and thereafter cancelled or revoked in an independent action for cancellation. We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union center. This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot directly create a local or chapter. After an exhaustive study of the governing labor law provisions, both statutory and regulatory,43 we find no legal justification to support the conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein.44 Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social justice,45 the provisions of the Labor Code and the Implementing Rules have been subject to several amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade union center was never mentioned under Presidential Decree No. 442, even as it was amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules, under Department Order No. 9.

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; (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.51 Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to SelfOrganization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This law further amends the Labor Code provisions on Labor Relations. Pertinent amendments read as follows: SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further amended to read as follows: ART. 234. Requirements of Registration. 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. SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows:

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. This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded.55 Where the terms are expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters.56 Such is the case here. If its 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. Anything that is not included in the enumeration is excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein.57 The rule is restrictive in the sense that it proceeds from the premise that the legislating body would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.58 Expressium facit cessare tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally.

Therefore, 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. The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and voluntary organization of a strong and united labor movement,60 and thus assure the rights of workers to self-organization.61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements for registration is not without reason. It has been observed that the formation of a local or chapter becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected.63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment, it is not this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as requisites for local or chapter formation.64 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. WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel Packaging Products Employees UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations. Costs against petitioner. SO ORDERED. Ynares-Santiago, Chairperson, Austria_Martinez, Nachura, Reyes, JJ., concur.
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G.R. No. 177024

October 30, 2009

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL CORPORATION) Petitioner,

vs. PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA (PIGLAS-HERITAGE), Respondent. DECISION ABAD, J.: This case is about a companys objections to the registration of its rank and file union for noncompliance with the requirements of its registration. The Facts and the Case Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration1 to this union. Subsequently, the HHE union filed a petition for certification election2 that petitioner company opposed. The company alleged that the HHE union misrepresented itself to be an independent union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN). The company claimed that the HHE union intentionally omitted disclosure of its affiliation with NUWHRAIN because the companys supervisors union was already affiliated with it.3 Thus, the company also filed a petition for the cancellation of the HHE unions registration certificate.4 Meanwhile, the Med-Arbiter granted the HHE unions petition for certification election.5 Petitioner company appealed the decision to the Secretary of Labor but the latter denied the appeal.6 The Secretary also denied petitioners motion for reconsideration, prompting the company to file a petition for certiorari7 with the Court of Appeals. On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE unions certification election, effective until the petition for cancellation of that unions registration shall have been resolved with finality.8 The decision of the Court of Appeals became final when the HHE union withdrew the petition for review that it filed with this Court.9 On December 10, 2003 certain rank and file employees of petitioner company held a meeting and formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR10 and got its registration certificate on February 9, 2004. Two months later, the members of the first union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for cancellation of its union registration.11 On September 4, 2004 respondent PIGLAS union filed a petition for certification election12 that petitioner company also opposed, alleging that the new unions officers and members were also those who comprised the old union. According to the company, the employees involved formed

the PIGLAS union to circumvent the Court of Appeals injunction against the holding of the certification election sought by the former union. Despite the companys opposition, however, the Med-Arbiter granted the petition for certification election.13 On December 6, 2004 petitioner company filed a petition to cancel the union registration of respondent PIGLAS union.14 The company claimed that the documents submitted with the unions application for registration bore the following false information: (a) The List of Members showed that the PIGLAS union had 100 union members;15 (b) The Organizational Minutes said that 90 employees attended the meeting on December 10, 2003;16 (c) The Attendance Sheet of the meeting of December 10, 2003 bore the signature of 127 members who ratified the unions Constitution and By-Laws;17 and (d) The Signature Sheet bore 128 signatures of those who attended that meeting.18 Petitioner company 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 in the number of signatories to the attendance and signature sheets. The minutes reported that only 90 employees attended the meeting. The company further alleged that 33 members of respondent PIGLAS union were members of the defunct HHE union. This, according to the company, violated the policy against dual unionism and showed that the new union was merely an alter ego of the old. On February 22, 2005 the DOLE-NCR denied the companys petition to cancel respondent PIGLAS unions registration for the reason that the discrepancies in the number of members stated in the applications supporting documents were not material and did not constitute misrepresentation. As for the charge of dual unionism, the same is not a ground for canceling registration. It merely exposed a union member to a possible charge of disloyalty, an internal matter. Here, the members of the former union simply exercised their right to self-organization and to the freedom of association when they subsequently joined the PIGLAS union.19 On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It reasoned that respondent PIGLAS unions organization meeting lasted for 12 hours. It was possible for the number of attendees to have increased from 90 to 128 as the meeting progressed. Besides, with a total of 250 employees in the bargaining unit, the union needed only 50 members to comply with the 20 percent membership requirement. Thus, the union could not be accused of misrepresentation since it did not pad its membership to secure registration. As for the issue of dual unionism, it has become moot and academic, said the BLR, because of the dissolution of the old union and the cancellation of its certificate of registration.20 Petitioner company filed a petition for certiorari with the Court of Appeals,21 assailing the order of the BLR. But the latter court dismissed the petition, not being accompanied by material documents and portions of the record.22 The company filed a motion for reconsideration,

attaching parts of the record that were deemed indispensable but the court denied it for lack of merit.23 Hence, the company filed this petition for review under Rule 45. Issues Presented The petition presents the following issues: 1. Whether or not the Court of Appeals erred in dismissing the petition for certiorari before it for failure of petitioner company to attach certain material portions of the record; 2. Whether or not the union made fatal misrepresentation in its application for union registration; and 3. Whether or not "dual unionism" is a ground for canceling a unions registration. The Rulings of the Court First. While the Court of Appeals correctly dismissed the companys petition initially for failure to attach material portions of the record, the court should have bended back a little when petitioner company subsequently attached those missing materials to its motion for reconsideration. As a general rule, petitions for certiorari that lack copies of essential pleadings and portions of the record may be dismissed but this rule has not been regarded as absolute. The omission may be cured.24 The Court of Appeals has three courses of action when the annexes to the petition are insufficient. It may dismiss the petition,25 require the submission of the relevant documents, or order the filing of an amended petition with the required pleadings or documents. A petition lacking in essential pleadings or portions of the record may still be given due course, or reinstated if earlier dismissed, upon subsequent submission of the necessary documents or to serve the higher interest of justice.26 Second. Since a remand of the case to the Court of Appeals for a determination of the substantive issues will only result in more delays and since these issues have been amply argued by the opposing sides in the various pleadings and documents they submitted to this Court, the case may now be resolved on the merits. Did respondent PIGLAS union commit fraud and misrepresentation in its application for union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident discrepancies as to the number of union members involved as these appeared on the documents that supported the unions application for registration, petitioner company has no other evidence of the alleged misrepresentation. But those discrepancies alone cannot be taken as an indication that respondent misrepresented the information contained in these documents. The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. It is serious because once such charge

is proved, the labor union acquires none of the rights accorded to registered organizations. Consequently, charges of this nature should be clearly established by evidence and the surrounding circumstances.27 Here, the discrepancies in the number of union members or employees stated in the various supporting documents that respondent PIGLAS union submitted to labor authorities can be explained. While it appears in the minutes of the December 10, 2003 organizational meeting that 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 11:00 a.m. to 11:00 p.m. There is no evidence that the meeting hall was locked up to exclude late attendees.1 a vv p h i 1 There is also nothing essentially mysterious or irregular about the fact that only 127 members ratified the unions constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed that all those who attended approved of the constitution and by-laws. Any member had the right to hold out and refrain from ratifying those documents or to simply ignore the process. At any rate, the Labor Code28 and its implementing rules29 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. Petitioner company claims that respondent PIGLAS union was required to submit the names of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the list it submitted named only 100 members notwithstanding that the signature and attendance sheets reflected a membership of 127 or 128 employees. This omission, said the company, amounted to material misrepresentation that warranted the cancellation of the unions registration. But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents shows that, except for six members, the names found in the subject list are also in the attendance and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to represent consisted of 250 employees. Only 20 percent of this number or 50 employees were required to unionize. Here, the union more than complied with such requirement. Labor laws are liberally construed in favor of labor especially if doing so would affirm its constitutionally guaranteed right to self-organization.30 Here, the PIGLAS unions supporting documents reveal the unmistakable yearning of petitioner companys rank and file employees to organize. This yearning should not be frustrated by inconsequential technicalities. Third. The fact that some of respondent PIGLAS unions members were also members of the old rank and file union, the HHE union, is not a ground for canceling the new unions registration. The right of any person to join an organization also includes the right to leave that organization and join another one. Besides, HHE union is dead. It had ceased to exist and its certificate of registration had already been cancelled. Thus, petitioners arguments on this point may also be now regarded as moot and academic.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau of Labor Relations in BLR-A-26-3-05 dated May 26, 2006. SO ORDERED. ROBERTO A. ABAD Associate Justice
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G.R. No. 178989

March 18, 2010

EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner, vs. COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION (EREU), Respondents. DECISION VELASCO, JR., J.: In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country Club (Eagle Ridge) assails and seeks to nullify the Resolutions of the Court of Appeals (CA) dated April 27, 20071 and June 6, 2007,2 issued in CA-G.R. SP No. 98624, denying a similar recourse petitioner earlier interposed to set aside the December 21, 2006 Decision3 of the Bureau of Labor Relations (BLR), as reiterated in a Resolution4 of March 7, 2007. Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, at the end of CY 2005, around 112 rank-and-file employees. The instant case is an off-shot of the desire of a number of these employees to organize themselves as a legitimate labor union and their employers opposition to their aspiration. The Facts On December 6, 2005, at least 20% of Eagle Ridges rank-and-file employeesthe percentage threshold required under Article 234(c) of the Labor Code for union registrationhad a meeting where they organized themselves into an independent labor union, named "Eagle Ridge Employees Union" (EREU or Union),5 elected a set of officers,6 and ratified7 their constitution and by-laws.8 On December 19, 2005, EREU formally applied for registration9 and filed BLR Reg. Form No. I-LO, s. 199810 before the Department of Labor and Employment (DOLE) Regional Office IV (RO IV). In time, DOLE RO IV granted the application and issued EREU Registration Certificate (Reg. Cert.) No. RO400-200512-UR-003.

The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club, docketed as Case No. RO400-0601-RU-002. Eagle Ridge opposed this petition,11 followed by its filing of a petition for the cancellation12 of Reg. Cert. No. RO400-200512-UR-003. Docketed as RO400-0602-AU-003, Eagle Ridges petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers. Going into specifics, Eagle Ridge alleged that the EREU declared in its application for registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26 members. The misrepresentation was exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25 members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26 members affixed their signatures on the documents, making one signature a forgery. Finally, Eagle Ridge contended that five employees who attended the organizational meeting had manifested the desire to withdraw from the union. The five executed individual affidavits or Sinumpaang Salaysay13 on February 15, 2006, attesting that they arrived late at said meeting which they claimed to be drinking spree; that they did not know that the documents they signed on that occasion pertained to the organization of a union; and that they now wanted to be excluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively reduced the union membership to 20 or 21, either of which is below the mandatory minimum 20% membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rankand-file employees of Eagle Ridge, the required number would be 22 or 23 employees. As a counterpoint, EREU, in its Comment,14 argued in gist: 1) the petition for cancellation was procedurally deficient as it does not contain a certification against forum shopping and that the same was verified by one not duly authorized by Eagle Ridges board; 2) the alleged discrepancies are not real for before filing of its application on December 19, 2005, four additional employees joined the union on December 8, 2005, thus raising the union membership to 30 members as of December 19, 2005; 3) the understatement by one member who ratified the constitution and by-laws was a typographical error, which does not make it either grave or malicious warranting the cancellation of the unions registration; 4) the retraction of 5 union members should not be given any credence for the reasons that: (a) the sworn statements of the five retracting union members sans other affirmative evidence presented hardly qualify as clear and credible evidence considering the joint affidavits of the other members attesting to the orderly conduct of the organizational meeting; (b) the retracting members did not deny signing the union documents; (c) following, Belyca Corporation v. Ferrer-Calleja15 and Oriental Tin Can Labor Union v. Secretary of Labor and Employment,16 it can be presumed that "duress, coercion or valuable consideration" was brought to bear on the retracting members; and (d) citing La

Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations,17 Belyca Corporation and Oriental Tin Can Labor Union, where the Court ruled that "once the required percentage requirement has been reached, the employees withdrawal from union membership taking place after the filing of the petition for certification election will not affect the petition," it asserted the applicability of said ruling as the petition for certification election was filed on January 10, 2006 or long before February 15, 2006 when the affidavits of retraction were executed by the five union members, thus contending that the retractions do not affect nor be deemed compelling enough to cancel its certificate of registration. The Union presented the duly accomplished union membership forms18 dated December 8, 2005 of four additional members. And to rebut the allegations in the affidavits of retraction of the five union members, it presented the Sama-Samang Sinumpaang Salaysay19 dated March 20, 2006 of eight union members; another Sama-Samang Sinumpaang Salaysay,20 also bearing date March 20, 2006, of four other union members; and the Sworn Statement21 dated March 16, 2006 of the Unions legal counsel, Atty. Domingo T. Aonuevo. These affidavits attested to the orderly and proper proceedings of the organizational meeting on December 6, 2005. In its Reply,22 Eagle Ridge reiterated the grounds it raised in its petition for cancellation and asserted further that the four additional members were fraudulently admitted into the Union. As Eagle Ridge claimed, the applications of the four neither complied with the requirements under Section 2, Art. IV of the unions constitution and by-laws nor were they shown to have been duly received, issued receipts for admission fees, processed with recommendation for approval, and approved by the union president. Moreover, Eagle Ridge presented another Sinumpaang Salaysay23 of retraction dated March 15, 2006 of another union member. The membership of EREU had thus been further reduced to only 19 or 20. This same member was listed in the first Sama-Samang Sinumpaang Salaysay24 presented by the Union but did not sign it. The Ruling of the DOLE Regional Director After due proceedings, the DOLE Regional Director, Region IV-A, focusing on the question of misrepresentation, issued on April 28, 2006 an Order25 finding for Eagle Ridge, its petition to cancel Reg. Cert. No. RO400-200512-UR-003 being granted and EREU being delisted from the roster of legitimate labor organizations. Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR A-C-30-5-31-06 (Case No. RO400-0602-AU-003). The Ruling of the BLR Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed26 the appealed order of the DOLE Regional Director.

