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Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 157086 February 18, 2013

LEPANTO CONSOLIDATED MINING COMPANY, Petitioner,


vs.
THE LEPANTO CAPATAZ UNION, Respondent.

DECISION

BERSAMIN, J.:

Capatazes are not rank-and-file employees because they perform supervisory functions for the management; hence,
they may form their own union that is separate and distinct from the labor organization of rank-and-file employees.

The Case-

Lepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on December 18, 2002,1whereby
the Court of Appeals (CA) dismissed its petition for certiorari on the ground of its failure to first file a motion for
reconsideration against the decision rendered by the Secretary of the Department of Labor and Employment (DOLE);
and the resolution promulgated on January 31, 2003,2 whereby the CA denied Lepanto's motion for reconsideration.

Antecedents

As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several mining claims in
Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union (Union), a labor organization duly registered
with DOLE, filed a petition for consent election with the Industrial Relations Division of the Cordillera Regional Office
(CAR) of DOLE, thereby proposing to represent 139 capatazes of Lepanto.3

In due course, Lepanto opposed the petition,4 contending that the Union was in reality seeking a certification election,
not a consent election, and would be thereby competing with the Lepanto Employees Union (LEU), the current collective
bargaining agent. Lepanto pointed out that the capatazes were already members of LEU, the exclusive representative of
all rank-and-file employees of its Mine Division.

On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that the capatazes could
form a separate bargaining unit due to their not being rank-and-file employees,5 viz:

xxxx

We agree with petitioner that its members perform a function totally different from the rank-and-file employees. The
word capataz is defined in Webster’s Third International Dictionary, 1986 as "a boss", "foreman" and "an overseer". The
employer did not dispute during the hearing that the capatazes indeed take charge of the implementation of the job
orders by supervising and instructing the miners, mackers and other rank-and-file workers under them, assess and
evaluate their performance, make regular reports and recommends (sic) new systems and procedure of work, as well
as guidelines for the discipline of employees. As testified to by petitioner’s president, the capatazes are neither rank-
and-file nor supervisory and, more or less, fall in the middle of their rank. In this respect, we can see that indeed the
capatazes differ from the rank-and-file and can by themselves constitute a separate bargaining unit.
While it is claimed by the employer that historically, the capatazes have been considered among the rank-and-file and
that it is only now that they seek a separate bargaining unit such history of affiliation with the rank-and-file association
of LEU cannot totally prevent the capatazes from disaffiliating and organizing themselves separately. The constitutional
right of every worker to self-organization essentially gives him the freedom to join or not to join an organization of his
own choosing.

The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-file employees represented by
the LEU renders the contract bar rule inapplicable. While the collective bargaining agreement existing between the LEU
and the employer covering the latter’s rank-andfile employee covers likewise the capatazes, it was testified to and
undisputed by the employer that the capatazes did not anymore participate in the renegotiation and ratification of the
new CBA upon expiration of their old one on 16 November 1998. Their nonparticipation was apparently due to their
formation of the new bargaining unit. Thus, while the instant petition was filed on 27 May 1998, prior to the freedom
period, in the interest of justice and in consonance with the constitutional right of workers to self-organization, the
petition can be deemed to have been filed at the time the 60-day freedom period set in. After all, the petition was still
pending and unresolved during this period.

WHEREFORE, the petition is hereby granted and a certification election among the capataz employees of the Lepanto
Consolidated Mining Company is hereby ordered conducted, subject to the usual preelection and inclusion/exclusion
proceedings, with the following choices:

1.Lepanto Capataz Union; and

2.No Union.

The employer is directed to submit to this office within ten (10) days from receipt hereof a copy of the certified list of its
capataz employees and the payroll covering the said bargaining unit for the last three (3) months prior to the issuance
hereof.

SO DECIDED. 6

Lepanto appealed to the DOLE Secretary.7

On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis- Baldoz (Baldoz), acting by authority of the DOLE
Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently stating as follows:

xxxx

The bargaining unit sought to be represented by the appellee are the capataz employees of the appellant. There is no
other labor organization of capatazes within the employer unit except herein appellant. Thus, appellant is an
unorganized establishment in so far as the bargaining unit of capatazes is concerned. In accordance with the last
paragraph of Section 11, Rule XI, Department Order No. 9 which provides that "in a petition filed by a legitimate labor
organization involving an unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code,
automatically order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal thereof exists", the
order for the conduct of a certification election is proper.

Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when she directed the conduct of a
certification election when appellee prays for the conduct of a consent election, let it be stressed that appellee seeks to
be recognized as the sole and exclusive bargaining representative of all capataz employees of appellant. There are two
modes by which this can be achieved, one is by voluntary recognition and two, by consent or certification election.
Voluntary recognition under Rule X, Department Order No. 9 is a mode whereby the employer voluntarily recognizes the
union as the bargaining representative of all the members in the bargaining unit sought to be represented. Consent and
certification election under Rules XI and XII of Department Order No. 9 is a mode whereby the members of the
bargaining unit decide whether they want a bargaining representative and if so, who they want it to be. The difference
between a consent election and a certification election is that the conduct of a consent election is agreed upon by the
parties to the petition while the conduct of a certification election is ordered by the Med-Arbiter. In this case, the
appellant withdrew its consent and opposed the conduct of the election. Therefore, the petition necessarily becomes
one of a petition for certification election and the Med-Arbiter was correct in granting the same.9

xxxx

In the ensuing certification election held on November 28, 2000, the Union garnered 109 of the 111 total valid votes
cast.10

On the day of the certification election, however, Lepanto presented an opposition/protest.11 Hence, on February 8,
2001, a hearing was held on Lepanto’s opposition/protest. Although the parties were required in that hearing to submit
their respective position papers, Lepanto later opted not to submit its position paper,12 and contended that the issues
identified during the hearing did not pose any legal issue to be addressed in a position paper.13

On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision certifying the Union as
the sole and exclusive bargaining agent of all capatazes of Lepanto.14

On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE Secretary.

By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas affirmed the decision dated April
26, 2001, holding and disposing thus:

Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction based on her failure
to resolve appellant’s motion to modify order to submit position papers and on rendering judgment on the basis only of
appellee’s position paper.

We deny.

Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing Book V of the Labor
Code, states that "in all proceedings at all levels, incidental motions shall not be given due course, but shall remain as
part of the records for whatever they may be worth when the case is decided on the merits".

Further, the motion to modify order to submit position papers filed by appellant is without merit. Appellant claimed that
the issues over which Med-Arbiter Ulep directed the submission of position papers were: (1) failure to challenge
properly; (2) failure (especially of LEU) to participate actively in the proceedings before the decision calling for the
conduct of certification election; and (3) validity of earlier arguments. According to appellant, the first issue was for
appellee LCU to reply to in its position paper, the second issue was for the LEU and the third issue for appellant company
to explain in their respective position paper. It was the position of appellant company that unless the parties filed their
position paper on each of their respective issues, the other parties cannot discuss the issues they did not raise in the
same position papers and have to await receipt of the others’ position paper for their appropriate reply.

Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of protests on the
conduct of election, states that "the Med-Arbiter shall in the same hearing direct all concerned parties, including the
employer, to simultaneously submit their respective position papers within a non-extendible period of ten days". The
issues as recorded in the minutes of 28 February 2001 hearing before the Med- Arbiter are clear. The parties, including
appellant company were required to submit their respective positions on whether there was proper challenge of the
voters, whether LEU failed to participate in the proceedings, if so, whether it should be allowed to participate at this
belated stage and whether the arguments raised during the pre-election conferences and in the protests are valid. The
parties, including appellant company were apprised of these issues and they agreed thereto. The minutes of the hearing
even contained the statement that "no order will issue" and that "the parties are informed accordingly". If there is any
matter that had to be clarified, appellant should have clarified the same during the said hearing and refused to file its
position paper simultaneously with LCU and LEU. It appears that appellant did not do so and acquiesced to the filing of
its position paper within fifteen days from the date of said hearing.