Undeterred by successive set backs, EREU interposed a motion for reconsideration, contending that: 1) Contrary to the ruling of the BLR OIC Director, a certificate of non-forum shopping is mandatory requirement, under Department Order No. (DO) 40-03 and the Rules of Court, non-compliance with which is a ground to dismiss a petition for cancellation of a certificate of registration; 2) It was erroneous for both the Regional Director and the BLR OIC Director to give credence to the retraction statements of union members which were not presented for reaffirmation during any of the hearings of the case, contrary to the requirement for the admission of such evidence under Sec. 11, Rule XI of DO 40-03. In a Decision dated December 21, 2006, the BLR, now headed by Director Rebecca C. Chato, set aside the July 28, 2006 order of the BLR OIC Director, disposing as follows: WHEREFORE, the motion for reconsideration is hereby GRANTED and our Resolution dated 28 July 2006 is hereby VACATED. Accordingly, the Eagle Ridge Employees Union (EREU) shall remain in the roster of legitimate organizations. In finding for the Union, the BLR Director eschewed procedural technicalities. Nonetheless, she found as without basis allegations of misrepresentation or fraud as ground for cancellation of EREUs registration. In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLRs Resolution dated March 7, 2007. Eagle Ridge thereupon went to the CA on a petition for certiorari. The Ruling of the CA On April 27, 2007, the appellate court, in a terse two-page Resolution,27 dismissed Eagle Ridges petition for being deficient, as: 1. the questioned [BLR] Decision dated December 21, 2006 and the Resolution dated March 7, 2007 Resolution [appended to the petition] are mere machine copies; and 2. the verification and certification of non-forum shopping was subscribed to by Luna C. Piezas on her representation as the legal counsel of the petitioner, but sans [the requisite] Secretarys Certificate or Board Resolution authorizing her to execute and sign the same. The CA later denied, in its second assailed resolution, Eagle Ridges motion for reconsideration, albeit the latter had submitted a certificate to show that its legal counsel has been authorized, per a board resolution, to represent the corporation. The Issues

Eagle Ridge is now before us via this petition for certiorari on the submissions that: I. [THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISMISSING THE COMPANYS PETITION FOR CERTIORARI AND DENYING ITS MOTION FOR RECONSIDERATION CONSIDERING THAT THE COMPANYS PREVIOUS COUNSEL WAS AUTHORIZED TO REPRESENT THE COMPANY IN THE PETITION FOR CERTIORARI FILED BEFORE THE [CA]; II. IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS RESPECTFULLY SUBMITTED THAT THIS HONORABLE COURT COULD TAKE COGNIZANCE OF THE MERITS OF THIS CASE AND RESOLVE THAT BASED ON THE EVIDENCE ON RECORD, THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF REGISTRATION OF EREU.28 The Courts Ruling We dismiss the petition. Procedural Issue: Lack of Authority Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right.29 Accordingly, the party who seeks to avail of it must strictly observe the rules laid down by law.30 Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn certification of nonforum shopping as provided in the third paragraph of Section 3, Rule 46."31 Sec. 3, paragraphs 4 and 6 of Rule 46 pertinently provides: SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. x x x x xxxx xxxx The petitioner shall also submit together with the petition a sworn certification that he has not theretofore commenced any action involving the same issues in the Supreme Court, the Court of Appeals x x x, or any other tribunal or agency; if there is such other action or proceeding, he must state the status of the same x x x. xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. (Emphasis supplied.) Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the requisite certification against non-forum shopping. Such certification is a peculiar personal representation on the part of the principal party, an assurance to the court that there are no other pending cases involving basically the same parties, issues, and cause of action.32 In the instant case, the sworn verification and certification of non-forum shopping in the petition for certiorari of Eagle Ridge filed before the CA carried the signature of its counsel without the requisite authority. Eagle Ridge tried to address its faux pas by submitting its board secretarys Certificate33 dated May 15, 2007, attesting to the issuance on May 10, 2007 of Board Resolution No. ERGCCI 07/III-01 that authorized its counsel of record, Atty. Luna C. Piezas, to represent it before the appellate court. The CA, however, rejected Eagle Ridges virtual plea for the relaxation of the rules on the signing of the verification and certification against forum shopping, observing that the board resolution adverted to was approved after Atty. Piezas has signed and filed for Eagle Ridge the petition for certiorari. The appellate courts assailed action is in no way tainted with grave abuse of discretion, as Eagle Ridge would have this Court believed. Indeed, a certification of non-forum shopping signed by counsel without the proper authorization is defective and constitutes a valid cause for dismissal of the petition.34 The submission of the board secretarys certificate through a motion for reconsideration of the CAs decision dismissing the petition for certiorari may be considered a substantial compliance with the Rules of Court.35 Yet, this rule presupposes that the authorizing board resolution, the approval of which is certified to by the secretarys certification, was passed within the reglementary period for filing the petition. This particular situation does not, however, obtain under the premises. The records yield the following material dates and incidents: Eagle Ridge received the May 7, 2007 resolution of the BLR Director on March 9, 2007, thus giving it 60 days or up to May 8, 2007 to file a petition for certiorari, as it in fact filed its petition on April 18, 2007 before the CA. The authorization for its counsel, however, was only issued in a meeting of its board on May 10, 2007 or a couple of days beyond the 60-day reglementary period referred to in filing a certiorari action. Thus, there was no substantial compliance with the Rules. As with most rules of procedure, however, exceptions are invariably recognized and the relaxation of procedural rules on review has been effected to obviate jeopardizing substantial justice.36 This liberality stresses the importance of review in our judicial grievance structure to accord every party litigant the amplest opportunity for the proper and just disposition of his cause, freed from the constraints of technicalities.37 But concomitant to a liberal interpretation of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules.381avvphi1

To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle Ridge urges, that its counsels authority to represent the corporation was never questioned before the DOLE regional office and agency. But EREUs misstep could hardly lend Eagle Ridge comfort. And obviously, Eagle Ridge and its counsel erred in equating the latters representation as legal counsel with the authority to sign the verification and the certificate of non-forum shopping in the formers behalf. We note that the authority to represent a client before a court or quasi-judicial agency does not require an authorizing board resolution, as the counsel-client relationship is presumed by the counsels representation by the filing of a pleading on behalf of the client. In filing a pleading, the counsel affixes his signature on it, but it is the client who must sign the verification and the certification against forum shopping, save when a board resolution authorizes the former to sign so. It is entirely a different matter for the counsel to sign the verification and the certificate of nonforum shopping. The attestation or certification in either verification or certification of nonforum shopping requires the act of the principal party. As earlier indicated, Sec. 3 of Rule 46 exacts this requirement; so does the first paragraph of Sec. 5 of Rule 7 pertinently reading: SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. (Emphasis added.) It is, thus, clear that the counsel is not the proper person to sign the certification against forum shopping. If, for any reason, the principal party cannot sign the petition, the one signing on his behalf must have been duly authorized.39 In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed after the filing of the petition was filed, should be treated as a ratificatory medium of the counsels act of signing the sworn certification of non-forum shopping. We are not inclined to grant the desired liberality owing to Eagle Ridges failure to sufficiently explain its failure to follow the clear rules. If for the foregoing considerations alone, the Court could very well dismiss the instant petition. Nevertheless, the Court will explore the merits of the instant case to obviate the inequity that might result from the outright denial of the petition. Substantive Issue: No Fraud in the Application Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its petition for cancellation of the EREUs registration. On the other hand, the Union asserts bona

fide compliance with the registration requirements under Art. 234 of the Code, explaining the seeming discrepancies between the number of employees who participated in the organizational meeting and the total number of union members at the time it filed its registration, as well as the typographical error in its certification which understated by one the number of union members who ratified the unions constitution and by-laws. Before their amendment by Republic Act No. 948140 on June 15, 2007, the then governing Art. 234 (on the requirements of registration of a labor union) and Art. 239 (on the grounds for cancellation of union registration) of the Labor Code respectively provided as follows: ART. 234. REQUIREMENTS OF REGISTRATION. Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of workers who participated in such meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; xxxx (e) Four copies (4) of the constitution and by-laws of the applicant union, minutes of its adoption or ratification and the list of the members who participated in it.41 xxxx ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statements or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; xxxx (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election.42 (Emphasis supplied.)

A scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to merit cancellation of its registration. First. The Union submitted the required documents attesting to the facts of the organizational meeting on December 6, 2005, the election of its officers, and the adoption of the Unions constitution and by-laws. It submitted before the DOLE Regional Office with its Application for Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following documents, to wit: (a) the minutes of its organizational meeting43 held on December 6, 2005 showing 26 founding members who elected its union officers by secret ballot; (b) the list of rank-and-file employees44 of Eagle Ridge who attended the organizational meeting and the election of officers with their individual signatures; (c) the list of rank-and-file employees45 who ratified the unions constitution and by-laws showing the very same list as those who attended the organizational meeting and the election of officers with their individual signatures except the addition of four employees without their signatures, i.e., Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel Dolendo; (d) the unions constitution and by-laws46 as approved on December 6, 2005; (e) the list of officers47 and their addresses; (f) the list of union members48 showing a total of 30 members; and (g) the Sworn Statement49 of the unions elected president and secretary. All the foregoing documents except the sworn statement of the president and the secretary were accompanied by Certifications50 by the union secretary duly attested to by the union president. Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for registration. The Union thereby complied with the mandatory minimum 20% membership requirement under Art. 234(c). Of note is the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of the Union president and secretary and confirmed by Eagle Ridge in its petition for cancellation. Third. The Union has sufficiently explained the discrepancy between the number of those who attended the organizational meeting showing 26 employees and the list of union members showing 30. The difference is due to the additional four members admitted two days after the organizational meeting as attested to by their duly accomplished Union Membership forms. Consequently, the total number of union members, as of December 8, 2005, was 30, which was truthfully indicated in its application for registration on December 19, 2005.

As aptly found by the BLR Director, the Union already had 30 members when it applied for registration, for the admission of new members is neither prohibited by law nor was it concealed in its application for registration. Eagle Ridges contention is flawed when it equated the requirements under Art. 234(b) and (c) of the Labor Code. Par. (b) clearly required the submission of the minutes of the organizational meetings and the list of workers who participated in the meetings, while par. (c) merely required the list of names of all the union members comprising at least 20% of the bargaining unit. The fact that EREU had 30 members when it applied for registration on December 19, 2005 while only 26 actually participated in the organizational meeting is borne by the records. Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional four members allegedly for not complying with what it termed as "the sine qua non requirements" for union member applications under the Unions constitution and bylaws, specifically Sec. 2 of Art. IV. We are not persuaded. Any seeming infirmity in the application and admission of union membership, most especially in cases of independent labor unions, must be viewed in favor of valid membership. The right of employees to self-organization and membership in a union must not be trammeled by undue difficulties. In this case, when the Union said that the four employee-applicants had been admitted as union members, it is enough to establish the fact of admission of the four that they had duly signified such desire by accomplishing the membership form. The fact, as pointed out by Eagle Ridge, that the Union, owing to its scant membership, had not yet fully organized its different committees evidently shows the direct and valid acceptance of the four employee applicants rather than deter their admissionas erroneously asserted by Eagle Ridge. Fifth. The difference between the number of 26 members, who ratified the Unions constitution and by-laws, and the 25 members shown in the certification of the Union secretary as having ratified it, is, as shown by the factual antecedents, a typographical error. It was an insignificant mistake committed without malice or prevarication. The list of those who attended the organizational meeting shows 26 members, as evidenced by the signatures beside their handwritten names. Thus, the certifications understatement by one member, while not factual, was clearly an error, but neither a misleading one nor a misrepresentation of what had actually happened. Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we hold that the probative value of these affidavits cannot overcome those of the supporting affidavits of 12 union members and their counsel as to the proceedings and the conduct of the organizational meeting on December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously erred in giving credence to the affidavits of retraction, but not according the same treatment to the supporting affidavits. The six affiants of the affidavits of retraction were not presented in a hearing before the Hearing Officer (DOLE Regional Director), as required under the Rules Implementing Book V of the Labor Code covering Labor Relations. Said Rules is embodied in Department Order No. (DO) 40-03 which was issued on February 17, 2003 and took

effect on March 15, 2003 to replace DO 9 of 1997. Sec. 11, Rule XI of DO 40-03 specifically requires: Section 11. Affirmation of testimonial evidence. Any affidavit submitted by a party to prove his/her claims or defenses shall be re-affirmed by the presentation of the affiant before the Med-Arbiter or Hearing Officer, as the case may be. Any affidavit submitted without the re-affirmation of the affiant during a scheduled hearing shall not be admitted in evidence, except when the party against whom the affidavit is being offered admits all allegations therein and waives the examination of the affiant. It is settled that affidavits partake the nature of hearsay evidence, since they are not generally prepared by the affiant but by another who uses his own language in writing the affiants statement, which may thus be either omitted or misunderstood by the one writing them.51 The above rule affirms the general requirement in adversarial proceedings for the examination of the affiant by the party against whom the affidavit is offered. In the instant case, it is required for affiants to re-affirm the contents of their affidavits during the hearing of the instant case for them to be examined by the opposing party, i.e., the Union. For their non-presentation and consonant to the above-quoted rule, the six affidavits of retraction are inadmissible as evidence against the Union in the instant case. Moreover, the affidavit and joint-affidavits presented by the Union before the DOLE Regional Director were duly re-affirmed in the hearing of March 20, 2006 by the affiants. Thus, a reversible error was committed by the DOLE Regional Director and the BLR OIC Director in giving credence to the inadmissible affidavits of retraction presented by Eagle Ridge while not giving credence to the duly re-affirmed affidavits presented by the Union. Evidently, the allegations in the six affidavits of retraction have no probative value and at the very least cannot outweigh the rebutting attestations of the duly re-affirmed affidavits presented by the Union. Seventh. The fact that six union members, indeed, expressed the desire to withdraw their membership through their affidavits of retraction will not cause the cancellation of registration on the ground of violation of Art. 234(c) of the Labor Code requiring the mandatory minimum 20% membership of rank-and-file employees in the employees union. The six retracting union members clearly severed and withdrew their union membership. The query is whether such separation from the Union can detrimentally affect the registration of the Union. We answer in the negative. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its

application for registration on December 19, 2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement. Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the application of registration or even way back to the organizational meeting. Prior to their withdrawal, the six employees in question were bona fide union members. More so, they never disputed affixing their signatures beside their handwritten names during the organizational meetings. While they alleged that they did not know what they were signing, it bears stressing that their affidavits of retraction were not re-affirmed during the hearings of the instant case rendering them of little, if any, evidentiary value. With the withdrawal of six union members, there is still compliance with the mandatory membership requirement under Art. 234(c), for the remaining 24 union members constitute more than the 20% membership requirement of 22 employees. Eagle Ridge further argues that the list of union members includes a supervisory employee. This is a factual issue which had not been raised at the first instance before the DOLE Regional Director and cannot be appreciated in this proceeding. To be sure, Eagle Ridge knows well who among its personnel belongs or does not belong to the supervisory group. Obviously, its attempt to raise the issue referred to is no more than an afterthought and ought to be rejected. Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that Eagle Ridge has apparently resorted to filing the instant case for cancellation of the Unions certificate of registration to bar the holding of a certification election. This can be gleaned from the fact that the grounds it raised in its opposition to the petition for certification election are basically the same grounds it resorted to in the instant case for cancellation of EREUs certificate of registration. This amounts to a clear circumvention of the law and cannot be countenanced. For clarity, we reiterate the following undisputed antecedent facts: (1) On December 6, 2005, the Union was organized, with 26 employees of Eagle Ridge attending; (2) On December 19, 2005, the Union filed its formal application for registration indicating a total of 30 union members with the inclusion of four additional members on December 8, 2005 (Reg. Cert. No. RO400-200512-UR-003 was eventually issued by the DOLE RO IV-A); (3) On January 10, 2006, the Union filed before the DOLE RO IV-A its petition for certification election in Eagle Ridge;