Neither is there merit in appellant’s contention that the Med- Arbiter resolved the protest based solely on appellee
LCU’s position paper. Not only did the Med-Arbiter discuss the demerits of appellant’s motion to modify order to submit
position papers but likewise the demerits of its protest. We do not, however, agree with the Med-Arbiter that the
protest should be dismissed due to appellant’s failure to challenge the individual voters during the election. We take
note of the minutes of the pre-election conference on 10 November 2000, thus:

"It was also agreed upon (by union and management’s legal officer) that all those listed will be allowed to vote during
the certification election subject to challenge by management on ground that none of them belongs to the bargaining
unit". (Underscoring supplied)

It is therefore, not correct to say that there was no proper challenge made by appellant company. The challenge was
already manifested during the pre-election conference, specifying that all listed voters were being challenged because
they do not belong to the bargaining unit of capatazes. Likewise, the formal protest filed by appellant company on the
day of the election showed its protest to the conduct of the election on the grounds that (1) none of the names
submitted and included (with pay bracket 8 and 9) to vote qualifies as capataz under the five-point characterization
made in 02 May 2000 decision calling for the conduct of certification election; (2) the characterization made in the 02
May 2000 decision pertains to shift bosses who constitutes another union, the Lepanto Local Staff Union; and (3) the
names listed in the voters’ list are members of another union, the Lepanto Employees Union. This constitutes proper
challenge to the eligibility of all the voters named in the list which includes all those who cast their votes. The election
officer should have not canvassed the ballots and allowed the Med-Arbiter to first determine their eligibility.

Notwithstanding the premature canvass of the votes, we note that appellant company failed to support its grounds for
challenge with sufficient evidence for us to determine the validity of its claim. No job description of the challenged
voters was submitted by appellant from which we can verify whether the said voters are indeed disqualified from the
alleged five-point characterization made in the 02 May 2000 decision, either before the Med-Arbiter or on appeal.
Neither was the job description of the shift bosses whom appellant company claims pertain to the alleged five-point
characterization submitted for our perusal. The challenge must perforce fail for lack of evidence.

As to the alleged membership of appellee LCU’s member with another union LEU, the issue has been resolved in the 02
May 200[0] decision of Med-Arbiter Lontoc which we affirmed on 12 July 2000.

WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-Arbiter dated 26 April 2001,
certifying Lepanto Capataz Union as the sole and exclusive bargaining agent of all capataz workers of Lepanto
Consolidated Mining Company, is AFFIRMED.

SO RESOLVED.16

Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for reconsideration, Lepanto challenged in the CA the
foregoing decision of the DOLE Secretary through a petition for certiorari.

On December 18, 2002, the CA dismissed Lepanto’s petition for certiorari, stating in its first assailed resolution:

Considering that the petitioner failed to file a prior motion for reconsideration of the Decision of the public respondent
before instituting the present petition as mandated by Section 1 of Rule 65 of the 1997 Rules of Civil Procedure, as
amended, the instant "Petition for Certiorari Under Rule 65 with Prayer for Temporary Restraining Order and Injunction"
is hereby DISMISSED.

Well-settled is the rule that the "filing of a petition for certiorari under Rule 65 without first moving for reconsideration
of the assailed resolution generally warrants the petition’s outright dismissal. As we consistently held in numerous cases,
a motion for reconsideration by a concerned party is indispensable for it affords the NLRC an opportunity to rectify errors
or mistakes it might have committed before resort to the courts can be had.

It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law against acts of public respondents. Here, the plain and adequate remedy expressly provided by
law was a motion for reconsideration of the impugned resolution, based on palpable or patent errors, to be made under
oath and filed within ten (10) days from receipt of the questioned resolution of the NLRC, a procedure which is
jurisdictional. Further, it should be stressed that without a motion for reconsideration seasonably filed within the ten-day
reglementary period, the questioned order, resolution or decision of NLRC, becomes final and executory after ten (10)
calendar days from receipt thereof." (Association of Trade Unions (ATU), Rodolfo Monteclaro and Edgar Juesan vs.
Hon. Commissioners Oscar N. Abella, Musib N. Buat, Leon Gonzaga, Jr., Algon Engineering Construction Corp., Alex
Gonzales and Editha Yap. 323 SCRA 50).

SO ORDERED.17

Lepanto moved to reconsider the dismissal, but the CA denied its motion for reconsideration through the second
assailed resolution.18

Issues

Hence, this appeal by Lepanto based on the following errors, namely:

THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR CERTIORARI ON THE GROUND THAT NO
PRIOR MOTION FOR RECONSIDERATION WAS FILED. THE DECISION OF THE SECRETARY BEING FINAL AND EXECUTORY, A
MOTION FOR RECONSIDERATION WAS NOT AN AVAILABLE REMEDY FOR PETITIONER.

II

ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF JURISDICTION, [O]R WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUNG THE DECISION DATED SEPTEMBER 17,
2002, WHEN SHE DELIBERATELY IGNORED THE FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION, DESPITE HER
OWN FINDING THAT THERE HAD BEEN A PREMATURE CANVASS OF VOTES. 19

Lepanto argues that a motion for reconsideration was not an available remedy due to the decision of the DOLE Secretary
being already classified as final and executory under Section 15, Rule XI, Book V of Omnibus Rules Implementing the
Labor Code, as amended by Department Order No. 9, series of 1997;20 that the Union’s petition for consent election was
really a certification election; that the Union failed to give a definite description of the bargaining unit sought to be
represented; and that the capatazes should be considered as rank-and-file employees.

The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-requisite in the filing of its petition
for certiorari; and, secondly, whether the capatazes could form their own union independently of the rank-and-file
employees.

Ruling

The petition for review has no merit.

I.

The filing of the motion for reconsideration is a pre-requisite to the filing of a petition for certiorari to assail the
decision of the DOLE Secretary

We hold to be untenable and not well taken Lepanto’s submissions that: (1) a motion for reconsideration was not an
available remedy from the decision of the DOLE Secretary because of Section 15, Rule XI, Book V of the Omnibus Rules
Implementing the Labor Code, as amended; and (2) the ruling in National Federation of Labor v. Laguesma21(recognizing
the remedy of certiorari against the decision of the DOLE Secretary to be filed initially in the CA) actually affirms its
position that an immediate recourse to the CA on certiorari is proper even without the prior filing of a motion for
reconsideration.

To start with, the requirement of the timely filing of a motion for reconsideration as a precondition to the filing of a
petition for certiorari accords with the principle of exhausting administrative remedies as a means to afford every
opportunity to the respondent agency to resolve the matter and correct itself if need be.22

And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin’s Funeral Home v. National
Labor Relations Commission,23 where the Court has pronounced that the special civil action of certiorari is the
appropriate remedy from the decision of the National Labor Relations Commission (NLRC) in view of the lack of any
appellate remedy provided by the Labor Code to a party aggrieved by the decision of the NLRC. Accordingly, any
decision, resolution or ruling of the DOLE Secretary from which the Labor Code affords no remedy to the aggrieved party
may be reviewed through a petition for certiorari initiated only in the CA in deference to the principle of the hierarchy of
courts.

Yet, it is also significant to note that National Federation of Labor v. Laguesma also reaffirmed the dictum issued in St.
Martin’s Funeral Homes v. National Labor Relations Commission to the effect that "the remedy of the aggrieved party is
to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then seasonably
avail of the special civil action of certiorari under Rule 65 x x x."24

Indeed, the Court has consistently stressed the importance of the seasonable filing of a motion for reconsideration prior
to filing the certiorari petition. In SMC Quarry 2 Workers Union-February Six Movement (FSM) Local Chapter No. 1564 v.
Titan Megabags Industrial Corporation25 and Manila Pearl Corporation v. Manila Pearl Independent Workers Union,26 the
Court has even warned that a failure to file the motion for reconsideration would be fatal to the cause of the
petitioner.27 Due to its extraordinary nature as a remedy, certiorari is to be availed of only when there is no appeal, or
any plain, speedy or adequate remedy in the ordinary course of law.28 There is no question that a motion for
reconsideration timely filed by Lepanto was an adequate remedy in the ordinary course of law in view of the possibility
of the Secretary of Justice reconsidering her disposition of the matter, thereby according the relief Lepanto was
seeking.1âwphi1
Under the circumstances, Lepanto’s failure to timely file a motion for reconsideration prior to filing its petition
for certiorari in the CA rendered the September 17, 2002 resolution of the DOLE Secretary beyond challenge.

II.

Capatazes are not rank-and-file employees; hence, they could form their own union

Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on May 2, 2000 that
the capatazes were performing functions totally different from those performed by the rank-and-file employees, and
that the capatazes were "supervising and instructing the miners, mackers and other rank-and-file workers under them,
assess[ing] and evaluat[ing] their performance, mak[ing] regular reports and recommend[ing] new systems and
procedure of work, as well as guidelines for the discipline of employees."29 Hence, Med-Arbiter Lontoc concluded,
the capatazes "differ[ed] from the rank-and-file and [could] by themselves constitute a separate bargaining unit."30

Agreeing with Med-Arbiter Lontoc’s findings, then DOLE Undersecretary Baldoz, acting by authority of the DOLE
Secretary, observed in the resolution dated July 12, 2000, thus:31

The bargaining unit sought to be represented by the appellee are the capataz employees of the appellant. There is no
other labor organization of capatazes within the employer unit except herein appellant. Thus, appellant is an
unorganized establishment in so far as the bargaining unit of capatazes is concerned. In accordance with the last
paragraph of Section 11, Rule XI, Department Order No. 9 which provides that "in a petition filed by a legitimate labor
organization involving an unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code,
automatically order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal thereof exists", the
order for the conduct of a certification election is proper.32

We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in the DOLE, an office
that was undeniably possessed of the requisite expertise on the matter in issue. In dealing with the matter, her
subordinates in the DOLE fairly and objectively resolved whether the Union could lawfully seek to be the exclusive
representative of the bargaining unit of capatazes in the company. Their factual findings, being supported by substantial
evidence, are hereby accorded great respect and finality. Such findings cannot be made the subject of our judicial review
by petition under Rule 45 of the Rules of Court, because:

x x x [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 field.
Judicial review of labor cases does not go 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 review
or revision of errors of law and not to a second analysis of the evidence. Here, petitioners would have us re-calibrate all
over again the factual basis and the probative value of the pieces of evidence submitted by the Company to the DOLE,
contrary to the provisions of Rule 45. 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 may be amply demonstrated, we may not
disturb such factual findings.33

In any event, we affirm that capatazes or foremen are not rank-andfile employees because they are an extension of the
management, and as such they may influence the rank-and-file workers under them to engage in slowdowns or similar
activities detrimental to the policies, interests or business objectives of the employers.34
WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the resolutions the Court of
Appeals promulgated on December 18, 2002 and January 31, 2003.

Petitioner to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO


Chief Justice

TERESITA J. LEONARDO-DE CASTRO MARTIN S. VILLARAMA, JR.


Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO


Chief Justice
Republic of the Philippines
SUPREME COURT
Baguio City

THIRD DIVISION

G.R. No. 193756 April 10, 2013

VENANCIO S. REYES, EDGARDO C. DABBAY, WALTER A. VIGILIA, NEMECIO M. CALANNO, ROGELIO A. SUPE, JR.,
ROLAND R. TRINIDAD, and AURELIO A. DULDULAO, Petitioners,
vs.
RP GUARDIANS SECURITY AGENCY, INC., Respondent.

DECISION

MENDOZA, J.:

Before the Court is a petition for review under Rule 45 of the Rules of Court, assailing the May 18, 2010 Amended
Decision1 and the September 13, 2010 Resolution2 of the Court of Appeals (CA), in C.A.-GR. SP No. 106643, which
modified the April 9, 2008 Decision3 of the National Labor Relations Commission (NLRC) in NLRC LAC Case No. 11-
002990-07, insofar as the award of backwages, the computation of separation pay, and the refund for the trust fund
contributions are concerned.

The Facts:

Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M. Calanno, Rogelio A. Supe, Jr., Roland R.
Trinidad, and Aurelio A. Duldulao (petitioners) were hired by respondent RP Guardians Security Agency, Inc.
(respondent) as security guards. They were deployed to various clients of respondent, the last of which were the
different branches of Banco Filipino Savings and Mortgage Bank (Banco Filipino).

In September 2006, respondent’s security contract with Banco Filipino was terminated. In separate letters,4petitioners
were individually informed of the termination of the security contract with Banco de Oro. In two (2) memoranda, dated
September 21, 20065 and September 29, 2006,6 petitioners were directed to turnover their duties and responsibilities to
the incoming security agency and were advised that they would be placed on floating status while waiting for available
post. Petitioners waited for their next assignment, but several months lapsed and they were not given new assignments.

Consequently, on April 10, 2007, petitioners filed a complaint7 for constructive dismissal.

In its position paper,8 respondent claimed that there was no dismissal, of petitioners, constructive or otherwise, and
asserted that their termination was due to the expiration of the service contract which was coterminus with their
contract of employment.

On August 20, 2007, the Labor Arbiter (LA) rendered a decision9 in favor of petitioners ordering respondent to pay
petitioners separation pay, backwages, refund of trust fund, moral and exemplary damages, and attorneys fees.

Aggrieved, respondent appealed to the NLRC.

On April 9, 2008, the NLRC promulgated its decision10 sustaining the finding of constructive dismissal by the LA, and the
awards she made in the decision. The award of moral and exemplary damages, however, were deleted.
Upon denial of its motion for reconsideration,11 respondent filed a petition for certiorari before the CA.

On February 26, 2010, the CA rendered a decision12 dismissing the petition and affirming the assailed NLRC decision and
resolution.

On motion for reconsideration, the CA issued the Amended Decision13 dated May 18, 2010, modifying its earlier
decision. Citing Section 6.5 (4) of Department Order No. 14 of the Department of Labor and Employment (DOLE D.O. No.
14), otherwise known as Guidelines Governing the Employment and Working Conditions of Security Guards and Similar
Personnel in the Private Security Industry, the CA reduced the computation of the separation pay from one month pay
per year of service to one-half month pay for every year of service; reduced the refund of trust fund contribution from
Sixty (₱60.00) Pesos to Thirty (₱30.00)Pesos; and deleted the award of backwages and attorney’s fees.

Hence, this petition anchored on the following:

GROUNDS FOR THE PETITION

8.0 The Court of Appeals has decided a question of substance in a way that is not in accord with law and with applicable
decisions of the Supreme Court concerning the Petitioner’s basic right to fair play, justice and due process, with more
reason that a conclusion of law cannot be made in the motion for reconsideration.

8.1 The first decision promulgated by the Court of Appeals on February 26, 2010 affirming the decision of the NLRC
awarding both backwages and separation pay of one month pay for every year of service can only be set aside upon
proof of grave abuse of discretion, fraud or error of law.

8.2 Petitioners are entitled to backwages for the period covered from the time the Labor Arbiter rendered the decision
in their favor on August 20, 2007 until said decision was reversed by the Court of Appeals in its Amended Decision
promulgated on May 18, 2010.14

There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and the CA were one in their
conclusion that respondent was guilty of illegal dismissal when it placed petitioners on floating status beyond the
reasonable six-month period after the termination of their service contract with Banco de Oro. Temporary displacement
or temporary off-detail of security guard is, generally, allowed in a situation where a security agency’s client decided not
to renew their service contract with the agency and no post is available for the relieved security guard.15 Such situation
does not normally result in a constructive dismissal. Nonetheless, when the floating status lasts for more than six (6)
months, the employee may be considered to have been constructively dismissed.16 No less than the
Constitution17 guarantees the right of workers to security of tenure, thus, employees can only be dismissed for just or
authorized causes and after they have been afforded the due process of law.18

Settled is the rule that that an employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld up to the time of actual
reinstatement.19 If reinstatement is not possible, however, the award of separation pay is proper.20

Backwages and reinstatement are separate and distinct reliefs given to an illegally dismissed employee in order to
alleviate the economic damage brought about by the employee’s dismissal.21 "Reinstatement is a restoration to a state
from which one has been removed or separated" while "the payment of backwages is a form of relief that restores the
income that was lost by reason of the unlawful dismissal." Therefore, the award of one does not bar the other.22

In the case of Aliling v. Feliciano,23 citing Golden Ace Builders v. Talde,24 the Court explained:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided
are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year
of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.
[Emphasis Supplied]

Furthermore, the entitlement of the dismissed employee to separation pay of one month for every year of service
should not be confused with Section 6.5 (4) of DOLE D.O. No. 14 which grants a separation pay of one-half month for
every year service, to wit:

6.5 Other Mandatory Benefits. In appropriate cases, security guards/similar personnel are entitled to the mandatory
benefits as listed below, although the same may not be included in the monthly cost distribution in the contracts, except
the required premiums for their coverage:

a. Maternity benefit as provided under the SSS Law;

b. Separation pay if the termination of employment is for authorized cause as provided by law and as enumerated
below:

Half-Month Pay Per Year of Service, but in no case less than One Month Pay, if separation is due to:

1. Retrenchment or reduction of personnel effected by management to prevent serious losses;

2. Closure or cessation of operation of an establishment not due to serious losses or financial reverses;

3. Illness or disease not curable within a period of 6 months and continued employment is prohibited by law or
prejudicial to the employee's health or that of co-employees; or

4. Lack of service assignment for a continuous period of 6 months.The said provision contemplates a situation where a
security guard is removed for authorized causes such as when the security agency experiences a surplus of security
guards brought about by lack of clients. In such a case, the security agency has the option to resort to retrenchment
upon compliance with the procedural requirements of "two-notice rule" set forth in the Labor Code and to pay
separation pay of one-half month for every year of service.