(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing the petition for certification election on essentially the same grounds it raised in the instant case; and (5) On February 24, 2006, Eagle Ridge filed the instant case for cancellation of the Unions certificate of registration on essentially the same grounds it raised in its opposition to the Unions petition for certification election. Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will affect neither the Unions registration nor its petition for certification election, as their affidavits of retraction were executed after the Unions petition for certification election had been filed. The initial five affidavits of retraction were executed on February 15, 2006; the sixth, on March 15, 2006. Indisputably, all six were executed way after the filing of the petition for certification election on January 10, 2006. In Eastland Manufacturing Company, Inc. v. Noriel,52 the Court emphasized, and reiterated its earlier rulings,53 that "even if there were less than 30% [the required percentage of minimum membership then] of the employees asking for a certification election, that of itself would not be a bar to respondent Director ordering such an election provided, of course, there is no grave abuse of discretion."54 Citing Philippine Association of Free Labor Unions v. Bureau of Labor Relations,55 the Court emphasized that a certification election is the most appropriate procedure for the desired goal of ascertaining which of the competing organizations should represent the employees for the purpose of collective bargaining.56 Indeed, where the company seeks the cancellation of a unions registration during the pendency of a petition for certification election, the same grounds invoked to cancel should not be used to bar the certification election. A certification election is the most expeditious and fairest mode of ascertaining the will of a collective bargaining unit as to its choice of its exclusive representative.57 It is the fairest and most effective way of determining which labor organization can truly represent the working force. It is a fundamental postulate that the will of the majority, if given expression in an honest election with freedom on the part of the voters to make their choice, is controlling.58 The Court ends this disposition by reproducing the following apt excepts from its holding in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union (SSVLU) on the effect of the withdrawal from union membership right before or after the filing of a petition for certification election: We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated written statements submitted by Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of registration, partake of the nature of withdrawal of union membership executed after the Unions filing of a petition for certification election on March 21, 2000. We have in precedent cases said that the employees withdrawal from a labor union made before the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of such petition is considered to be involuntary and does not affect the same. Now then, if a withdrawal from union membership done after a petition for

certification election has been filed does not vitiate such petition, is it not but logical to assume that such withdrawal cannot work to nullify the registration of the union? Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded that the affidavits of retraction of the 82 members had no evidentiary weight.59 (Emphasis supplied.) WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit. Costs against petitioner. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice
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G.R. No. 169717

March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCCSUPER), ZACARRIAS JERRY VICTORIO-Union President, Petitioner, vs. CHARTER CHEMICAL and COATING CORPORATION, Respondent. DECISION DEL CASTILLO, J.: The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. We apply these principles to this case. This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals March 15, 2005 Decision1 in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision2 of the Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution3 denying petitioner unions motion for reconsideration. Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region. On April 14, 1999, respondent company filed an Answer with Motion to Dismiss4 on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union.5 Med-Arbiters Ruling On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was, thus, fatally defective. The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company. As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining. Department of Labor and Employments Ruling On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing petitioner unions appeal on the ground that the latters petition for certification election was filed out of time. Although the DOLE ruled, contrary to the findings of the MedArbiter, that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent companys claim that some members of petitioner union were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it took judicial notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said petition became final and executory on September 16, 1998 and was remanded for immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in an unorganized establishment should be filed prior to the finality of the decision calling for a certification election. Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner unions petition for certification election, viz: WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July 1999 is MODIFIED to allow the certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation with the following choices: 1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment and Reform (SMCC-SUPER); and 2. No Union. Let the records of this case be remanded to the Regional Office of origin for the immediate conduct of a certification election, subject to the usual pre-election conference. SO DECIDED.9 Court of Appeals Ruling On March 15, 2005, the CA promulgated the assailed Decision, viz: WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET ASIDE. SO ORDERED.10 In nullifying the decision of the DOLE, the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. It, likewise, upheld the Med-Arbiters finding that petitioner union consisted of both rank-and-file and supervisory employees. Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union.11 Thus, considering that petitioner union is not a legitimate labor organization, it has no legal right to file a petition for certification election. Issues I

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in granting the respondent [companys] petition for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of the respondent company[s] petition was already settled with finality and barred from being re-litigated. II Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [unions] membership is [a] ground for the cancellation of petitioner [unions] legal personality and dismissal of [the] petition for certification election. III Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath the local charter certificate issued by its mother federation and list of the union membership attending the organizational meeting [is a ground] for the cancellation of petitioner [unions] legal personality as a labor organization and for the dismissal of the petition for certification election.12 Petitioner Unions Arguments Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for certification election is barred by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled that petitioner union complied with all the documentation requirements and that there was no independent evidence presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union. After the promulgation of this Decision, respondent company did not move for reconsideration, thus, this issue must be deemed settled. Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the dismissal of a petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a unions registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by the local unions secretary or treasurer and attested to by the local unions president are limited to the unions constitution and by-laws, statement of the set of officers, and the books of accounts. Finally, the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor Code and the doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands Empoyees Union-PTGWO.13 Respondent Companys Arguments

Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the DOLE. The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and, from this decision, respondent company timely filed its motion for reconsideration. On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter certificate be certified under oath. It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union14 continues to be good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition for certification election as was done here. Our Ruling The petition is meritorious. The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE. A review of the records indicates that the issue as to petitioner unions legal personality has been timely and consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that petitioner union complied with the documentation requirements of the Labor Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-and-file employees in its membership. Nonetheless, the petition for certification election was dismissed on the ground that another union had previously filed a petition for certification election seeking to represent the same bargaining unit in respondent company. Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE reversed its previous ruling. It upheld the right of petitioner union to file the subject petition for certification election because its previous decision was based on a mistaken appreciation of facts.15 From this adverse decision, respondent company timely moved for reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal personality to file the subject petition for certification election. The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the parties timely moved for reconsideration. The issue then as to the legal personality of petitioner union to file the certification election was properly raised before the DOLE, the appellate court and now this Court.

The charter certificate need not be certified under oath by the local unions secretary or treasurer and attested to by its president. Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 948116 which took effect on June 14, 2007.17 This law introduced substantial amendments to the Labor Code. However, since the operative facts in this case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No. 6715,18 amending Book V of the Labor Code, and the rules and regulations19 implementing R.A. No. 6715, as amended by D.O. No. 9,20 series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.21 In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration under Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus, petitioner union cannot be accorded the status of a legitimate labor organization. We disagree. The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, provides: 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/chapters officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapters constitution and by-laws provided that where the local/chapters constitution and by-laws [are] the same as [those] of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President. As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel

Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),22 which was decided under the auspices of D.O. No. 9, Series of 1997, we ruled In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapters officers x x x certify or attest to a document which they had no hand in the preparation of.23 (Emphasis supplied) In accordance with this ruling, petitioner unions charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,24 (2) the names of its officers, their addresses, and its principal office,25 and (3) its constitution and by-laws26 the last two requirements having been executed under oath by the proper union officials as borne out by the records. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However, petitioner union sought to represent the bargaining unit consisting of rankand-file employees. Under Article 24527 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union28 (hereinafter Toyota). Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job descriptions29 of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the definition of supervisory employees under Article 212(m)30 of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees. Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. The appellate courts reliance on Toyota is misplaced in view of this Courts subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima). In Kawashima, we explained at length how and why

the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case, viz: R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the comingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization. It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions): "Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied) and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz: "Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath. Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition. The petition, when filed by a legitimate labor organization, shall contain, among others: xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rankand-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied) By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held: "Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of

an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. xxxx In the case at bar, as respondent union's membership list contains the names of at least twentyseven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election." (Emphasis supplied) In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members. It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases. But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit, thus: Rule XI Certification Elections xxxx Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall contain, among others, the following: x x x (c) The description of the bargaining unit. In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997 Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to wit: "Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: a) a charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) the names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) the local/ chapter's

constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President." which does not require that, for its creation and registration, a local or chapter submit a list of its members. Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees UnionPGTWO in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File UnionFFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for cancellation of union registration filed by the employer in 1999 against a rank-andfile labor organization on the ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code. All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules.32 [Underline supplied] The applicable law and rules in the instant case are the same as those in Kawashima because the present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees; it had the right to file the subject petition for certification election.

The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings. Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. As we explained in Kawashima: Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer's only right in the proceeding is to be notified or informed thereof. The amendments to the Labor Code and its implementing rules have buttressed that policy even more.33 WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of Labor and Employment in OS-A6-53-99 (NCR-OD-M-9902-019) is REINSTATED. No pronouncement as to costs. SO ORDERED. MARIANO C. DEL CASTILLO Associate Justice
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G.R. No. 163532

March 10, 2010

YOKOHAMA TIRE PHILIPPINES, INC., Petitioner, vs. YOKOHAMA EMPLOYEES UNION, Respondent. RESOLUTION CARPIO, J.:

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 16 January 2004 Decision2 and 12 May 2004 Resolution3 of the Court of Appeals in CA-G.R. SP No. 65460. The Court of Appeals affirmed the 12 March4 and 3 May5 2001 Resolutions of the Bureau of Labor Relations (BLR) in BLR-A-C-7-2-05-01, reversing the 18 December 2000 Decision6 of the Department of Labor and Employment (DOLE) Regional Office No. 3, San Fernando, Pampanga (Regional Office), in Case No. RO300-0001-CP-002. Yokohama Employees Union (YEU) is the labor organization of the rank-and-file employees of Yokohama Tire Philippines, Inc. (YTPI). YEU was registered as a legitimate labor labor union on 10 September 1999. YEU filed before the Regional Office a petition for certification election. YTPI filed before the Regional Office a petition7 dated 24 January 2000 for the revocation of YEUs registration. YTPI alleged that YEU violated Article 239(a)8 of the Labor Code: (1) YEU fraudulently included the signature of a certain Ronald O. Pineda (Pineda) in the organizational documents; (2) Pineda was not aware of any election of union officers; (3) YEU fraudulently obtained the employees signatures by making them believe that they were signing a petition for a 125% increase in the minimum wage, not a petition for registration; (4) the employees did not belong to a single bargaining unit; and (5) YEU fraudulently stated in its organizational meeting minutes that its second vice president was Bernard David, not Bernardo David. In its 18 December 2000 Decision, the Regional Office granted the 24 January 2000 petition. The Regional Office held that YEU committed misrepresentation: (1) YEU failed to remove Pinedas signature from the organizational documents despite instructions to do so; and (2) YEU declared that it conducted an election of union officers when, in truth, it did not. YEU appealed the 18 December 2000 Decision to the BLR. In its 12 March 2001 Resolution, the BLR reversed the 18 December 2000 Decision. The BLR found that (1) Pineda did not approach any officer of YEU to have his signature removed from the organizational documents; (2) Pinedas affidavit that no election of officers took place was unreliable and inconsistent with his earlier written statement; (3) the affidavit of a certain Rachelle Gonzales (Gonzales) that no election of officers took place was unreliable and inconsistent with her earlier resignation letter; (4) the affidavit of a certain Arthur Calma (Calma) did not state that no election of officers took place; (5) at least 82 other members of YEU did not question the legality of YEUs organization; and (6) 50 YEU members executed a Sama-Samang Pahayag9 stating that: 3. Noong ika-25 ng Hulyo 1999, kami ay dumalo sa isang pulong para sa pag-oorganisa ng aming Unyon at pagraratipika ng Saligang Batas at Alituntunin nito. x x x xxxx 5. Walang katotohanan ang alegasyon ng Yokohama na walang naganap na pagpupulong kaugnay ng pag-oorganisa o pagtatayo namin ng Unyon. Nakakatuwa ring isipin ang alegasyon ng kompanya na hindi namin lubos na naiintindihan ang aming kapasyahang magtayo at sumapi sa aming Unyon.

6. Malinaw na ginagawa ng kompanya ang lahat ng paraan upang hadlangan ang aming karapatan sa pag-oorganisa at kilalanin bilang kinatawan ng lahat ng mga regular na manggagawa para sa sama-samang pakikipagtawaran. 7. Sa kabila ng lahat ng ito, kami ay lubos pa ring naninindigan sa aming Unyon at patuloy na ipaglalaban ang aming karapatan sa pag-oorganisa at sa sama-samang pakikipagtawaran;10 The BLR also held that (1) YTPI was estopped from questioning the fact that the Sama-Samang Pahayag was an unsworn document since it filed the 24 January 2000 petition for the revocation of YEUs registration based on unsworn documents; (2) the fact that there was no express mention of an election of union officers in the Sama-Samang Pahayag did not necessarily mean that no election occurred; (3) there was an organizational meeting and an organizational meeting may include an election of union officers; (4) any infirmity in the election of union officers may be remedied under the last paragraph11 of Article 241 of the Labor Code and under Rule XIV of DOLE Department Order No. 9; and (5) cancellation of union registration must be done with great caution. YTPI filed before the BLR a motion12 for reconsideration. In its 3 May 2001 Resolution, the BLR denied the motion for lack of merit. YTPI filed before the Court of Appeals a petition13 for certiorari under Rule 65 of the Rules of Court. In its 16 January 2004 Decision, the Court of Appeals denied the petition and held that the BLR did not commit grave abuse of discretion: (1) Pinedas affidavit that no election of officers took place was unreliable and inconsistent with his earlier written statement; (2) Gonzales affidavit that no election of officers took place was unreliable and inconsistent with her earlier resignation letter; (3) Calmas affidavit was unreliable because he admitted that he stayed at the organizational meeting for only 20 minutes; (4) the affidavit of a certain Bernardino David (David) that no election of officers took place was unreliable and inconsistent with his earlier sinumpaang salaysay; (5) Davids affidavit was only filed before the BLR when YTPI filed its motion for reconsideration of the BLRs 12 March 2001 Resolution; (6) Pineda did not approach any officer of YEU to have his signature removed from the organizational documents; (7) the Sama-Samang Pahayag was entitled to credit even if it was an unsworn document; (8) the allegation that the signatures of a certain Denry Villanueva (Villanueva) and a certain Apolinar Bognot (Bognot) in the Sama-Samang Pahayag were forged was only raised for the first time before the BLR when YTPI filed its motion for reconsideration of the BLRs 12 March 2001 Resolution; (9) Villanueva and Bognot were not signatories to YEUs organizational documents; (10) cancellation of union registration must be done with great caution; (11) YTPI, in filing the petition for revocation of YEUs registration, had the burden of proving that YEU committed fraud and misrepresentation; and (12) YTPI failed to prove that YEU committed fraud and misrepresentation.1avvphi1 YTPI filed before the Court of Appeals a motion14 for reconsideration. In its 12 May 2004 Resolution, the Court of Appeals denied the motion for lack of merit.

Hence, the present petition. YTPI raises as issues that (1) the Court of Appeals erred in finding that YEU did not commit fraud or misrepresentation, and (2) the Court of Appeals erred in holding that YTPI had the burden of proving that YEU committed fraud and misrepresentation. The petition is unmeritorious. The Court of Appeals found that YEU did not commit fraud or misrepresentation: Anent whether an election of officers was conducted or not, the petitioner relied largely on the affidavit of Pineda to substantiate its claim that no election of officers was held by the union. However, respondent BLR Director accorded greater credence to Pinedas handwritten statement, wherein he made references to at least 2 meetings he had attended during which he had signed the organizational documents, than to Pinedas later affidavit, whereby he denied any knowledge of the holding of an election. A perusal of the affirmative handwritten statement easily explains why the public respondent preferred it to the negating affidavit, to wit: Noong unang araw na pumirma ako galing ako sa graveyard. Pagkatapos yung pangalawang meeting graveyard din ako, pinapirma ako doon sa siyam (9) na pirasong papel noong umagang pag-uwi namin. x x x July 25, 99 - Unang Pirmahan July 26, 99 - Pinirmahan ko ang siyam na piraso July 27, 99 - Pinatatanggal ko ang aking pangalan sa listahan The petitioner also relied on the affidavit of Ma. Rachelle Gonzales attesting that there was no election of officers, but respondent BLR Director dismissed the affidavit as nothing but the petitioners belated attempt to establish its claim about the election being held considering that Gonzales did not even intimate such matter in her handwritten resignation letter to YEU. Another affidavit, that of Arthur Calma, stated that no election was held, but, again, respondent BLR Director gave Calmas affidavit scant consideration because the affiant admittedly remained in the YEU office for only 20 minutes. In contrast, the public respondent accorded more weight to the sama-samang pahayag executed by 50 YEU members who averred about the holding of an organizational meeting. The public respondent justifiably favored the latter, deeming the meeting to include the holding of an election of officers, for, after all, Art. 234, (b), Labor Code, does not itself distinguish between the two. Respondent BLR Director is further assailed for not taking into consideration the affidavit asserting that no election of officers was ever conducted, which Bernardino David, YEUs second vice president, executed. The omission is not serious enough, however, because the affidavit was submitted only when the petitioner moved for the reconsideration of the questioned decision, and because the affidavit was even inconsistent with Davids earlier sinumpaang salaysay, whereby he attested to his attendance at the organizational meeting and to his election thereat as vice president.