In this case, respondent would have been liable for reinstatement and payment of backwages. Reinstatement, however,
was no longer feasible because, as found by the LA, respondent had already ceased operation of its business.25 Thus,
backwages and separation pay, in the amount of one month for every year of service, should be paid in lieu of
reinstatement.

As to their claim of attorney's fees, petitioners were compelled to file an action for the recovery of their lawful wages
and other benefits and, in the process, incurred expenses. Hence, petitioners are entitled to attorney's fees equivalent
to ten percent (10%) of the monetary award.26

Finally, as to the refund of the trust fund contribution, a perusal of the records shows that the amount deducted for the
trust fund contribution from each petitioner varies. Some petitioners were deducted the amount of ₱15.00 every
payday while others were deducted ₱30.00 every payday. Thus, the Court deems it proper to refer the computation of
the same to the LA.

WHEREFORE, the pet1t10n is GRANTED. The May 18, 2010 Amended Decision and the September 13, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 106643 are REVERSED and SET ASIDE. The April 9, 2008 Decision of the National
Labor Relations Commission, modifying the August 20, 2007 Decision of the Labor Arbiter, is REINSTATED.

The case is REMANDED to the Labor Arbiter for further proceedings to make a detailed computation of the exact
amount of monetary benefits due petitioners.

SO ORDERED.

JOSE CATRAL MENDOZA


Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.


Associate Justice
Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD


Associate Justice Associate Justice

MARVIC MARIO VICTOR F. LEONEN


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.

PRESBITERO J. VELASCO, JR.


Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.

MARIA LOURDES P. A. SERENO


Chief Justice
Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION

THE HERITAGE HOTEL MANILA, acting through its G.R. No. 178296
owner, GRAND PLAZA HOTEL CORPORATION,

Petitioner,
Present:

- versus -
CARPIO, J.,

Chairperson,
NATIONAL UNION OF WORKERS IN THE HOTEL,
RESTAURANT AND ALLIED INDUSTRIES-HERITAGE NACHURA,
HOTEL MANILA SUPERVISORS CHAPTER LEONARDO-DE CASTRO,*
(NUWHRAIN-HHMSC),
ABAD, and
Respondent.
MENDOZA, JJ.

Promulgated:

January 12, 2011

x----------------------------------------------------------------------------------x

DECISION

NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) dated May 30, 2005
and Resolution dated June 4, 2007. The assailed Decision affirmed the dismissal of a petition for cancellation of union
registration filed by petitioner, Grand Plaza Hotel Corporation, owner of Heritage Hotel Manila, against
respondent, National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC), a labor organization of the supervisory employees of Heritage Hotel Manila.

The case stemmed from the following antecedents:

On October 11, 1995, respondent filed with the Department of Labor and Employment-National Capital Region (DOLE-
NCR) a petition for certification election.[2] The Med-Arbiter granted the petition on February 14, 1996 and ordered the
holding of a certification election.[3] On appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the
Med-Arbiters order and remanded the case to the Med-Arbiter for the holding of a preelection conference on February
26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September 23, 1996.

The preelection conference was not held as initially scheduled; it was held a year later, or on February 20, 1998.
Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The latter
agreed to suspend proceedings until further notice. The preelection conference resumed on January 29, 2000.

Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its
annual financial report for several years and the list of its members since it filed its registration papers in 1995.
Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of respondent, on the ground
of the non-submission of the said documents. Petitioner prayed that respondents Certificate of Creation of
Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further requested
the suspension of the certification election proceedings.[4]

On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the [Certification Election]
Proceedings,[5] arguing that the dismissal or suspension of the proceedings is warranted, considering that the legitimacy
of respondent is seriously being challenged in the petition for cancellation of registration. Petitioner maintained that the
resolution of the issue of whether respondent is a legitimate labor organization is crucial to the issue of whether it may
exercise rights of a legitimate labor organization, which include the right to be certified as the bargaining agent of the
covered employees.

Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the winner.[6]

On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner,[7] stating
that the certification election held on June 23, 2000 was an exercise in futility because, once respondents registration is
cancelled, it would no longer be entitled to be certified as the exclusive bargaining agent of the supervisory employees.
Petitioner also claimed that some of respondents members were not qualified to join the union because they were
either confidential employees or managerial employees. It then prayed that the certification of the election results and
winner be deferred until the petition for cancellation shall have been resolved, and that respondents members who held
confidential or managerial positions be excluded from the supervisors bargaining unit.

Meanwhile, respondent filed its Answer[8] to the petition for the cancellation of its registration. It averred that the
petition was filed primarily to delay the conduct of the certification election, the respondents certification as the
exclusive bargaining representative of the supervisory employees, and the commencement of bargaining negotiations.
Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is estopped from
questioning respondents status as a legitimate labor organization as it had already recognized respondent as such during
the preelection conferences; (b) petitioner is not the party-in-interest, as the union members are the ones who would
be disadvantaged by the non-submission of financial reports; (c) it has already complied with the reportorial
requirements, having submitted its financial statements for 1996, 1997, 1998, and 1999, its updated list of officers, and
its list of members for the years 1995, 1996, 1997, 1998, and 1999; (d) the petition is already moot and academic,
considering that the certification election had already been held, and the members had manifested their will to be
represented by respondent.

Citing National Union of Bank Employees v. Minister of Labor, et al.[9] and Samahan ng Manggagawa sa Pacific Plastic v.
Hon. Laguesma,[10] the Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar to
the holding of a certification election. Thus, in an Order[11] dated January 26, 2001, the Med-Arbiter dismissed
petitioners protest, and certified respondent as the sole and exclusive bargaining agent of all supervisory employees.

Petitioner subsequently appealed the said Order to the DOLE Secretary.[12] The appeal was later dismissed by DOLE
Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of August 21, 2002.[13] Petitioner moved
for reconsideration, but the motion was also denied.[14]

In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved the petition
for cancellation of registration. While finding that respondent had indeed failed to file financial reports and the list of its
members for several years, he, nonetheless, denied the petition, ratiocinating that freedom of association and the
employees right to self-organization are more substantive considerations. He took into account the fact that respondent
won the certification election and that it had already been certified as the exclusive bargaining agent of the supervisory
employees. In view of the foregoing, Regional Director Maraanwhile emphasizing that the non-compliance with the law
is not viewed with favorconsidered the belated submission of the annual financial reports and the list of members as
sufficient compliance thereof and considered them as having been submitted on time. The dispositive portion of the
decision[15] dated December 29, 2001 reads:

WHEREFORE, premises considered, the instant petition to delist the National Union of Workers in the Hotel, Restaurant
and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor organizations is
hereby DENIED.
SO ORDERED.[16]

Aggrieved, petitioner appealed the decision to the BLR.[17] BLR Director Hans Leo Cacdac inhibited himself from the case
because he had been a former counsel of respondent.

In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance of the appeal. In a resolution[18] dated
February 21, 2003, she dismissed the appeal, holding that the constitutionally guaranteed freedom of association and
right of workers to self-organization outweighed respondents noncompliance with the statutory requirements to
maintain its status as a legitimate labor organization.

Petitioner filed a motion for reconsideration,[19] but the motion was likewise denied in a resolution[20] dated May 30,
2003. DOLE Secretary Sto. Tomas admitted that it was the BLR which had jurisdiction over the appeal, but she pointed
out that the BLR Director had voluntarily inhibited himself from the case because he used to appear as counsel for
respondent. In order to maintain the integrity of the decision and of the BLR, she therefore accepted the motion to
inhibit and took cognizance of the appeal.

Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE Secretary acted with grave
abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition for cancellation of
respondents registration.

In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE Secretary may legally
assume jurisdiction over an appeal from the decision of the Regional Director in the event that the Director of the BLR
inhibits himself from the case. According to the CA, in the absence of the BLR Director, there is no person more
competent to resolve the appeal than the DOLE Secretary. The CA brushed aside the allegation of bias and partiality on
the part of the DOLE Secretary, considering that such allegation was not supported by any evidence.

The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed the dismissal of
the petition for cancellation of respondents registration as a labor organization. Echoing the DOLE Secretary, the CA held
that the requirements of registration of labor organizations are an exercise of the overriding police power of the State,
designed for the protection of workers against potential abuse by the union that recruits them. These requirements, the
CA opined, should not be exploited to work against the workers constitutionally protected right to self-organization.

Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott Labs. Phils., Inc. v. Abbott Labs.
Employees Union,[21] which categorically declared that the DOLE Secretary has no authority to review the decision of the
Regional Director in a petition for cancellation of union registration, and Section 4,[22] Rule VIII, Book V of the Omnibus
Rules Implementing the Labor Code.

In its Resolution[23] dated June 4, 2007, the CA denied petitioners motion, stating that the BLR Directors inhibition from
the case was a peculiarity not present in the Abbott case, and that such inhibition justified the assumption of jurisdiction
by the DOLE Secretary.
In this petition, petitioner argues that:

I.

The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over Petitioners
appeal of the Regional Directors Decision in the Cancellation Petition x x x.

A. Jurisdiction is conferred only by law. The Labor Secretary had no jurisdiction to review the decision of the
Regional Director in a petition for cancellation. Such jurisdiction is conferred by law to the BLR.

B. The unilateral inhibition by the BLR Director cannot justify the Labor Secretarys exercise of jurisdiction over the
Appeal.

C. The Labor Secretarys assumption of jurisdiction over the Appeal without notice violated Petitioners right to
due process.

II.

The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the mandatory and
unequivocal provisions of the Labor Code and its Implementing Rules.[24]

The petition has no merit.

Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly provided in the Implementing
Rules of the Labor Code and enunciated by the Court in Abbott. But as pointed out by the CA, the present case involves a
peculiar circumstance that was not present or covered by the ruling in Abbott. In this case, the BLR Director inhibited
himself from the case because he was a former counsel of respondent. Who, then, shall resolve the case in his place?

In Abbott, the appeal from the Regional Directors decision was directly filed with the Office of the DOLE Secretary, and
we ruled that the latter has no appellate jurisdiction. In the instant case, the appeal was filed by petitioner with the BLR,
which, undisputedly, acquired jurisdiction over the case. Once jurisdiction is acquired by the court, it remains with it
until the full termination of the case.[25]
Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition. When the DOLE Secretary resolved the
appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself
perform. She did so pursuant to her power of supervision and control over the BLR.[26]

Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M. Gatmaitan, et
al.,[27] pronounced that, if a certain power or authority is vested by law upon the Department Secretary, then such
power or authority may be exercised directly by the President, who exercises supervision and control over the
departments. This principle was incorporated in the Administrative Code of 1987, which defines supervision and control
as including the authority to act directly whenever a specific function is entrusted by law or regulation to a
subordinate.[28] Applying the foregoing to the present case, it is clear that the DOLE Secretary, as the person exercising
the power of supervision and control over the BLR, has the authority to directly exercise the quasi-judicial function
entrusted by law to the BLR Director.

It is true that the power of control and supervision does not give the Department Secretary unbridled authority to take
over the functions of his or her subordinate. Such authority is subject to certain guidelines which are stated in Book IV,
Chapter 8, Section 39(1)(a) of the Administrative Code of 1987.[29] However, in the present case, the DOLE Secretarys act
of taking over the function of the BLR Director was warranted and necessitated by the latters inhibition from the case
and the objective to maintain the integrity of the decision, as well as the Bureau itself.[30]

Petitioner insists that the BLR Directors subordinates should have resolved the appeal, citing the provision under the
Administrative Code of 1987 which states, in case of the absence or disability of the head of a bureau or office, his duties
shall be performed by the assistant head.[31] The provision clearly does not apply considering that the BLR Director was
neither absent nor suffering from any disability; he remained as head of the BLR. Thus, to dispel any suspicion of bias,
the DOLE Secretary opted to resolve the appeal herself.

Petitioner was not denied the right to due process when it was not notified in advance of the BLR Directors inhibition
and the DOLE Secretarys assumption of the case. Well-settled is the rule that the essence of due process is simply
an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain ones side or an
opportunity to seek a reconsideration of the action or ruling complained of.[32] Petitioner had the opportunity to
question the BLR Directors inhibition and the DOLE Secretarys taking cognizance of the case when it filed a motion for
reconsideration of the latters decision. It would be well to state that a critical component of due process is a hearing
before an impartial and disinterested tribunal, for all the elements of due process, like notice and hearing, would be
meaningless if the ultimate decision would come from a partial and biased judge.[33] It was precisely to ensure a fair trial
that moved the BLR Director to inhibit himself from the case and the DOLE Secretary to take over his function.

Petitioner also insists that respondents registration as a legitimate labor union should be cancelled. Petitioner posits
that once it is determined that a ground enumerated in Article 239 of the Labor Code is present, cancellation of
registration should follow; it becomes the ministerial duty of the Regional Director to cancel the registration of the labor
organization, hence, the use of the word shall. Petitioner points out that the Regional Director has admitted in its
decision that respondent failed to submit the required documents for a number of years; therefore, cancellation of its
registration should have followed as a matter of course.

We are not persuaded.


Articles 238 and 239 of the Labor Code read:

ART. 238. CANCELLATION OF REGISTRATION; APPEAL

The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled by the
Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of
the requirements herein prescribed.[34]

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.

The following shall constitute grounds for cancellation of union registration:

xxxx

(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year
and misrepresentation, false entries or fraud in the preparation of the financial report itself;

xxxx

(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau.[35]

These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a unions
registration, particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient
to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the
requirements of the law. After all, the law requires the labor organization to submit the annual financial report and list
of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the
employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for
cancellation of respondents registration. The union members and, in fact, all the employees belonging to the
appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the union
officers who were responsible for the submission of the documents to the BLR.

Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration, lest
they be accused of interfering with union activities. In resolving the petition, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted activities. Labor authorities should bear in
mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges granted by
law to a legitimate labor organization, particularly the right to participate in or ask for certification election in a
bargaining unit.[36] Thus, the cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses - as a rule - its rights under the Labor Code.[37]

It is worth mentioning that the Labor Codes provisions on cancellation of union registration and on reportorial
requirements have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the Workers
Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise
Known as the Labor Code of the Philippines, which lapsed into law on May 25, 2007 and became effective on June 14,
2007. The amendment sought to strengthen the workers right to self-organization and enhance
the Philippines compliance with its international obligations as embodied in the International Labour Organization (ILO)
Convention No. 87,[38] pertaining to the non-dissolution of workers organizations by administrative authority.[39] Thus,
R.A. No. 9481 amended Article 239 to read:

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.

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:

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-laws or amendments thereto;

(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;

(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall
subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.

ILO Convention No. 87, which we have ratified in 1953, provides that workers and employers organizations shall not be
liable to be dissolved or suspended by administrative authority. The ILO has expressed the opinion that the cancellation
of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to dissolution of the
organization by administrative authority when such measure would give rise to the loss of legal personality of the union
or loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has
allowed such measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial
body, it has nonetheless reminded its members that dissolution of a union, and cancellation of registration for that
matter, involve serious consequences for occupational representation. It has, therefore, deemed it preferable if such
actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the
organization.[40]

The aforesaid amendments and the ILOs opinion on this matter serve to fortify our ruling in this case. We therefore
quote with approval the DOLE Secretarys rationale for denying the petition, thus:

It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance
with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation
of union registration. Article 239 recognizes the regulatory authority of the State to exact compliance with reporting
requirements. Yet there is more at stake in this case than merely monitoring union activities and requiring periodic
documentation thereof.