As to the inclusion of Pinedas signature in the organizational documents, the BLR Director correctly ruled that evidence to prove the participation of YEU in the failure to delete Pinedas signature from the organizational documents was wanting. It is not deniable that Pineda never approached any officer of YEU; and that Pineda approached a certain Tonton whom he knew to be a union organizer but who was not an officer of the union nor an employee of the company. If the petitioner was [sic] sincere and intent on this imputed error, its effort to show so does not [sic] appear in the record. What appears is its abject failure to establish Tontons actual identity. The petitioner seemed content in making the insinuation in the petition for certiorari that Tonton was widely recognized as the organizer behind the creation of YEU. That was not enough. In sum, the BLR Director was neither capricious nor whimsical in his exercise of judgment, and, therefore, did not commit grave abuse of discretion. For certiorari to lie, more than mere abuse of discretion is required to be established by the petitioner. Herein, no degree of abuse of discretion was attendant.15 YTPI claims that the Court of Appeals erred in finding that YEU did not commit fraud or misrepresentation. YTPI stated that: There was evidence that respondent committed fraud and misrepresentation in its failure to omit the name of Ronald Pineda prior to the filing of the respondents organizational documents with the Department of Labor and Employment. On the other hand, the Regional Director held that there was no election of officers that had taken place during respondents alleged organizational meeting as there was no proof of such election.16 (Emphasis in the original) The Court is not convinced. A petition for review on certiorari under Rule 45 of the Rules of Court should include only questions of law questions of fact are not reviewable. A question of law exists when the doubt centers on what the law is on a certain set of facts, while a question of fact exists when the doubt centers on the truth or falsity of the alleged facts. There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. Once the issue invites a review of the evidence, the question is one of fact.17 Whether YEU committed fraud and misrepresentation in failing to remove Pinedas signature from the list of employees who supported YEUs application for registration and whether YEU conducted an election of its officers are questions of fact. They are not reviewable. Factual findings of the Court of Appeals are binding on the Court. Absent grave abuse of discretion, the Court will not disturb the Court of Appeals factual findings.18 In Encarnacion v. Court of Appeals,19 the Court held that, "unless there is a clearly grave or whimsical abuse on its part, findings of fact of the appellate court will not be disturbed. The Supreme Court will only exercise its power of review in known exceptions such as gross misappreciation of evidence or a total void of evidence." YTPI failed to show that the Court of Appeals gravely abused its discretion.

The Court of Appeals held that YTPI had the burden of proving that YEU committed fraud and misrepresentation: The cancellation of union registration at the employers instance, while permitted, must be approached with caution and strict scrutiny in order that the right to belong to a legitimate labor organization and to enjoy the privileges appurtenant to such membership will not be denied to the employees. As the applicant for cancellation, the petitioner naturally had the burden to present proof sufficient to warrant the cancellation. The petitioner was thus expected to satisfactorily establish that YEU committed misrepresentations, false statements or fraud in connection with the election of its officers, or with the minutes of the election of officers, or in the list of votes, as expressly required in Art. 239, (c), Labor Code. But, as the respondent BLR Director has found and determined, and We fully agree with him, the petitioner simply failed to discharge its burden.20 YTPI claims that the Court of Appeals erred in holding that YTPI had the burden of proving that YEU committed fraud and misrepresentation. YTPI stated that: 5.5 In the Decision dated 16 January 2004, the Honorable Court of Appeals upheld the BLR Directors ruling that the petitioner had the burden of proving that subject election of officers never took place. 5.6 However, the petitioner does not have the burden of proof vis--vis whether or not the said elections took place. The respondent has the burden of proof in showing that an election of officers took place.21 (Emphasis in the original) The Court is not convinced. YTPI, being the one which filed the petition for the revocation of YEUs registration, had the burden of proving that YEU committed fraud and misrepresentation. YTPI had the burden of proving the truthfulness of its accusations that YEU fraudulently failed to remove Pinedas signature from the organizational documents and that YEU fraudulently misrepresented that it conducted an election of officers. In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila,22 the employer filed a petition to revoke the registration of its rank-and-file employees union, accusing it of committing fraud and misrepresentation. The Court held that the petition was rightfully denied because the employer failed to prove that the labor union committed fraud and misrepresentation. The Court held that: Did respondent PIGLAS union commit fraud and misrepresentation in its application for union registration? We agree with the DOLE-NCR and the BLR that it did not. Except for the evident discrepancies as to the number of union members involved as these appeared on the documents that supported the unions application for registration, petitioner company has no other evidence of the alleged misrepresentation. But those discrepancies alone cannot be taken as an indication that respondent misrepresented the information contained in these documents. The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. It is serious because once such

charge is proved, the labor union acquires none of the rights accorded to registered organizations. Consequently, charges of this nature should be clearly established by evidence and the surrounding circumstances.23 (Emphasis supplied) WHEREFORE, we DENY the petition. We AFFIRM the 16 January 2004 Decision and 12 May 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 65460. SO ORDERED. ANTONIO T. CARPIO Associate Justice
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G.R. No. 164561 August 30, 2006 CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR., VIRGILIO AGERO, and LEONARDO VISORRO, JR., Petitioners, vs. HON. COURT OF APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE TAMONDONG III, Respondents.

DECISION CHICO-NAZARIO, J.: This is a special civil action for Certiorari under Rule 65 of the Rules of Court seeking to annul and set aside, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, (1) the Decision 1 of the Court of Appeals in CA-G.R. SP No. 57179 dated 28 October 2003 which annulled the Decision 2 of the National Labor Relations Commission (NLRC) in NLRC Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision 3 of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998; and (2) the Resolution 4 of the same court, dated 3 June 2004, which denied the petitioners Motion for Reconsideration. Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a domestic corporation engaged in the business of manufacturing steel products; Benjamin Chua, Jr. (now deceased), the former CAPASCO President; Virgilio Agerro, CAPASCOs Vice-President; and Leonardo Visorro, Jr., CAPASCOs Administrative-Personnel Manager. Herein private respondents are Enrique Tamondong III, the Personnel Superintendent of CAPASCO who was previously assigned at the petitioners Cainta Plant, and CAPASCO Union of Supervisory Employees (CUSE), a duly registered union of CAPASCO.

The facts of the case are as follows: Four former employees of CAPASCO originally filed this labor case before the NLRC, namely: Fidel Lacambra, Armando Dayson, Reynaldo Vacalares, and Enrique Tamondong III. However, in the course of the proceedings, Fidel Lacambra 5 and Armando Dayson 6 executed a Release and Quitclaim, thus, waiving and abandoning any and all claims that they may have against petitioner CAPASCO. On 3 November 1999, Reynaldo Vacalares also signed a Quitclaim/Release/Waiver. 7 Hence, this Petition shall focus solely on issues affecting private respondent Tamondong. Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the Personnel Manager for its Cainta Plant on 16 February 1990. Thereafter, he was promoted to the position of Personnel/Administrative Officer, and later to that of Personnel Superintendent. Sometime in June 1996, the supervisory personnel of CAPASCO launched a move to organize a union among their ranks, later known as private respondent CUSE. Private respondent Tamondong actively involved himself in the formation of the union and was even elected as one of its officers after its creation. Consequently, petitioner CAPASCO sent a memo 8 dated 3 February 1997, to private respondent Tamondong requiring him to explain and to discontinue from his union activities, with a warning that a continuance thereof shall adversely affect his employment in the company. Private respondent Tamondong ignored said warning and made a reply letter 9 on 5 February 1997, invoking his right as a supervisory employee to join and organize a labor union. In view of that, on 6 February 1997, petitioner CAPASCO through a memo 10 terminated the employment of private respondent Tamondong on the ground of loss of trust and confidence, citing his union activities as acts constituting serious disloyalty to the company. Private respondent Tamondong challenged his dismissal for being illegal and as an act involving unfair labor practice by filing a Complaint for Illegal Dismissal and Unfair Labor Practice before the NLRC, Regional Arbitration Branch IV. According to him, there was no just cause for his dismissal and it was anchored solely on his involvement and active participation in the organization of the union of supervisory personnel in CAPASCO. Though private respondent Tamondong admitted his active role in the formation of a union composed of supervisory personnel in the company, he claimed that such was not a valid ground to terminate his employment because it was a legitimate exercise of his constitutionally guaranteed right to selforganization. In contrast, petitioner CAPASCO contended that by virtue of private respondent Tamondongs position as Personnel Superintendent and the functions actually performed by him in the company, he was considered as a managerial employee, thus, under the law he was prohibited from joining a union as well as from being elected as one of its officers. Accordingly, petitioners maintained their argument that the dismissal of private respondent Tamondong was perfectly valid based on loss of trust and confidence because of the latters active participation in the affairs of the union. On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision in favor of private respondent Tamondong, decreeing as follows:

WHEREFORE, premises considered, judgment is hereby rendered finding [petitioner CAPASCO] guilty of unfair labor practice and illegal dismissal. Concomitantly, [petitioner CAPASCO] is hereby ordered: 1. To cease and desist from further committing acts of unfair labor practice, as charged; 2. To reinstate [private respondent Tamondong] to his former position without loss of seniority rights and other privileges and his full backwages inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement, and herein partially computed as follows: a) P167,076.00 - backwages from February 7, 1997 to August 7, 1998; b) P18,564.00 - 13th month pay for 1997 and 1998; c) P4,284.00 - Holiday pay for 12 days; d) P3,570.00 - Service Incentive Leave for 1997 and 1998. P 193,494.00 - Total partial backwages and benefits. 11 Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On 25 August 1999, the NLRC rendered its Decision modifying the Decision of the Acting Executive Labor Arbiter Pedro C. Ramos, thus: WHEREFORE, premises all considered, the decision appealed from is hereby MODIFIED: a) Dismissing the Complaint for Illegal Dismissal filed by [private respondent Tamondong] for utter lack of merit; b) Dismissing the Complaint for Unfair Labor Practice for lack of factual basis; c) Deleting the awards to [private respondent Tamondong] of backwages, moral and exemplary damages, and attorneys fees; d) Affirming the awards to [private respondent Tamondong], representing 13th month pay for 1997 and 1998, holiday pay for 12 days, and service incentive leave for 1997 totaling P26,418.00; and e) Ordering the payment of backwages to [private respondent Tamondong] reckoned from 16 September 1998 up to the date of this Decision. 12 Petitioners filed a Motion for Clarification and Partial Reconsideration, while, private respondent Tamondong filed a Motion for Reconsideration of the said NLRC Decision, but the NLRC affirmed its original Decision in its Resolution 13 dated 25 November 1999.

Dissatisfied with the above-mentioned Decision of the NLRC, private respondents Tamondong and CUSE filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, alleging grave abuse of discretion on the part of the NLRC. Then, the Court of Appeals in its Decision dated 28 October 2003, granted the said Petition. The dispositive of which states that: WHEREFORE, premises considered, the instant Petition for Certiorari is GRANTED and the herein assailed Decision dated August 25, 1999 of the NLRC, Third Division is ANNULLED and SET ASIDE. Accordingly, the Decision dated August 7, 1998 of NLRC, RAB IV Acting Executive Labor Arbiter Pedro C. Ramos, insofar as [private respondent Tamondong] is concerned is hereby REINSTATED. 14 Consequently, petitioners filed a Motion for Reconsideration of the aforesaid Decision of the Court of Appeals. Nonetheless, the Court of Appeals denied the said Motion for Reconsideration for want of convincing and compelling reason to warrant a reversal of its judgment. Hence, this present Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure. In the Memorandum 15 filed by petitioners, they aver that private respondent Tamondong as Personnel Superintendent of CAPASCO was performing functions of a managerial employee because he was the one laying down major management policies on personnel relations such as: issuing memos on company rules and regulations, imposing disciplinary sanctions such as warnings and suspensions, and executing the same with full power and discretion. They claim that no further approval or review is necessary for private respondent Tamondong to execute these functions, and the notations "NOTED BY" of petitioner Agerro, the Vice-President of petitioner CAPASCO, on the aforesaid memos are nothing but mere notice that petitioner Agerro was aware of such company actions performed by private respondent Tamondong. Additionally, private respondent Tamondong was not only a managerial employee but also a confidential employee having knowledge of confidential information involving company policies on personnel relations. Hence, the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it held that private respondent Tamondong was not a managerial employee but a mere supervisory employee, therefore, making him eligible to participate in the union activities of private respondent CUSE. Petitioners further argue that they are not guilty of illegal dismissal and unfair labor practice because private respondent Tamondong was validly dismissed and the reason for preventing him to join a labor union was the nature of his position and functions as Personnel Superintendent, which position was incompatible and in conflict with his union activities. Consequently, it was grave abuse of discretion on the part of the Court of Appeals to rule that petitioner CAPASCO was guilty of illegal dismissal and unfair labor practice. Lastly, petitioners maintain that the Court of Appeals gravely abused its discretion when it reinstated the Decision of Executive Labor Arbiter Pedro C. Ramos holding CAPASCO liable for backwages, 13th month pay, service incentive leave, moral damages, exemplary damages, and attorneys fees.

On the other hand, private respondents, assert that the assailed Decision being a final disposition of the Court of Appeals is appealable to this Court by a Petition for Review on Certiorari under Rule 45 of the Rules of Court and not under Rule 65 thereof. They also claim that petitioners new ground that private respondent Tamondong was a confidential employee of CAPASCO, thus, prohibited from participating in union activities, is not a valid ground to be raised in this Petition for Certiorari seeking the reversal of the assailed Decision and Resolution of the Court of Appeals. Now, given the foregoing arguments raise by both parties, the threshold issue that must first be resolved is whether or not the Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure is the proper remedy for the petitioners, to warrant the reversal of the Decision and Resolution of the Court of Appeals dated 28 October 2003 and 3 June 2004, respectively. The petition must fail. The special civil action for Certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction. 16 The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial function; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. 17 Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. 18 Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority. 19 Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 20 In the case before this Court, petitioners fail to meet the third requisite for the proper invocation of Petition for Certiorari under Rule 65, to wit: that there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. They simply alleged that the Court of Appeals gravely abuse its discretion which amount to lack or excess of jurisdiction in rendering the assailed Decision and Resolution. They did not bother to explain why an appeal cannot possibly cure the errors committed by the appellate court. It must be noted that the questioned Decision of the Court of Appeals was already a disposition on the merits; this Court has no remaining issues to resolve, hence, the proper remedy available to the petitioners is to file Petition for Review under Rule 45 not under Rule 65.