The more substantive considerations involve the constitutionally guaranteed freedom of association and right of
workers to self-organization. Also involved is the public policy to promote free trade unionism and collective bargaining
as instruments of industrial peace and democracy. An overly stringent interpretation of the statute governing
cancellation of union registration without regard to surrounding circumstances cannot be allowed. Otherwise, it would
lead to an unconstitutional application of the statute and emasculation of public policy objectives. Worse, it can render
nugatory the protection to labor and social justice clauses that pervades the Constitution and the Labor Code.

Moreover, submission of the required documents is the duty of the officers of the union. It would be unreasonable for
this Office to order the cancellation of the union and penalize the entire union membership on the basis of the
negligence of its officers. In National Union of Bank Employees vs. Minister of Labor, L-53406, 14 December 1981, 110
SCRA 296, the Supreme Court ruled:
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: The rights of workers to self-organization finds
general and specific constitutional guarantees. x x x Such constitutional guarantees should not be lightly taken much less
nullified. A healthy respect for the freedom of association demands that acts imputable to officers or members be not
easily visited with capital punishments against the association itself.

At any rate, we note that on 19 May 2000, appellee had submitted its financial statement for the years 1996-1999. With
this submission, appellee has substantially complied with its duty to submit its financial report for the said period. To
rule differently would be to preclude the union, after having failed to meet its periodic obligations promptly, from taking
appropriate measures to correct its omissions. For the record, we do not view with favor appellees late submission.
Punctuality on the part of the union and its officers could have prevented this petition.[41]

WHEREFORE, premises considered, the Court of Appeals Decision dated May 30, 2005 and Resolution dated June 4,
2007 are AFFIRMED.

SO ORDERED.
Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

LEGEND INTERNATIONAL RESORTS G.R. No. 169754


LIMITED,

Petitioner,

Present:

- versus - CORONA, C.J., Chairperson,

VELASCO, JR.,

NACHURA,⃰

DEL CASTILLO, and

KILUSANG MANGGAGAWA PEREZ, JJ.

NG LEGENDA (KML-

INDEPENDENT), Promulgated:

Respondent. February 23, 2011

x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the September 18, 2003 Decision of the Court of Appeals in CA-G.R. SP No.
72848 which found no grave abuse of discretion on the part of the Office of the Secretary of the Department of Labor
and Employment (DOLE) which ruled in favor of Kilusang Manggagawa ng Legenda (KML). Also assailed is the
September 14, 2005 Resolution denying petitioners motion for reconsideration.
Factual Antecedents

On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a Petition for
Certification Election[1] docketed as Case No. RO300-0106-RU-001. KML alleged that it is a legitimate labor organization
of the rank and file employees of Legend International Resorts Limited (LEGEND). KML claimed that it was issued its
Certificate of Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.

LEGEND moved to dismiss[2] the petition alleging that KML is not a legitimate labor organization because its membership
is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor Code. LEGEND also
claimed that KML committed acts of fraud and misrepresentation when it made it appear that certain employees
attended its general membership meeting on April 5, 2001 when in reality some of them were either at work; have
already resigned as of March 2001; or were abroad.

In its Comment,[3] KML argued that even if 41 of its members are indeed supervisory employees and therefore excluded
from its membership, the certification election could still proceed because the required number of the total rank and file
employees necessary for certification purposes is still sustained. KML also claimed that its legitimacy as a labor union
could not be collaterally attacked in the certification election proceedings but only through a separate and independent
action for cancellation of union registration. Finally, as to the alleged acts of misrepresentation, KML asserted that
LEGEND failed to substantiate its claim.

Ruling of the Med-Arbiter

On September 20, 2001, the Med-Arbiter[4] rendered judgment[5] dismissing for lack of merit the petition for certification
election. The Med-Arbiter found that indeed there were several supervisory employees in KMLs membership. Since
Article 245 of the Labor Code expressly prohibits supervisory employees from joining the union of rank and file
employees, the Med-Arbiter concluded that KML is not a legitimate labor organization. KML was also found to have
fraudulently procured its registration certificate by misrepresenting that 70 employees were among those who attended
its organizational meeting on April 5, 2001 when in fact they were either at work or elsewhere.

KML thus appealed to the Office of the Secretary of the DOLE.

Ruling of the Office of the Secretary of DOLE

On May 22, 2002, the Office of the Secretary of DOLE rendered its Decision[6] granting KMLs appeal thereby reversing
and setting aside the Med-Arbiters Decision. The Office of the Secretary of DOLE held that KMLs legitimacy as a union
could not be collaterally attacked, citing Section 5,[7] Rule V of Department Order No. 9, series of 1997.
The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely provides for the prohibition on
managerial employees to form or join a union and the ineligibility of supervisors to join the union of the rank and file
employees and vice versa. It declared that any violation of the provision of Article 245 does not ipso facto render the
existence of the labor organization illegal. Moreover, it held that Section 11, paragraph II of Rule XI which provides for
the grounds for dismissal of a petition for certification election does not include mixed membership in one union.

The dispositive portion of the Office of the Secretary of DOLEs Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the order of the Med-Arbiter dated 20 September 2001 is REVERSED
and SET ASIDE.

Accordingly, let the entire record of the case be remanded to the regional office of origin for the immediate conduct of
the certification election, subject to the usual pre-election conference, among the rank and file employees of LEGEND
INTERNATIONAL RESORTS LIMITED with the following choices:

1. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT); and

2. NO UNION.

Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby directed to submit to the office of origin, within
ten days from receipt of the decision, the certified list of employees in the bargaining unit for the last three (3) months
prior to the issuance of this decision.

SO DECIDED.[8]

LEGEND filed its Motion for Reconsideration[9] reiterating its earlier arguments. It also alleged that on August 24, 2001, it
filed a Petition[10] for Cancellation of Union Registration of KML docketed as Case No. RO300-0108-CP-001 which was
granted[11] by the DOLE Regional Office No. III of San Fernando, Pampanga in its Decision[12] dated November 7, 2001.

In a Resolution[13] dated August 20, 2002, the Office of the Secretary of DOLE denied LEGENDs motion for
reconsideration. It opined that Section 11, paragraph II(a), Rule XI of Department Order No. 9 requires a final order of
cancellation before a petition for certification election may be dismissed on the ground of lack of legal
personality. Besides, it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San Fernando,
Pampanga in Case No. RO300-0108-CP-001 was reversed by the Bureau of Labor Relations in a Decision dated March 26,
2002.

Ruling of the Court of Appeals

Undeterred, LEGEND filed a Petition for Certiorari[14] with the Court of Appeals docketed as CA-G.R. SP No.
72848. LEGEND alleged that the Office of the Secretary of DOLE gravely abused its discretion in reversing and setting
aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against KML.

For its part, KML alleged that the Decision dated March 26, 2002 of the Bureau of Labor Relations in Case No. RO300-
0108-CP-001 denying LEGENDs petition for cancellation and upholding KMLs legitimacy as a labor organization has
already become final and executory, entry of judgment having been made on August 21, 2002.[15]

The Office of the Secretary of DOLE also filed its Comment[16] asserting that KMLs legitimacy cannot be attacked
collaterally. Finally, the Office of the Secretary of DOLE stressed that LEGEND has no legal personality to participate in
the certification election proceedings.

On September 18, 2003, the Court of Appeals rendered its Decision[17] finding no grave abuse of discretion on the part of
the Office of the Secretary of DOLE. The appellate court held that the issue on the legitimacy of KML as a labor
organization has already been settled with finality in Case No. RO300-0108-CP-001. The March 26, 2002 Decision of the
Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had long become final and executory
for failure of LEGEND to appeal the same. Thus, having already been settled that KML is a legitimate labor organization,
the latter could properly file a petition for certification election. There was nothing left for the Office of the Secretary of
DOLE to do but to order the holding of such certification election.