Additionally, the general rule is that a writ of certiorari will not issue where the remedy of appeal is available to the aggrieved party. The remedies of appeal in the ordinary course of law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually exclusive and not alternative or cumulative. 21 Time and again this Court reminded members of the bench and bar that the special civil action of Certiorari cannot be used as a substitute for a lost appeal 22 where the latter remedy is available. Such a remedy will not be a cure for failure to timely file a Petition for Review on Certiorari under Rule 45. Nor can it be availed of as a substitute for the lost remedy of an ordinary appeal, especially if such loss or lapse was occasioned by ones own negligence or error in the choice of remedies. 23 In the case at bar, petitioners received on 9 June 2004 the Resolution of the Court of Appeals dated 3 June 2004 denying their Motion for Reconsideration. Upon receipt of the said Resolution, they had 15 days or until 24 June 2004 within which to file an appeal by way of Petition for Review under Rule 45, but instead of doing so, they just allowed the 15 day period to lapse, and then on the 61st day from receipt of the Resolution denying their Motion for Reconsideration, they filed this Petition for Certiorari under Rule 65 alleging grave abuse of discretion on the part of the appellate court. Admittedly, this Court, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, has the discretion to treat a Petition for Certiorari as a Petition for Review on Certiorari under Rule 45, especially if filed within the reglementary period for filing a Petition for Review. 24 However, in the present case, this Court finds no compelling reason to justify a liberal application of the rules, as this Court did in the case of Delsan Transport Lines, Inc. v. Court of Appeals. 25 In the said case, this Court treated the Petition for Certiorari filed by the petitioner therein as having been filed under Rule 45 because said Petition was filed within the 15-day reglementary period for filing a Petition for Review on Certiorari. Petitioners counsel therein received the Court of Appeals Resolution denying their Motion for Reconsideration on 26 October 1993 and filed the Petition for Certiorari on 8 November 1993, which was within the 15-day reglementary period for filing a Petition for Review on Certiorari. It cannot therefore be claimed that the Petition was used, as a substitute for appeal after that remedy has been lost through the fault of the petitioner. 26 Conversely, such was not the situation in the present case. Hence, this Court finds no reason to justify a liberal application of the rules. Accordingly, where the issue or question involves or affects the wisdom or legal soundness of the decision, and not the jurisdiction of the court to render said decision, the same is beyond the province of a petition for certiorari. 27 It is obvious in this case that the arguments raised by the petitioners delved into the wisdom or legal soundness of the Decision of the Court of Appeals, therefore, the proper remedy is a Petition for Review on Certiorari under Rule 45. Consequently, it is incumbent upon this Court to dismiss this Petition. In any event, granting arguendo, that the present petition is proper, still it is dismissible. The Court of Appeals cannot be said to have acted with grave abuse of discretion amounting to lack or excess of jurisdiction in annulling the Decision of the NLRC because the findings of the Court of Appeals that private respondent Tamondong was indeed a supervisory employee and not a managerial employee, thus, eligible to join or participate in the union activities of private respondent CUSE, were supported by evidence on record. In the Decision of the Court of Appeals dated 28 October 2003, it made reference to the Memorandum 28 dated 12 September

1996, which required private respondent Tamondong to observe fixed daily working hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00 pm. This imposition upon private respondent Tamondong, according to the Court of Appeals, is very uncharacteristic of a managerial employee. To support such a conclusion, the Court of Appeals cited the case of Engineering Equipment, Inc. v. NLRC 29 where this Court held that one of the essential characteristics 30 of an employee holding a managerial rank is that he is not subjected to the rigid observance of regular office hours or maximum hours of work. Moreover, the Court of Appeals also held that upon careful examination of the documents submitted before it, it found out that: [Private respondent] Tamondong may have possessed enormous powers and was performing important functions that goes with the position of Personnel Superintendent, nevertheless, there was no clear showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major business and operational policies for and in behalf of CAPASCO. [Petitioner] CAPASCO miserably failed to establish that [private respondent] Tamondong was authorized to act in the interest of the company using his independent judgment. x x x. Withal, [private respondent] Tamondong may have been exercising certain important powers, such as control and supervision over erring rank-and-file employees, however, x x x he does not possess the power to hire, transfer, terminate, or discipline erring employees of the company. At the most, the record merely showed that [private respondent] Tamondong informed and warned rank-and-file employees with respect to their violations of CAPASCOs rules and regulations. x x x. [Also, the functions performed by private respondent such as] issuance of warning 31 to employees with irregular attendance and unauthorized leave of absences and requiring employees to explain regarding charges of abandonment of work, are normally performed by a mere supervisor, and not by a manager. 32 Accordingly, Article 212(m) of the Labor Code, as amended, differentiates supervisory employees from managerial employees, to wit: supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment; whereas, managerial employees are those who are vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. Thus, from the foregoing provision of the Labor Code, it can be clearly inferred that private respondent Tamondong was just a supervisory employee. Private respondent Tamondong did not perform any of the functions of a managerial employee as stated in the definition given to it by the Code. Hence, the Labor Code 33 provisions regarding disqualification of a managerial employee from joining, assisting or forming any labor organization does not apply to herein private respondent Tamondong. Being a supervisory employee of CAPASCO, he cannot be prohibited from joining or participating in the union activities of private respondent CUSE, and in making such a conclusion, the Court of Appeals did not act whimsically, capriciously or in a despotic manner, rather, it was guided by the evidence submitted before it. Thus, given the foregoing findings of the Court of Appeals that private respondent is a supervisory employee, it is indeed an unfair labor practice 34 on the part of petitioner CAPASCO to dismiss him on account of his union activities, thereby curtailing his constitutionally guaranteed right to self-organization. 35

With regard to the allegation that private respondent Tamondong was not only a managerial employee but also a confidential employee, the same cannot be validly raised in this Petition for Certiorari. It is settled that an issue which was not raised in the trial court cannot be raised for the first time on appeal. This principle applies to a special civil action for certiorari under Rule 65. 36 In addition, petitioners failed to adduced evidence which will prove that, indeed, private respondent was also a confidential employee. WHEREFORE, premises considered, the instant Petition is DISMISSED. The Decision and Resolution of the Court of Appeals dated 28 October 2003 and 3 June 2004, respectively, in CAG.R. SP No. 57179, which annulled the Decision of the NLRC in NLRC Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998, is hereby AFFIRMED. With costs against petitioners. SO ORDERED. MINITA V. CHICO-NAZARIO Associate Justice
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G.R. No. 110399 August 15, 1997 SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

ROMERO, J.: This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner." The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election.

The antecedent facts are undisputed: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit. On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit. Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis. On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings. On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part:
. . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election. WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join

the proposed bargaining unit and are therefore excluded from those who could participate 3 in the certification election.

Hence this petition. For resolution in this case are the following issues: 1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union. 2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union. There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not. Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. 5 The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 6 The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ''confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. 7 "Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company's position with regard to contract negotiations, the disposition of grievances, or other labor relations matters." 8 There have been precedents in this regards, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court held that "if these managerial employees would

belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become companydominated with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. FerrerCalleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC" 11 which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them. 12 An important element of the "confidential employee rule" is the employee's need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee's necessary access to confidential labor relations information. 13 It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires submitted by the Union. 14 In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to "labor relations." 15 Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association." 17 "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." 19 Herein listed are the functions of supervisors 3 and higher: 1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products. 3. To administer efficient system of evaluation of products in the outlets. 4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials. 5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20 It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board, 21 "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's internal business operations and which is not related to the field of labor relations." It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives of their choosing. 22 In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 23 In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out. It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds

that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests. This Court finds the contention of the petitioner meritorious. An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 24 A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. 25 It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. 27 The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. CallejaFerrer where all non-academic rank and file employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative. WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a

certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted. SO ORDERED. Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.
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G.R. No. 161933

April 22, 2008

STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-NUBE), petitioner, vs. STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in her capacity as Chief Executive Officer, Philippines, Standard Chartered Bank, respondents. DECISION AUSTRIA-MARTINEZ, J.: For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the Rules of Court, assailing the Decision1 dated October 9, 2002 and Resolution2 dated January 26, 2004 issued by the Court of Appeals (CA), dismissing their petition and affirming the Secretary of Labor and Employment's Orders dated May 31, 2001 and August 30, 2001. Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA already expired. Due to a deadlock in the negotiations, petitioner filed a Notice of Strike prompting the Secretary of Labor and Employment to assume jurisdiction over the labor dispute. On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and Employment (DOLE) issued an Order with the following dispositive portion: WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank and the Standard Chartered Bank Employees Union are directed to execute their collective bargaining agreement effective 01 April 2001 until 30 March 2003 incorporating therein the foregoing dispositions and the agreements they reached in the course of negotiations and conciliation. All other submitted issues that were not passed upon are dismissed. The charge of unfair labor practice for bargaining in bad faith and the claim for damages relating thereto are hereby dismissed for lack of merit.

Finally, the charge of unfair labor practice for gross violation of the economic provisions of the CBA is hereby dismissed for want of jurisdiction. SO ORDERED.3 Both petitioner and the Bank filed their respective motions for reconsideration, which were denied by the Secretary per Order dated August 30, 2001.4 Petitioner sought recourse with the CA via a petition for certiorari, and in the assailed Decision dated October 9, 20025 and Resolution dated January 26, 2004,6 the CA dismissed their petition and affirmed the Secretary's Orders. Hence, herein petition based on the following grounds: I. THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO BASIS FOR REVISING THE SCOPE OF EXCLUSIONS FROM THE APPROPRIATE BARGAINING UNIT UNDER THE CBA. II. THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR LESS TEMPORARY OCCUPATION OF A POSITION (ACTING CAPACITY) DOES NOT MERIT ADJUSTMENT IN REMUNERATION.7 The resolution of this case has been overtaken by the execution of the parties' 2003-2005 CBA. While this would render the case moot and academic, nevertheless, the likelihood that the same issues will come up in the parties' future CBA negotiations is not far-fetched, thus compelling its resolution. Courts will decide a question otherwise moot if it is capable of repetition yet evading review.[8] The CBA provisions in dispute are the exclusion of certain employees from the appropriate bargaining unit and the adjustment of remuneration for employees serving in an acting capacity for one month. In their proposal, petitioner sought the exclusion of only the following employees from the appropriate bargaining unit all managers who are vested with the right to hire and fire employees, confidential employees, those with access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources (HR) staff.9 In the previous 1998-2000 CBA,10 the excluded employees are as follows: A. All covenanted and assistant officers (now called National Officers)

B. One confidential secretary of each of the: 1. Chief Executive, Philippine Branches 2. Deputy Chief Executive/Head, Corporate Banking Group 3. Head, Finance 4. Head, Human Resources 5. Manager, Cebu 6. Manager, Iloilo 7. Covenanted Officers provided said positions shall be filled by new recruits. C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other branch that the BANK may establish in the country. D. Personnel of the Telex Department E. All Security Guards F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as amended by R.A. 6715, casuals or emergency employees; and G. One (1) HR Staff11 The Secretary, however, maintained the previous exclusions because petitioner failed to show that the employees sought to be removed from the list qualify for exclusion.12 With regard to the remuneration of employees working in an acting capacity, it was petitioner's position that additional pay should be given to an employee who has been serving in a temporary/acting capacity for one week. The Secretary likewise rejected petitioner's proposal and instead, allowed additional pay for those who had been working in such capacity for one month. The Secretary agreed with the Bank's position that a restrictive provision would curtail management's prerogative, and at the same time, recognized that employees should not be made to work in an acting capacity for long periods of time without adequate compensation. The Secretary's disposition of the issues raised by petitioner were affirmed by the CA.13 The Court sustains the CA. Whether or not the employees sought to be excluded from the appropriate bargaining unit are confidential employees is a question of fact, which is not a proper issue in a petition for review under Rule 45 of the Rules of Court.14 This holds more true in the present case in which petitioner failed to controvert with evidence the findings of the Secretary and the CA.

The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.15 In this case, the question that needs to be answered is whether the Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are confidential employees, such that they should be excluded. As regards the qualification of bank cashiers as confidential employees, National Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter v. Torres16 declared that they are confidential employees having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, and therefore, disqualified from joining or assisting a union; or joining, assisting or forming any other labor organization.17 Golden Farms, Inc. v. Ferrer-Calleja18 meanwhile stated that "confidential employees such as accounting personnel, radio and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement."19 Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission,20 the Court designated personnel staff, in which human resources staff may be qualified, as confidential employees because by the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Petitioner insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside from its generalized arguments, and despite the Secretary's finding that there was no evidence to support it, petitioner still failed to substantiate its claim. Petitioner did not even bother to state the nature of the duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees. As aptly stated by the CA: While We agree that petitioner's proposed revision is in accordance with the law, this does not necessarily mean that the list of exclusions enumerated in the 1998-2000 CBA is contrary to law. As found by public respondent, petitioner failed to show that the employees sought to be removed from the list of exclusions are actually rank and file employees who are not managerial or confidential in status and should, accordingly, be included in the appropriate bargaining unit.

Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and one (1) HR Staff have mutuality of interest with the other rank and file employees, then they are rightfully excluded from the appropriate bargaining unit. x x x21(Emphasis supplied) Petitioner cannot simply rely on jurisprudence without explaining how and why it should apply to this case. Allegations must be supported by evidence. In this case, there is barely any at all. There is likewise no reason for the Court to disturb the conclusion of the Secretary and the CA that the additional remuneration should be given to employees placed in an acting capacity for one month. The CA correctly stated: Likewise, We uphold the public respondent's Order that no employee should be temporarily placed in a position (acting capacity) for more than one month without the corresponding adjustment in the salary. Such order of the public respondent is not in violation of the "equal pay for equal work" principle, considering that after one (1) month, the employee performing the job in an acting capacity will be entitled to salary corresponding to such position. xxxx In arriving at its Order, the public respondent took all the relevant evidence into account and weighed both parties arguments extensively. Thus, public respondent concluded that a restrictive provision with respect to employees being placed in an acting capacity may curtail management's valid exercise of its prerogative. At the same time, it recognized that employees should not be made to perform work in an acting capacity for extended periods of time without being adequately compensated. x x x22 Thus, the Court reiterates the doctrine that: [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor and Employment, when supported by substantial evidence, are entitled to great respect in view of their expertise in their respective fields. Judicial review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor official's findings rest. It is not our function to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that function of the Court to the review or revision of errors of law and not to a second analysis of the evidence. x x x Thus, absent any showing of whimsical or capricious exercise of judgment, and unless lack of any basis for the conclusions made by the appellate court be amply demonstrated, we may not disturb such factual findings.23 WHEREFORE, the petition is DENIED.

SO ORDERED. Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

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G.R. No. 157117

November 20, 2006

COASTAL SUBIC BAY TERMINAL, INC., Petitioner, vs. DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP, Respondents. DECISION QUISUMBING, J.: For review on certiorari is the Court of Appeals Decision1 dated August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution2 dated February 5, 2003, denying petitioners motion for reconsideration. The Court of Appeals had affirmed the Decision3 dated March 15, 1999 of the Secretary of the Department of Labor and Employment (DOLE) reversing the Mediator Arbiters dismissal of private respondents petitions for certification election. The facts are as follows: On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a legitimate labor organization having been issued a charter certificate by the Associated Labor Union (ALU), and the supervisory union by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also alleged that the establishment in which they sought to operate was unorganized. Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that the rank-and-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining units were not particularly described. Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling, both petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the same federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect affiliated with only one federation.4

The Med-Arbiter ruled as follows: Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions to be invalid and unwarranted. Consequently, this Office has no recourse but to dismiss both petitions without prejudice to the refiling of either. WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby DISMISSED. SO ORDERED.5 Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter. The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities to file their separate petitions for certification election. The Secretary held that APSOTEU is a legitimate labor organization because it was properly registered pursuant to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the rule applicable at the time of its registration. It further ruled that ALU and APSOTEU are separate and distinct labor unions having separate certificates of registration from the DOLE. They also have different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor organizations having been chartered respectively by ALU and APSOTEU after submitting all the requirements with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the holding of separate certification election, viz: WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let separate certification elections be conducted immediately among the appropriate employees of CSBTI, after the usual pre-election conference, with the following choices: I. For all rank and file employees of CSBTI: 1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNIONALU-TUCP; and 2. NO UNION. II. For all supervisory employees of CSBTI: 1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU; and 2. NO UNION. The latest payroll of the employer, including its payrolls for the last three months immediately preceding the issuance of this decision, shall be the basis for determining the qualified list of voters. SO DECIDED.6

The motion for reconsideration was also denied.7 On appeal, the Court of Appeals affirmed the decision of the Secretary.8 It held that there was no grave abuse of discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be accorded with respect and finality.9 The motion for reconsideration was likewise denied.10 Hence, the instant petition by the company anchored on the following grounds: I THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED RULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE REGIONAL DIRECTOR. II THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU. III THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE "UNION AUTONOMY" THEORY. IV IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS ARE "SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS: (1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-ARBITERS FACTUAL FINDINGS; AND (2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."11 Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification election?; (2) Was the Secretarys decision based on stare decisis correct?; and (3) Were private respondents engaged in commingling? The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother federation.

Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from the BLR; that it is the BLR that is authorized to process applications and issue certificates of registration in accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor;12 that the certificates of registration issued by the DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab initio for being ultra vires; and that the Court of Appeals erred when it ruled that the law applicable at the time of APSOTEUs registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715. Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status of a legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong,13 where we held therein that Amigo Employees Union was not a duly registered independent union absent any record of its registration with the Bureau. Pertinent is Article 23514 of the Labor Code which provides that applications for registration shall be acted upon by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the Labor Relations Division in the Regional Offices of the Department of Labor.15 Further, Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code (Implementing Rules) provides that: Section 2. Where to file application; procedure 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 applicants principal offices is located. The Bureau or the Regional Office shall immediately process and approve or deny the application. In case of approval, the Bureau or the Regional Office shall issue the registration certificate within thirty (30) calendar days from receipt of the application, together with all the requirements for registration as hereinafter provided. 16 The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus: SECTION 1. Where to file applications. The application for registration of any federation, national or industry union or trade union center shall be filed with the Bureau. Where the application is filed with the Regional Office, the same shall be immediately forwarded to the Bureau within forty-eight (48) hours from filing thereof, together with all the documents supporting the registration. The applications for registration of an independent union shall be filed with and acted upon by the Regional Office where the applicants principal office is located . xxxx The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of the above implementing rules. The new implementing rules explicitly provide that applications for registration of labor organizations shall be filed either with the Regional Office or with the BLR.17

Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over applications for registration by labor organizations. The amendments to the implementing rules merely specified that when the application was filed with the Regional Office, the application would be acted upon by the BLR. The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable at that time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took effect only on June 21, 1997. Thus, considering further that APSOTEUs principal office is located in Diliman, Quezon City, and its registration was filed with the NCR Regional Office, the certificate of registration is valid. The petitioner misapplied Villar v. Inciong.18 In said case, there was no record in the BLR that Amigo Employees Union was registered.19 Did the Court of Appeals err in its application of stare decisis when it upheld the Secretarys ruling that APSOTEU is a legitimate labor organization and its personality cannot be assailed unless in an independent action for cancellation of registration certificate?20 We think not. Section 5, Rule V, Book V of the Implementing Rules states: Section 5. Effect of registration The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but maybe questioned only in an independent petition for cancellation in accordance with these Rules.21 Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates.22 It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate. Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities between them? Are they commingled? The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction, APSOTEU and ALU are the same federation. Private respondents disagree. First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.23 In addition, the legal personality of a labor organization cannot be collaterally attacked.24 Thus, when the personality of the labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of registration against either APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a separate legal personality. The CSBTI-RFU and CSBTI-

SU are therefore affiliated with distinct and separate federations, despite the commonalities of APSOTEU and ALU. Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter certificate issued by a duly registered federation or national union, and reported to the Regional Office in accordance with the rules implementing the Labor Code.25 A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter.26 Hence, local unions are considered principals while the federation is deemed to be merely their agent.27 As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.1wphi1 A word of caution though, under Article 245 of the Labor Code,28 supervisory employees are not eligible for membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of potential conflicts of interest.29 Further, to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors labor union would represent conflicting interests, a local supervisors union should not be allowed to affiliate with the national federation of unions of rank-and-file employees where that federation actively participates in the union activity within the company.30 Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors local union applying for membership in a national federation the members of which include local unions of rank-and-file employees.31 In De La Salle University Medical Center and College of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the supervisory union and the rank-and-file union are affiliated with a single federation. In addition, the supervisors must have direct authority over the rank-and-file employees.32 In the instant case, the national federations that exist as separate entities to which the rank-andfile 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.1wphi1 The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power in respect of the terms and conditions of labor.33 When there is commingling of officers of a rank-and-file union with a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the

freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves. WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is hereby AFFIRMED. SO ORDERED. LEONARDO A. QUISUMBING Associate Justice
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G.R. No. 162025

August 3, 2010

TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY, Petitioner, vs. ASIA BREWERY, INC., Respondent. DECISION VILLARAMA, JR., J.: For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated November 22, 2002 and Resolution2 dated January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 55578, granting the petition of respondent company and reversing the Voluntary Arbitrators Decision3 dated October 14, 1999. The facts are: Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled water and glass products. ABI entered into a Collective Bargaining Agreement (CBA),4 effective for five (5) years from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining representative of ABIs rank-and-file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31 July 2003.5 Article I of the CBA defined the scope of the bargaining unit, as follows: Section 1. Recognition. The COMPANY recognizes the UNION as the sole and exclusive bargaining representative of all the regular rank-and-file daily paid employees within the scope

of the appropriate bargaining unit with respect to rates of pay, hours of work and other terms and conditions of employment. The UNION shall not represent or accept for membership employees outside the scope of the bargaining unit herein defined. Section 2. Bargaining Unit. The bargaining unit shall be comprised of all regular rank-and-file daily-paid employees of the COMPANY. However, the following jobs/positions as herein defined shall be excluded from the bargaining unit, to wit: 1. Managers 2. Assistant Managers 3. Section Heads 4. Supervisors 5. Superintendents 6. Confidential and Executive Secretaries 7. Personnel, Accounting and Marketing Staff 8. Communications Personnel 9. Probationary Employees 10. Security and Fire Brigade Personnel 11. Monthly Employees 12. Purchasing and Quality Control Staff6 [emphasis supplied.] Subsequently, a dispute arose when ABIs management stopped deducting union dues from eighty-one (81) employees, believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18) of these affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of the Quality Control Staff. Twenty (20) checkers are assigned at the Materials Department of the Administration Division, Full Goods Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks directly under their respective division managers.7 BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to selforganization and brought the matter to the grievance machinery. As the parties failed to amicably settle the controversy, BLMA-INDEPENDENT lodged a complaint before the National Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the case for arbitration to resolve the issue of "[w]hether or not there is restraint to employees in the exercise of their right to self-organization."8

In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after finding that the records submitted by ABI showed that the positions of the subject employees qualify under the rank-and-file category because their functions are merely routinary and clerical. He noted that the positions occupied by the checkers and secretaries/clerks in the different divisions are not managerial or supervisory, as evident from the duties and responsibilities assigned to them. With respect to QA Sampling Inspectors/Inspectresses and Machine Gauge Technician, he ruled that ABI failed to establish with sufficient clarity their basic functions as to consider them Quality Control Staff who were excluded from the coverage of the CBA. Accordingly, the subject employees were declared eligible for inclusion within the bargaining unit represented by BLMA-INDEPENDENT.9 On appeal, the CA reversed the Voluntary Arbitrator, ruling that: WHEREFORE, foregoing premises considered, the questioned decision of the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED and SET ASIDE, and A NEW ONE ENTERED DECLARING THAT: a) the 81 employees are excluded from and are not eligible for inclusion in the bargaining unit as defined in Section 2, Article I of the CBA; b) the 81 employees cannot validly become members of respondent and/or if already members, that their membership is violative of the CBA and that they should disaffiliate from respondent; and c) petitioner has not committed any act that restrained or tended to restrain its employees in the exercise of their right to self-organization. NO COSTS. SO ORDERED.10 BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification election was held on August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the incumbent bargaining representative of ABIs rank-and-file employees claiming interest in the outcome of the case, petitioner filed with the CA an omnibus motion for reconsideration of the decision and intervention, with attached petition signed by the union officers.11 Both motions were denied by the CA.12 The petition is anchored on the following grounds: (1) THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2, ARTICLE 1 OF THE CBA[;]

(2) THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY SHOULD DISAFFILIATE FROM RESPONDENT; (3) THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION.13 Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.14 Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees because if allowed to be affiliated with a Union, the latter might not be assured of their loyalty in view of evident conflict of interests and the Union can also become company-denominated with the presence of managerial employees in the Union membership.15 Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.16 In Philips Industrial Development, Inc. v. NLRC,17 this Court held that petitioners "division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems" are confidential employees not included within the rank-and-file bargaining unit.18 Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor,19 we declared that legal secretaries who are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as required by the legal personnel of the corporation, fall under the category of confidential employees and hence excluded from the bargaining unit composed of rank-and-file employees.20 Also considered having access to "vital labor information" are the executive secretaries of the General Manager and the executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director, Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager.21 In the present case, the CBA expressly excluded "Confidential and Executive Secretaries" from the rank-and-file bargaining unit, for which reason ABI seeks their disaffiliation from petitioner. Petitioner, however, maintains that except for Daisy Laloon, Evelyn Mabilangan and Lennie

Saguan who had been promoted to monthly paid positions, the following secretaries/clerks are deemed included among the rank-and-file employees of ABI:22 NAME C1 ADMIN DIVISION 1. Angeles, Cristina C. 2. Barraquio, Carina P. 3. Cabalo, Marivic B. 4. Fameronag, Leodigario C. 1. Abalos, Andrea A. 2. Algire, Juvy L. 3. Anouevo, Shirley P. 4. Aviso, Rosita S. 5. Barachina, Pauline C. 6. Briones, Catalina P. 7. Caralipio, Juanita P. 8. Elmido, Ma. Rebecca S. 9. Giron, Laura P. 10. Mane, Edna A. xxxx C2 BREWERY DIVISION 1. Laloon, Daisy S. 1. Arabit, Myrna F. 2. Burgos, Adelaida D. 3. Menil, Emmanuel S. 4. Nevalga, Marcelo G. 1. Mapola, Ma. Esraliza T. 2. Velez, Carmelito A. 1. Bordamonte, Rhumela D. 2. Deauna, Edna R. 3. Punongbayan, Marylou F. 4. Saguan, Lennie Y. 1. Alcoran, Simeon A. 2. Cervantes, Ma. Sherley Y. Brewhouse Bottling Production Bottling Production Bottling Production Bottling Production Mr. William Tan Mr. Julius Palmares Mr. Julius Palmares Mr. Julius Palmares Mr. Julius Palmares DEPARTMENT Transportation Transportation Transportation Transportation Materials Materials Materials Materials Materials Materials Materials Materials Materials Materials IMMEDIATE SUPERIOR Mr. Melito K. Tan Mr. Melito K. Tan Mr. Melito K. Tan Mr. Melito K. Tan Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co Mr. Andres G. Co

Bottling Maintenance Mr. Ernesto Ang Bottling Maintenance Mr. Ernesto Ang Bottled Water Bottled Water Bottled Water Bottled Water Full Goods Full Goods Mr. Faustino Tetonche Mr. Faustino Tetonche Mr. Faustino Tetonche Mr. Faustino Tetonche Mr. Tsoi Wah Tung Mr. Tsoi Wah Tung

3. Diongco, Ma. Teresa M. 4. Mabilangan, Evelyn M. 5. Rivera, Aurora M. 6. Salandanan, Nancy G. 1. Magbag, Ma. Corazon C.

Full Goods Full Goods Full Goods Full Goods Tank Farm/ Cella Services

Mr. Tsoi Wah Tung Mr. Tsoi Wah Tung Mr. Tsoi Wah Tung Mr. Tsoi Wah Tung Mr. Manuel Yu Liat

1. Capiroso, Francisca A. 1. Alconaba, Elvira C. 2. Bustillo, Bernardita E. 3. Catindig, Ruel A. 4. Sison, Claudia B. xxxx C3 PACKAGING DIVISION 1. Alvarez, Ma. Luningning L. 2. Caiza, Alma A. 3. Cantalejo, Aida S. 4. Castillo, Ma. Riza R. 5. Lamadrid, Susana C. 6. Mendoza, Jennifer L.

Quality Assurance Engineering Electrical Civil Works Utilities

Ms. Regina Mirasol Mr. Clemente Wong Mr. Jorge Villarosa Mr. Roger Giron Mr. Venancio Alconaba

GP Administration GP Technical GP Engineering GP Production GP Production GP Technical

Ms. Susan Bella Mr. Chen Tsai Tyan Mr. Noel Fernandez Mr. Tsai Chen Chih Mr. Robert Bautista Mr. Mel Oa

As can be gleaned from the above listing, it is rather curious that there would be several secretaries/clerks for just one (1) department/division performing tasks which are mostly routine and clerical. Respondent insisted they fall under the "Confidential and Executive Secretaries" expressly excluded by the CBA from the rank-and-file bargaining unit. However, perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities involve routine activities of recording and monitoring, and other paper works for their respective departments while secretarial tasks such as receiving telephone calls and filing of office correspondence appear to have been commonly imposed as additional duties.23 Respondent failed to indicate who among these numerous secretaries/clerks have access to confidential data relating to management policies that could give rise to potential conflict of interest with their Union membership. Clearly, the rationale under our previous rulings for the exclusion of executive secretaries or division secretaries would have little or no significance considering the lack of or very limited access to confidential information of these secretaries/clerks. It is not even farfetched that the job category may exist only on paper since they are all daily-paid workers. Quite understandably, petitioner had earlier expressed the view that the positions were just being "reclassified" as these employees actually discharged routine functions.