The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing, and finding that no grave abuse of discretion amounting to lack or excess of
jurisdiction has been committed by the Department of Labor and Employment, the assailed May 22, 2002 Decision and
August 20, 2002 Resolution in Case No. RO300-106-RU-001 are UPHELD and AFFIRMED. The instant petition is DENIED
due course and, accordingly, DISMISSED for lack of merit.[18]
LEGEND filed a Motion for Reconsideration[19] alleging, among others, that it has appealed to the Court of Appeals the
March 26, 2002 Decision in Case No. RO300-0108-CP-001 denying its petition for cancellation and that it is still pending
resolution.

On September 14, 2005, the appellate court denied LEGENDs motion for reconsideration.

Hence, this Petition for Review on Certiorari raising the lone assignment of error, viz:

WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN THE APPLICATION OF LAW IN
DENYING THE PETITIONERS PETITION FOR CERTIORARI.[20]

Petitioners Arguments

LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26, 2002 Decision denying its
Petition for Cancellation of KMLs registration has already become final and executory. It asserts that it has seasonably
filed a Petition for Certiorari[21]before the CA docketed as CA-G.R. SP No. 72659 assailing said Decision. In fact, on June
30, 2005, the Court of Appeals granted the petition, reversed the March 26, 2002 Decision of the Bureau of Labor
Relations and reinstated the November 7, 2001 Decision of the DOLE Regional Office III ordering the cancellation of
KMLs registration.

Finally, LEGEND posits that the cancellation of KMLs certificate of registration should retroact to the time of its
issuance.[22] It thus claims that the petition for certification election and all of KMLs activities should be nullified because
it has no legal personality to file the same, much less demand collective bargaining with LEGEND.[23]

LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing KMLs petition for certification
election be reinstated.[24]

Respondents Arguments

In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision of the Bureau of Labor
Relations upholding its legitimacy as a labor organization has already attained finality[25] hence there was no more
hindrance to the holding of a certification election. Moreover, it claims that the instant petition has become moot
because the certification election sought to be prevented had already been conducted.
Our Ruling

The petition is partly meritorious.

LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor Relations to the Court of Appeals.

We cannot understand why the Court of Appeals totally disregarded LEGENDs allegation in its Motion for
Reconsideration that the March 26, 2002 Decision of the Bureau of Labor Relations has not yet attained finality
considering that it has timely appealed the same to the Court of Appeals and which at that time is still pending
resolution. The Court of Appeals never bothered to look into this allegation and instead dismissed outright LEGENDs
motion for reconsideration. By doing so, the Court of Appeals in effect maintained its earlier ruling that the March 26,
2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor organization has long become
final and executory for failure of LEGEND to appeal the same.

This is inaccurate. Records show that (in the cancellation of registration case) LEGEND has timely filed on September 6,
2002 a petition for certiorari[26] before the Court of Appeals which was docketed as CA-G.R. SP No. 72659 assailing the
March 26, 2002 Decision of the Bureau of Labor Relations. In fact, KML received a copy of said petition on September 10,
2002[27] and has filed its Comment thereto on December 2, 2002.[28] Thus, we find it quite interesting for KML to claim in
its Comment (in the certification petition case) before this Court dated March 21, 2006[29] that the Bureau of Labor
Relations Decision in the petition for cancellation case has already attained finality. Even in its Memorandum[30] dated
March 13, 2007 filed before us, KML is still insisting that the Bureau of Labor Relations Decision has become final and
executory.

Our perusal of the records shows that on June 30, 2005, the Court of Appeals rendered its Decision[31] in CA-G.R. SP No.
72659 reversing the March 26, 2002 Decision of the Bureau of Labor Relations and reinstating the November 7, 2001
Decision of the Med-Arbiter which canceled the certificate of registration of KML.[32] On September 30, 2005, KMLs
motion for reconsideration was denied for lack of merit.[33] On November 25, 2005, KML filed its Petition for Review
on Certiorari[34] before this Court which was docketed as G.R. No. 169972. However, the same was denied in a
Resolution[35] dated February 13, 2006 for having been filed out of time. KML moved for reconsideration but it was
denied with finality in a Resolution[36] dated June 7, 2006. Thereafter, the said Decision canceling the certificate of
registration of KML as a labor organization became final and executory and entry of judgment was made on July 18,
2006.[37]

The cancellation of KMLs certificate of registration should not retroact to the time of its issuance.
Notwithstanding the finality of the Decision canceling the certificate of registration of KML, we cannot subscribe to
LEGENDs proposition that the cancellation of KMLs certificate of registration should retroact to the time of its
issuance. LEGEND claims that KMLs petition for certification election filed during the pendency of the petition for
cancellation and its demand to enter into collective bargaining agreement with LEGEND should be dismissed due to
KMLs lack of legal personality.

This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor,[38] we already ruled that:

Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for
certification election, the following ruling in the case of Association of the Court of Appeals Employees (ACAE) v. Hon.
Pura Ferrer-Calleja, x x x is in point, to wit:

x x x It is well-settled rule that a certification proceedings is not a litigation in the sense that the term is ordinarily
understood, but an investigation of a non-adversarial and fact finding character. (Associated Labor Unions (ALU) v.
Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451
[1990]. Thus, the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the
sufficiency of the petition as well as a careful look into the arguments contained in the position papers and other
documents.

At any rate, the Court applies the established rule correctly followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the registration certificate of
the respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the
legal personality to perform such act absent an order directing the cancellation.[39] (Emphasis supplied.)

In Capitol Medical Center, Inc. v. Hon. Trajano,[40] we also held that the pendency of a petition for cancellation of union
registration does not preclude collective bargaining.[41] Citing the Secretary of Labor, we held viz:

That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a petition to
cancel the unions registration certificate x x x more so should the collective bargaining process continue despite its
pendency. [42] (Emphasis supplied.)

In Association of Court of Appeals Employees v. Ferrer-Calleja,[43] this Court was tasked to resolve the issue of whether
the certification proceedings should be suspended pending [the petitioners] petition for the cancellation of union
registration of the UCECA[44].[45] The Court resolved the issue in the negative holding that an order to hold a certification
election is proper despite the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal
personality to perform such act absent an order directing a cancellation.[46] We reiterated this view in Samahan ng
Manggagawa sa Pacific Plastic v. Hon. Laguesma[47] where we declared that a certification election can be conducted
despite pendency of a petition to cancel the union registration certificate. For the fact is that at the time the
respondent union filed its petition for certification, it still had the legal personality to perform such act absent an order
directing its cancellation.[48]

Based on the foregoing jurisprudence, it is clear that a certification election may be conducted during the pendency of
the cancellation proceedings. This is because at the time the petition for certification was filed, the petitioning union is
presumed to possess the legal personality to file the same. There is therefore no basis for LEGENDs assertion that the
cancellation of KMLs certificate of registration should retroact to the time of its issuance or that it effectively nullified all
of KMLs activities, including its filing of the petition for certification election and its demand to collectively bargain.

The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election.

We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the legal personality of KML cannot
be collaterally attacked in a petition for certification election proceeding. This is in consonance with our ruling in Laguna
Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment[49] that such legal
personality may not be subject to a collateral attack but only through a separate action instituted particularly for the
purpose of assailing it.[50] We further held therein that:

This is categorically prescribed by Section 5, Rule V of the Implementing Rules of Book V, which states as follows:

SEC. 5.[51] 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.

Hence, to raise the issue of the respondent unions legal personality is not proper in this case. The pronouncement of the
Labor Relations Division Chief, that the respondent union acquired a legal personality x x x cannot be challenged in a
petition for certification election.

The discussion of the Secretary of Labor and Employment on this point is also enlightening, thus:
. . . Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal personality of a union cannot be the
subject of collateral attack in a petition for certification election, but may be questioned only in an independent petition
for cancellation of union registration.This has been the rule since NUBE v. Minister of Labor, 110 SCRA 274 (1981). What
applies in this case is the principle that once a union acquires a legitimate status as a labor organization, it continues as
such until its certificate of registration is cancelled or revoked in an independent action for cancellation.

Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for the dismissal of a petition for
certification election based on the lack of legal personality of a labor organization only in the following instances: (1)
appellant is not listed by the Regional Office or the BLR in its registry of legitimate labor organizations; or (2) appellants
legal personality has been revoked or cancelled with finality. Since appellant is listed in the registry of legitimate labor
organizations, and its legitimacy has not been revoked or cancelled with finality, the granting of its petition for
certification election is proper.[52]

[T]he legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack. The law is very
clear on this matter. x x x 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 a collateral attack. In may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.[53]

WHEREFORE, in view of the foregoing, the petition is PARTLY GRANTED. The Decision of the Court of Appeals
dated September 18, 2003 in CA-G.R. SP No. 72848 insofar as it affirms the May 22, 2002 Decision and August 20, 2002
Resolution of the Office of the Secretary of Department of Labor and Employment is AFFIRMED. The Decision of the
Court of Appeals insofar as it declares that the March 26, 2002 Decision of the Bureau of Labor Relations in Case No.
RO300-0108-CP-001 upholding that the legitimacy of KML as a labor organization has long become final and executory
for failure of LEGEND to appeal the same, is REVERSED and SET ASIDE.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:
RENATO C. CORONA

Chief Justice

Chairperson

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA

Chief Justice
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 196276 June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,


vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA (SALAMAT),Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation assailing the
Decision1 dated December 22, 2010 and the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-G.R. SP No.
112406.

On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional Office a Petition3for
Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas Manggagawa ng Takata (SALAMA1)
on the ground that the latter is guilty of misrepresentation, false statement and fraud with respect to the number of
those who participated in the organizational meeting, the adoption and ratification of its Constitution and By-Laws, and
in the election of its officers. It contended that in the May 1, 2009 organizational meeting of respondent, only 68
attendees signed the attendance sheet, and which number comprised only 17% of the total number of the 396 regular
rank- and-file employees which respondent sought to represent, and hence, respondent failed to comply with the 20%
minimum membership requirement. Petitioner insisted that the document "Pangalan ng mga Kasapi ng Unyon" bore no
signatures of the alleged 119 union members; and that employees were not given sufficient information on the
documents they signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of the
filing of respondent's application for union registration; that the 119 union members were actually only 117; and, that
the total number of petitioner's employees as of May 1, 2009 was 470, and not 396 as respondent claimed.4

Respondent denied the charge and claimed that the 119 union members were more than the 20% requirement for
union registration. The document "Sama-Samang Pahayag ng Pagsapi sa Unyon" which it presented in its petition for
certification election5 supported their claim of 119 members. Respondent also contended that petitioner was estopped
from assailing its legal personality as it agreed to a certification election and actively participated in the pre-election
conference of the certification election proceedings.6 Respondent argued that the union members were informed of the
contents of the documents they signed and that the 68 attendees to the organizational meeting constituted more than
50% of the total union membership, hence, a quo rumexisted for the conduct of the said meeting.7

On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a Decision8 granting the petition for
cancellation of respondent's certificate of registration, the dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the respondent Union
Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby REVOCKED (sic) and /or
CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the Samahang Lakas
ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate labor organization of this office.9

In revoking respondent's certificate of registration, the Regional Director found that the 68 employees who attended the
organizational meeting was obviously less than 20% of the total number of 396 regular rank-and-file employees which
respondent sought to represent, hence, short of the union registration requirement; that the attendance sheet which
contained the signatures and names of the union members totalling to 68 contradicted the list of names stated in the
document denominated as "Pangalan ng mga Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was
not attached to the application for registration as it was only submitted in the petition for certification election filed by
respondent at a later date. The Regional Director also found that the proceedings in the cancellation of registration and
certification elections are two different and entirely separate and independent proceedings which were not dependent
on each other.

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer, Domingo P. Mole, filed a
Notice and Memorandum of Appeal10 with the Bureau of Labor Relations (BLR). However, on September 28,2009,
respondent, through its counsels, Attys.

Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry of
Appearance11 to the Office of the DOLE Secretary, which the latter eventually referred to the BLR. Petitioner filed an
Opposition to the Appeals12 praying for their dismissal on the ground of forum shopping as respondent filed two
separate appeals in two separate venues; and for failing to avail of the correct remedy within the period; and that the
certificate of registration was tainted with fraud, misrepresentation and falsification.

In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal Officer was no longer
authorized to file an appeal on behalf of respondent as the latter's link with BMP was already terminated and only the
Union President was authorized to file the appeal; and that it complied with Department Order No. 40-03.

On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of Appearance and
petitioner's Answer, the BLR rendered its Decision14 reversing the Order of the Regional Director, the decretal portion of
which reads:

WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S. Martinez, Sr., dated 27 August
2009, is hereby REVERSEDand SET ASIDE.

Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of labor organizations.15

In reversing, the BLR found that petitioner failed to prove that respondent deliberately and maliciously misrepresented
the number of rank-and-file employees. It pointed out petitioner's basis for the alleged noncompliance with the
minimum membership requirement for registration was the attendance of 68 members to the May 1, 2009
organizational meeting supposedly comprising only 17% of the total 396 regular rank-and-file employees. However, the
BLR found that the list of employees who participated in the organizational meeting was a separate and distinct
requirement from the list of the names of members comprising at least 20% of the employees in the bargaining unit;
and that there was no requirement for signatures opposite the names of the union members; and there was no
evidence showing that the employees assailed their inclusion in the list of union members.

Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution16 dated January 8, 2010.

Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for decision.

On December 22, 2010, the CA rendered its assailed decision which denied the petition and affirmed the decision of the
BLR. Petitioner's motion for reconsideration was denied in a Resolution dated March 29, 2011.

Hence this petition for review filed by petitioner raising the following issues, to wit:

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN AFFIRMING THE DECISION OF PUBLIC
RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF
THE RULE ON FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS BEHALF. BOTH OF THE APPEALS
SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE APPLICATION FOR REGISTRATION OF
SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE
CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED WITH FRAUD,
MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS THE REQUIREDNUMBER OF MEMBERS AT THE
TIME OF FILING OF ITS APPLICATION FOR REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION,
AND FALSE STATEMENTS AND FRAUD IN CONNECTION THEREWITH.17

Anent the first issue, petitioner contends that respondent had filed two separate appeals with two different
representations at two different venues, in violation of the rule on multiplicity of suits and forum shopping, and instead
of dismissing both appeals, the appeal erroneously filed before the Labor Secretary was the one held validly filed,
entertained and even granted; that it is not within the discretion of BLR to choose which between the two appeals
should be entertained, as it is the fact of the filing of the two appeals that is being prohibited and not who among the
representatives therein possessed the authority.

We are not persuaded.

We find no error committed by the CA in finding that respondent committed no forum shopping. As the CA correctly
concluded, to wit:

It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on behalf of
union SALAMAT and that BMP was duly informed that its services was already terminated. SALAMAT even submitted
before the BLR its "Resolusyon Blg. 01-2009" terminating the services of BMP and revoking the representation of Mr.
Domingo Mole in any of the pending cases being handled by him on behalf of the union. So, considering that BMP
Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal when it filed the Notice and Memorandum
of Appeal to DOLE Regional Office No. IV-A, the same can no longer be treated as an appeal filed by union SALAMAT.
Hence, there is no forum shopping to speak of in this case as only the Appeal Memorandum with Formal Entry of
Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by SALAMAT.18

Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is considered to have
not been filed at all. It has been held that "if a complaint is filed for and in behalf of the plaintiff who is not authorized to
do so, the complaint is not deemed filed.

An unauthorized complaint does not produce any legal effect."19

Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of Appearance
before the Labor Secretary, and not with the BLR. As the appeal emanated from the petition for cancellation of
certificate of registration filed with the Regional Office, the decision canceling the registration is appealable to the BLR,
and not with the Labor Secretary. However, since the Labor Secretary motu propio referred the appeal with the BLR, the
latter can now act on it. Considering that Mole's appeal with the BLR was not deemed filed, respondent’s appeal,
through Banzuela and Associates, which the Labor Secretary referred to the BLR was the only existing appeal with the
BLR for resolution. There is, therefore, no merit to petitioner's claim that BLR chose the appeal of Banzuela and
Associates over Mole's appeal.

The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union20 cited by petitioner is not at
all applicable in this case as the issue therein is the authority of the Labor Secretary to review the decision of the Bureau
of Labor Relations rendered in the exercise of its appellate jurisdiction over decision of the Regional Director in cases
involving cancellations of certificate of registration of labor unions