We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees and not confidential employees. With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there seems no dispute that they form part of the Quality Control Staff who, under the express terms of the CBA, fall under a distinct category. But we disagree with respondents contention that the twenty (20) checkers are similarly confidential employees being "quality control staff" entrusted with the handling and custody of company properties and sensitive information. Again, the job descriptions of these checkers assigned in the storeroom section of the Materials Department, finishing section of the Packaging Department, and the decorating and glass sections of the Production Department plainly showed that they perform routine and mechanical tasks preparatory to the delivery of the finished products.24 While it may be argued that quality control extends to post-production phase -- proper packaging of the finished products -- no evidence was presented by the respondent to prove that these daily-paid checkers actually form part of the companys Quality Control Staff who as such "were exposed to sensitive, vital and confidential information about [companys] products" or "have knowledge of mixtures of the products, their defects, and even their formulas" which are considered trade secrets. Such allegations of respondent must be supported by evidence.25 Consequently, we hold that the twenty (20) checkers may not be considered confidential employees under the category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file bargaining unit. Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the "confidential employee rule."26 There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential capacity to managerial employees and obtained confidential information relating to labor relations policies. And even assuming that they had exposure to internal business operations of the company, respondent claimed, this is not per se ground for their exclusion in the bargaining unit of the daily-paid rank-and-file employees.27 Not being confidential employees, the secretaries/clerks and checkers are not disqualified from membership in the Union of respondents rank-and-file employees. Petitioner argues that respondents act of unilaterally stopping the deduction of union dues from these employees constitutes unfair labor practice as it "restrained" the workers exercise of their right to selforganization, as provided in Article 248 (a) of the Labor Code. Unfair labor practice refers to "acts that violate the workers right to organize." The prohibited acts are related to the workers right to self organization and to the observance of a CBA. For a

charge of unfair labor practice to prosper, it must be shown that ABI was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted x x x"28 from ABIs act in discontinuing the union dues deduction from those employees it believed were excluded by the CBA. Considering that the herein dispute arose from a simple disagreement in the interpretation of the CBA provision on excluded employees from the bargaining unit, respondent cannot be said to have committed unfair labor practice that restrained its employees in the exercise of their right to self-organization, nor have thereby demonstrated an anti-union stance. WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of respondent company are hereby declared rank-and-file employees who are eligible to join the Union of the rank-and-file employees. No costs. SO ORDERED. MARTIN S. VILLARAMA, JR. Associate Justice
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G.R. No. 146206

August 1, 2011

SAN MIGUEL FOODS, INCORPORATED, Petitioner, vs. SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION, Respondent. DECISION PERALTA, J.: The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt employees in the proposed bargaining unit, thereby allowing their participation in the certification election; the application of the "community or mutuality of interests" test; and the determination of the employees who belong to the category of confidential employees, are not novel. In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,1 the Court held that even if they handle confidential data regarding technical and internal business operations, supervisory employees 3 and 4 and the exempt employees of

petitioner San Miguel Foods, Inc. (SMFI) are not to be considered confidential employees, because the same do not pertain to labor relations, particularly, negotiation and settlement of grievances. Consequently, they were allowed to form an appropriate bargaining unit for the purpose of collective bargaining. The Court also declared that the employees belonging to the three different plants of San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having "community or mutuality of interests," constitute a single bargaining unit. They perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. It was immaterial that the three plants have different locations as they did not impede the operations of a single bargaining representative.2 Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment National Capital Region (DOLE-NCR) conducted pre-election conferences.3 However, there was a discrepancy in the list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the Cabuyao plant, while respondent listed 60 and 82, respectively.4 On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order5 directing Election Officer Cynthia Tolentino to proceed with the conduct of certification election in accordance with Section 2, Rule XII of Department Order No. 9. On September 30, 1998, a certification election was conducted and it yielded the following results,6 thus: Cabuyao San Fernando Total Plant Plant Yes No Spoiled Segregated 23 0 2 41 23 0 0 35 58 46 0 2 76 124

Total Votes Cast 66

On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to Voters,7 questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong to the bargaining unit which respondent seeks to represent or that there is no existence of employer-employee relationship with petitioner. Specifically, it argued that certain employees should not be allowed to vote as they are: (1) confidential employees; (2) employees assigned to the live chicken operations, which are not covered by the bargaining unit; (3) employees whose job grade is level 4, but are performing managerial work and scheduled to be promoted; (4) employees who belong to the Barrio Ugong plant; (5) nonSMFI employees; and (6) employees who are members of other unions.

On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing that the employees in the submitted list are covered by the original petition for certification election and belong to the bargaining unit it seeks to represent and, likewise, directing petitioner to substantiate the allegations contained in its Omnibus Objections and Challenge to Voters.8 In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is the Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted individual and separate declarations of the employees whose votes were challenged in the election.9 Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the final tally showed that: number of eligible voters 149; number of valid votes cast 121; number of spoiled ballots - 3; total number of votes cast 124, with 118 (i.e., 46 + 72 = 118 ) "Yes" votes and 3 "No" votes.10 The Med-Arbiter issued the Resolution11 dated February 17, 1999 directing the parties to appear before the Election Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the segregated ballots. Thereafter, on April 12, 1999, the segregated ballots were opened, showing that out of the 76 segregated votes, 72 were cast for "Yes" and 3 for "No," with one "spoiled" ballot.12 Based on the results, the Med-Arbiter issued the Order13 dated April 13, 1999, stating that since the "Yes" vote received 97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis. On appeal, the then Acting DOLE Undersecretary, in the Resolution14 dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-M-9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias, Alma Maria M. Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining unit which respondent seeks to represent. She opined that the challenged voters should be excluded from the bargaining unit, because Matias and Lozano are members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos Reyes and Pajaron are employees of San Miguel Corporation, which is a separate and distinct entity from petitioner. Petitioners Partial Motion for Reconsideration15 dated August 14, 1999 was denied by the then Acting DOLE Undersecretary in the Order16 dated August 27, 1999. In the Decision17 dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v. The Honorable Office of the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation Supervisors and Exempt Union, the Court of Appeals (CA) affirmed with modification the Resolution dated July 30, 1999 of the DOLE Undersecretary, stating that those

holding the positions of Human Resource Assistant and Personnel Assistant are excluded from the bargaining unit. Petitioners Motion for Partial Reconsideration18 dated May 23, 2000 was denied by the CA in the Resolution19 dated November 28, 2000. Hence, petitioner filed this present petition raising the following issues: I. WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO. 110399. II. WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE SPECIFICALLY, THIS COURT'S DEFINITION OF A "CONFIDENTIAL EMPLOYEE" - WHEN IT RULED FOR THE INCLUSION OF THE "PAYROLL MASTER" POSITION IN THE BARGAINING UNIT. III. WHETHER THIS PETITION IS A "REHASH" OR A "RESURRECTION" OF THE ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE RESPONDENT. Petitioner contends that with the Court's ruling in G.R. No. 11039920 identifying the specific employees who can participate in the certification election, i.e., the supervisors (levels 1 to 4) and exempt employees of San Miguel Poultry Products Plants in Cabuyao, San Fernando, and Otis, the CA erred in expanding the scope of the bargaining unit so as to include employees who do not belong to or who are not based in its Cabuyao or San Fernando plants. It also alleges that the employees of the Cabuyao, San Fernando, and Otis plants of petitioners predecessor, San Miguel Corporation, as stated in G.R. No. 110399, were engaged in "dressed" chicken processing, i.e., handling and packaging of chicken meat, while the new bargaining unit, as defined by the CA in the present case, includes employees engaged in "live" chicken operations, i.e., those who breed chicks and grow chickens. Respondent counters that petitioners proposed exclusion of certain employees from the bargaining unit was a rehashed issue which was already settled in G.R. No. 110399. It maintains that the issue of union membership coverage should no longer be raised as a certification election already took place on September 30, 1998, wherein respondent won with 97% votes. Petitioners contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is defined as a group of employees of a given

employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.21 In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union United Lumber and General Workers of the Phils,22 the Court, taking into account the "community or mutuality of interests" test, ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It held that while the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interest. This is so because the basic test of an asserted bargaining units acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights.23 Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in the same way that the company needs them both. There may be differences as to the nature of their individual assignments, but the distinctions are not enough to warrant the formation of a separate bargaining unit.24 Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only one bargaining unit for the employees in Cabuyao, San Fernando, and Otis25 of Magnolia Poultry Products Plant involved in "dressed" chicken processing and Magnolia Poultry Farms engaged in "live" chicken operations. Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit. Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a confidential employee and, thus, prays that the said position and all other positions with access to salary and compensation data be excluded from the bargaining unit. This argument must fail. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.26 The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the "confidential employee rule."27

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of the employers property.28 Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage.29 However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit. Corollarily, although Article 24530 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and, hence, are likewise privy to sensitive and highly confidential records.31 Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence of managerial employees in the union membership.32 Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.331avvphi1 In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant,34 the scope of ones work necessarily involves labor relations, recruitment and selection of employees, access to employees' personal files and compensation package, and human resource management. As regards a Personnel Assistant,35 one's work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioners team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership. The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered in such proceedings can attain finality.36 Applying the doctrine of res judicata, the issue in the present case pertaining to the coverage of the employees who would constitute the bargaining unit is now a foregone conclusion.

It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the personality to dispute the same. The general rule is that an employer has no standing to question the process of certification election, since this is the sole concern of the workers.37 Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other.38 The only exception is where the employer itself has to file the petition pursuant to Article 25839 of the Labor Code because of a request to bargain collectively.40 With the foregoing disquisition, the Court writes finis to the issues raised so as to forestall future suits of similar nature. WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated November 28, 2000 of the Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the Resolutions dated July 30, 1999 and August 27, 1999 of the Secretary of Labor, are AFFIRMED. SO ORDERED. DIOSDADO M. PERALTA Associate Justice
---------------

G.R. No. 96566 January 6, 1992 ATLAS LITHOGRAPHIC SERVICES, INC., petitioner, vs. UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department of Labor and Employment) and ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY, ADMINISTRATIVE, PERSONNEL, PRODUCTION, ACCOUNTING AND CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN), respondents. Romero, Lagman, Valdecantos & Arreza Law Offices for petitioner. Esteban M. Mendoza for private respondent.

GUTIERREZ, JR., J.:p

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the modification of the Order dated 14 December 1990 and the Resolution dated 21 November 1990 issued by the public respondents. The antecedent facts of the case as gathered from the records are as follows: On July 16, 1990, the supervisory, administrative personnel, production, accounting and confidential employees of the petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng Manggagawang Pilipino, a national labor organization. The local union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative, Personnel, Production, Accounting and Confidential Employees Association or ALSI-SAPPACEA-KAMPIL in short and which we shall hereafter refer to as the "supervisors" union. Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the "supervisors" union a petition for certification election so that it could be the sole and exclusive bargaining agent of the supervisory employees. The petitioners opposed the private respondent's petition claiming that under Article 245 of the Labor bode the private respondent cannot represent the supervisory employees for collective bargaining purposeless because the private respondent also represents the rank-and-file employees' union. On September 18, 1990, the Med-Arbiter issued an order in favor of the private respondent, the dispositive portion of which provides:
WHEREFORE, premises considered, a certification election among the supervisory employees belonging to the Administrative, Personnel, Production, Accounting Departments as well as confidential employees performing supervisory functions of Atlas Lithographic Services, Incorporated is hereby ordered conducted within 20 days from receipt hereof, subject to usual pre-election conference, with the following choices: 1. KAMPIL (KATIPUNAN); 2. No union. SO ORDERED. (Rollo, pp. 39-40)

The petitioners, as expected, appealed for the reversal of the above order. The public respondent, however, issued a resolution affirming the Med-Arbiter's order. The petitioners, in turn, filed a motion for reconsideration but the same was denied. Hence, this petition for certiorari. The sole issue to be resolved in this case is whether or not, under Article 245 of the Labor Code, a local union of supervisory employees may be allowed to affiliate with a national federation of labor organizations of rank-and-file employees and which national federation actively represents its affiliates in collective bargaining negotiations with the

same employer of the supervisors and in the implementation of resulting collective bargaining agreements. The petitioner argues that KAMPIL-KATIPUNAN already represents its rank-and-file employees and, therefore, to allow the supervisors of those employees to affiliate with the private respondent is tantamount to allowing the circumvention of the principle of the separation of unions under Article 245 of the Labor Code. It further argues that the intent of the law is to prevent a single labor organization from representing different classes of employees with conflicting interests. The public respondent, on the other hand, contends that despite affiliation with a national federation, the local union does not lose its personality which is separate, and distinct from the national federation. It cites as its legal basis the case of Adamson & Adamson, Inc. v. CIR (127 SCRA 268 [1984]). It maintains that Rep. Act No. 6715 contemplates the principle laid down by this Court in the Adamson case interpreting Section 3 of Rep. Act No. 875 (the Industrial Peace Act) on the right of a supervisor's union to affiliate. The private respondent asserts that the legislature must have noted the Adamson ruling then prevailing when it conceived the reinstatement in the present Labor Code of a similar provision on the right of supervisors to organize. Under the Industrial Peace Act of 1953, employees were classified into three groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and file employees. Supervisors, who were considered employees in relation to their employer could join a union but not a union of rank-and-file employees. With the enactment in 1974 of the Labor Code (Pres Decree No. 442), employees were classified into managerial and rank-and-file employees. Neither the category of supervisors nor their right to organize under the old statute were recognized. So that, in Bulletin Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the Court interpreted the superseding labor law to have removed from supervisors the right to unionize among themselves. The Court ruled:
In the light of the factual background of this case, We are constrained to hold that the supervisory employees of petitioner firm may not, under the law, form a supervisors union, separate and distinct from the existing bargaining unit (BEU), composed of the rank-and-file employees of the Bulletin Publishing Corporation. It is evident that most of the private respondents are considered managerial employees. Also, it is distinctly stated in Section 11, Rule II, of the Omnibus Rules Implementing the Labor Code, that supervisory unions are presently no longer recognized nor allowed to exist and operate as such. (pp. 633, 634)

In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442, the supervisory unions existing since the effectivity of the New Code in January 1, 1975 ceased to operate as such and the members who did not qualify as managerial

employees under this definition in Article 212 (k) therein became eligible to form, to join or assist a rank-and-file union. A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in March 1989 in which employees were reclassified into three groups, namely: (1) the managerial employees; (2) supervisors; and (3) the rank and file employees. Under the present law, the category of supervisory employees is once again recognized. Hence, Art. 212 (m) states:
(m) . . . Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. . . .

The rationale for the amendment is the government's recognition of the right of supervisors to organize with the qualification that they shall not join or assist in the organization of rank-and-file employees. The reason behind the Industrial Peace Act provision on the same subject matter has been adopted in the present statute. The interests of supervisors on the one hand, and the rank-and-file employees on the other, are separate and distinct. The functions of supervisors, being recommendatory in nature, are more identified with the interests of the employer. The performance of those functions may, thus, run counter to the interests of the rank-and-file. This intent of the law is made clear in the deliberations of the legislators on then Senate Bill 530 now enacted as Rep. Act No. 6715. The definition of managerial employees was limited to those having authority to hire and fire while those who only recommend effectively the hiring or firing or transfers of personnel would be considered as closer to rank-and-file employees. The exclusion, therefore, of middle level executives from the category of managers brought about a third classification, the supervisory employees. These supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of conflict of interest (Journal of the Senate, First Regular Session, 1987, 1988, Volume 3, p. 2245). In terms of classification, however, while they are more closely identified with the rankand-file they are still not allowed to join the union of rank-and-file employees. To quote the Senate Journal:
In reply to Sen. Guingona's query whether "supervisors" are included in the term "employee", Sen. Herrera stated that while they are considered as rank-and-file employees, they cannot join the union and they would have to form their own supervisors' union pursuant to Rep. Act 875. (supra, p. 2288)

The peculiar role of supervisors is such that while they are not managers, when they recommend action implementing management policy or ask for the discipline or dismissal of subordinates, they identify with the interests of the employer and may act contrary to the interests of the rank-and-file.

We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes. Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees. In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation. More important, the factual issues in the Adamson case are different from the present case. First, the rank-and-file employees in the Adamson case are not directly under the supervisors who comprise the supervisors' union. In the case at bar, the rank-and file employees are directly under the supervisors organized by one and the same federation. The contemplation of the law in Sec. 3 of the Industrial Peace Act is to prohibit supervisors from joining a labor organization of employees under their supervision. Sec. 3 of the Industrial Peace Act provides:
Sec. 3 Employees' Right to Self Organization. Employees shall have the right to selforganization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own (Emphasis supplied).

This was not the consideration in the Adamson case because as mentioned earlier, the rank-and-file employees in the Adamson case were not under the supervision of the supervisors involved. Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor organization: right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act, supervisors shall not be given an occasion to bargain together with the rank-andfile against the interests of the employer regarding terms and conditions of work Second, the national union in the Adamson case did not actively represent its local chapters. In the present case, the local union is actively represented by the national

federation. In fact, it was the national federation, the KAMPIL-KATIPUNAN, which initially filed a petition for certification in behalf of the respondent union. Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company. The petitioner further contends that the term labor organization includes a federation considering that Art. 212 (g) mentions "any union or association of employees." The respondent, however, argues that the phrase refers to a local union only in which case, the prohibition in Art. 245 is inapplicable to the case at bar. The prohibition against a supervisors' union joining a local union of rank-and-file is replete with jurisprudence. The Court emphasizes that the limitation is not confined to a case of supervisors wanting to join a rank-and-file local 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. The intent of the law is clear especially where, as in the case at bar, the supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit. Technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. (Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should be paramount is the intent behind the law, not its literal construction. Where one interpretation would result in mischievous consequences while another would bring about equity, justice, and the promotion of labor peace, there can be no doubt as to what interpretation shall prevail. Finally, the respondent contends that the law prohibits the employer from interfering with the employees' right to self-organization. There is no question about this intendment of the law. There is, however, in the present case, no violation of such a guarantee to the employee. Supervisors are not prohibited from forming their own union. What the law prohibits is their membership in a labor organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national federation of rank-and-file employees that includes the very local union which they are not allowed to directly join. In a motion dated November 15, 1991 it appears that the petitioner has knuckled under to the respondents' pressures and agreed to let the national federation KAMPILKATIPUNAN represent its supervisors in negotiating a collective bargaining agreement. Against the advise of its own counsel and on the basis of alleged "industrial peace", the petitioner expressed a loss of interest in pursuing this action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its employees unilaterally

or through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy of the Department of Labor and Employment (DOLE) to remain on the basis of the petitioner's loss of interest. The December 14, 1990 order and the November 21, 1990 resolution of DOLE are contrary to law and must be declared as such. WHEREFORE, the petition is hereby GRANTED. The private respondent is disqualified from affiliating with a national federation of labor organizations which includes the petitioner's rank-and-file employees. SO ORDERED. Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.
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THIRD DIVISION G.R. No. 142000 January 22, 2003

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, respondent. CARPIO-MORALES, J.: Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998. On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment1 filed on November 27, 1997, opposed THEUs petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI.

THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed2 to its Comment to the petition for certification election. And it therein incorporated the following tabulation3 showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification: # of Signatures 13 6 2 53 14 6 3 1 4 16 2 Reasons for Disqualification Supervisors of THIGCI Resigned employees of THIGCI AWOL employees of THIGCI Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc. Supervisors of The Country Club at Tagaytay Highlands, Inc. Resigned employees of The Country Club at Tagaytay Highlands, Inc. Terminated employees of The Country Club at Tagaytay Highlands, Inc. AWOL employees of The Country Club at Tagaytay Highlands, Inc. Signatures that cannot be deciphered Names in list that were erased Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition.4Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,5 on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;6 and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. THEU thus concluded in its Reply7 that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election. By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim:

We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due course to this petition is therefore proper and appropriate.9 (Emphasis supplied) Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for certification election on the ground that there is a "clear absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda DimalipisBaldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 199810 setting aside the June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition;" that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed from the THEUs roster of membership; and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage. The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification election.

THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE Undersecretary by Resolution of December 29, 1998,11 it filed a petition for certiorari before this Court which, by Resolution of April 14, 1999,12 referred it to the Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,13 and in strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.14 By Decision of February 15, 2000,15 the Court of Appeals denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al.16 and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,17 petitioner failed to adduce substantial evidence to support its allegations. Hence, the present petition for certiorari, raising the following "ISSUES/ASSIGNMENT OF ERRORS: THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE"18 The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article 245 of the Labor Code, to wit: Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

While above-quoted Article 245 expressly prohibits supervisory employees from joining a rankand-file union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. Citing Toyota19 which held that "a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all," and the subsequent case of Progressive Development Corp. Pizza Hut v. Ledesma20 which held that: "The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor organization. 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. In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization,"21 (Underscoring and emphasis supplied), petitioner contends that, quoting Toyota, "[i]t becomes necessary . . ., anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code."22 Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary "conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election" which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in "the preelection conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, viz: x x x "Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization,

including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code." (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.) The petition fails. After 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 in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows: Art. 239. Grounds for cancellation of union registration. The following shall 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) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (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 subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; (e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by law;

(f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or accepting attorneys fees or negotiation fees from employers; (h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and (j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied), while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioners allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. Regarding the alleged withdrawal of union members from participating in the certification election, this Courts following ruling is instructive: "[T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification election itself wherein the workers can freely express their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer."23 As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions.

While petitioner submitted a list of its employees with their corresponding job titles and ranks,24 there is nothing mentioned about the supervisors respective duties, powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment.25 As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:26 Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the employees function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. (Emphasis supplied).27 WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual pre-election conference. SO ORDERED. Puno, Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.
----------------------G.R. No. 102084 August 12, 1998 DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE, petitioner, vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment; ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No. IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE SUPERVISORY UNION-FEDERATION OF FREE WORKERS, respondents.

MENDOZA, J.: Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical school at Dasmarias, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the other hand, is a labor organization composed of the supervisory employees of petitioner DLSUMCCM. On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election

among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification election were managerial employees and that the FFW-DLSUMCCMSUC was composed of both supervisory and rank1 and-file employees in the company. In its reply dated May 29, 1991, private respondent FFW-DLSUMCCMSUC denied petitioner's allegations. It contended that
2. Herein petition seeks for the holding of a certification election among the supervisory employees of herein respondent. It does not intend to include managerial employees. xxx xxx xxx 6. It is not true that supervisory employees are joining the rank-and-file employees' union. While it is true that both regular rank-and-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by 2 FFW.

On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the Department of Labor and Employment Regional Office No. IV, issued an order granting respondent union's petition for certification election. He said;
. . . [petitioner] . . . claims that based on the job descriptions which will be presented at the hearing, the covered employees who are considered managers occupy the positions of purchasing officers, personnel officers, property officers, cashiers, heads of various sections and the like. [Petitioner] also argues that assuming that some of the employees concerned are not managerial but mere supervisory employees, the Federation of Free Workers (FFW) cannot extend a charter certificate to this group of employees without violating the express provision of Article 245 which provides that "supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own" because the FFW had similarly issued a charter certificate to its rank-and-file employees. xxx xxx xxx In its position paper, [petitioner] stated that most, if not all, of the employees listed in . . . the petition are considered managerial employees, thereby admitting that it has supervisory employees who are undoubtedly qualified to join or form a labor organization of their own. The record likewise shows that [petitioner] promised to present the job descriptions of the concerned employees during the hearing but failed to do so. Thus, this office has no basis in determining at this point in time who among them are considered managerial or supervisory employees. At any rate, there is now no question that [petitioner] has in its employ supervisory employees who are qualified to join or form a labor union. Consequently, this office is left with no alternative but to order the holding of certification election pursuant to Article 257 of the Labor Code, as amended, which mandates the holding of certification election if a petition is filed by a legitimate labor organization involving an unorganized establishment, as in the case of herein respondent. As to the allegation of [petitioner] that the act of the supervisory employees in affiliating with FFW to whom the rankand-file employees are also affiliated is violative of Article 245 of the Labor Code, suffice it to state that the two groups are considered separate bargaining units and local chapters of FFW. They are, for all intents and purposes, separate with each other and their affiliation with FFW would not make them members of the same labor union. This must be the case because it is settled that the locals are considered the basic unit or principal with the labor federation assuming the role of an agent. The mere fact, therefore, that they are represented by or under the same agent is of no moment. 3 They are still considered separate with each other.

On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and Employment, citing substantially the same arguments it had raised before the med-arbiter. However, its appeal was dismissed. In his resolution, dated August 30, 1991, respondent Undersecretary of Labor and Employment Bienvenido E. Laguesma found the evidence presented by petitioner DLSUMCCM concerning the alleged managerial status of several employees to be insufficient. He also held that, 4 following the ruling of this Court in Adamson & Adamson, Inc. v. CIR, unions formed independently by supervisory and rank-and-file employees of a company may legally affiliate with the same national federation.

Petitioner moved for a reconsideration but its motion was denied. In his order dated September 19, 1991, respondent Laguesma stated:
We reviewed the records once more, and find that the issues and arguments adduced by movant have been squarely passed upon in the Resolution sought to be reconsidered. Accordingly, we find no legal justification to alter, much less set aside, the aforesaid resolution. Perforce, the motion for reconsideration must fail. WHEREFORE, the instant motion for reconsideration is hereby denied for lack of merit and the resolution of this office dated 30 August 1991 STANDS. No further motions of a similar nature shall hereinafter be entertained.
5

Hence, this petition for certiorari. Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his discretion. While it does not anymore insist that several of those who joined the petition for certification election are holding managerial positions in the company, petitioner nonetheless pursues the question whether unions formed independently by supervisory and rank-and-file employees of a company may validly affiliate with the same national federation. With respect to this question, it argues:
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED THE PETITIONER'S APPEAL AND ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG THE MEMBERS OF THE SUPERVISORY UNION EMPLOYED IN PETITIONER'S COMPANY DESPITE THE FACT THAT SAID SUPERVISORY UNION WAS AFFILIATED WITH THE FEDERATION OF FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF THE SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE LABOR 6 CODE, AS AMENDED.

The contention has no merit. Supervisory employees have the right to self-organization as do other classes of employees save only managerial ones. The Constitution states that "the right of the people, including those employed in the public and private sectors, to form unions, associations or societies for purposes not contrary to law, shall 7 8 not be abridged." As we recently held in United Pepsi-Cola Supervisory Union v. Loguesma, the framers of the Constitution intended, by this provision, to restore the right of supervisory employees to self-organization which had been withdrawn from them during the period of martial law. Thus:
Commissioner Lerum sought to amend the draft of what was later to become Art. 111, 8 of the present Constitution: xxx xxx xxx MR. LERUM. . . . Also, we have unions of supervisory employees and of security guards. But what is tragic about this is that after the 1973 Constitution was approved and in spite of an express recognition of the right to organize in P.D. No. 442, known as the Labor Code, the right of government workers, supervisory employees and security guards to form unions was abolished. xxx xxx xxx We are afraid that without any corresponding provision covering the private sector, the security guards, the supervisory employees . . . will still be excluded and that is the purpose of this amendment. xxx xxx xxx In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by including labor unions in the guarantee of organizational right should be taken in the context of statements that his aim was the removal of the statutory ban against security guards and supervisory employees joining labor organizations. The approval by the Constitutional

Commission of his proposal can only mean, therefore, that the Commission intended the absolute right to organize of 9 government workers, supervisory employees, and security guards to be constitutionally guaranteed.

Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right of supervisory employees to self-organization, subject to the limitation that they cannot join an organization of rank-and-file employees:
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the exercise of the right to self-organization is the difference in their interests. Supervisory employees are more closely identified with the employer than with the rank-and-file employees. If supervisory and rankand-file employees in a company are allowed to form a single union, the conflicting interests of these 10 groups impair their relationship and adversely affect discipline, collective bargaining and strikes. These consequences can obtain not only in cases where supervisory and rank-and-file employees in the same company belong to a single union but also where unions formed independently by supervisory and rankand-file employees of a company are allowed to affiliate with the same national federation. Consequently, 11 this Court has held in Atlas Lithographic Services Inc. v. Laguesma that
To avoid a situation where supervisors would merge with the rank-and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with a national federation of unions of rank-and-file employees where that federation actively participates in union activities in the company.

As we explained in that case, however, such a situation would obtain only where two conditions concur: 12 First, the rank-and-file employees are directly under the authority of supervisory employees. Second, 13 the national federation is actively involved in union activities in the company. Indeed, it is the presence of these two conditions which distinguished Atlas Lithographic Services, Inc. v. Laguesma from Adamson 14 & Adamson, Inc. v. CIR where a different conclusion was reached. The affiliation of two local unions in a company with the same national federation is not by itself a negation of their independence since in relation to the employer, the local unions are considered as the principals, while the federation is deemed to be merely their agent. This conclusion is in accord with the policy that any limitation on the exercise by employees of the right to self-organization guaranteed in the Constitution must be construed strictly. Workers should be allowed the practice of this freedom to the extent recognized in the fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton 15 Mills, Inc.:
The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of locals into the national union . . . was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, . . . and free also to renounce the affiliation for mutual welfare 16 upon the terms laid down in the agreement which brought it to existence.

The questions in this case, therefore, are whether the rank-and-file employees of petitioner DLSUMCCM who compose a labor union are directly under the supervisory employees whose own union is affiliated with the same national federation (Federation of Free Workers) and whether such national federation is actively involved in union activities in the company so as to make the two unions in the same company, in reality, just one union. Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees

composing the other union are directly under the authority of the supervisory employees. As held in 17 Adamson & Adamson, Inc. v. CIR, the fact that the two groups of workers are employed by the same company and the fact that they are affiliated with a common national federation are not sufficient to justify the conclusion that their organizations are actually just one. Their immediate professional relationship 18 must be established. To borrow the language of Adamson & Adamson, Inc. v. CIR:
We find without merit the contention of petitioner that if affiliation will be allowed, only one union will in fact represent both supervisors and rank-and-file employees of the petitioner; that there would be an indirect affiliation of supervisors and rank-and-file employees with one labor organization; that there would be a merging of the two bargaining units; 19 and that the respondent union will lose its independence because it becomes an alter ego of the federation.

Mention has already been made of the fact that the petition for certification election in this case was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the supervisors who compose the local union have direct authority over the rankand-file employees composing the other local union which is also affiliated with the FFW. This fact 20 differentiates the case from Atlas Lithographic Services. Inc. v. Laguesma, in which, in addition to the fact that the petition for certification election had been filed by the national federation, it was shown that the rank-and-file employees were directly under the supervisors organized by the same federation. It follows that respondent labor officials did not gravely abuse their discretion. WHEREFORE, the petition is DISMISSED. SO ORDERED. Regalado, Melo and Martinez, JJ., concur.

---------------

Republic Act No. 9481 AN ACT STRENGTHENING THE WORKERS' CONSTITUTIONAL RIGHT TO SELFORGANIZATION, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further amended to read as follows: "ART. 234. Requirements of Registration. - 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." SEC. 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows: "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." SEC. 3. Article 238 of the Labor Code is hereby amended to read as follows: "ART. 238. Cancellation of Registration. - 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."

SEC. 4. A new provision is hereby inserted into the Labor Code as Article 238-A t o read as follows: "ART. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts." SEC. 5. Article 239 of the Labor Code is amended to read as follows: "ART. 239. Grounds for Cancellation of Union Registration. - 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." SEC. 6. A new provision, Article 239-A is inserted into the Labor Code to read as follows: "ART. 239-A. Voluntary Cancellation of Registration. - 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." SEC. 7. A new provision, Article 242-A is hereby inserted into the Labor Code to read as follows: "ART. 242-A. Reportorial Requirements. - 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-lam 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." SEC. 8. Article 245 of the Labor Code is hereby amended to read as follows: "ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right of Supervisory Employees. - Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank and file union and the supervisors' union operating within the same establishment may join the same federation or national union." SEC. 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows: "ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union." SEC. 10. Article 256 of the Labor Code is hereby amended to read as follows: "ART. 256. Representation Issue in Organized Establishments. - In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed by any legitimate labor organization including a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election or a local chapter which has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twentyfive percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided, That the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. In cases where the petition was filed by a national union or

federation, it shall not be required to disclose the names of the local chapter's officers and members. At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed." SEC. 11. Article 257 of the Labor Code is hereby amended to read as follows: "ART. 257. Petitions in Unorganized Establishments. - In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor organization, including a national union or federation which has already issued a charter certificate to its 1ocal/chapter participating in the certification election or a local/chapter which has been issued a charter certificate by the national union or federation. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members." SEC. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to read as follows: "ART. 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer's participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition."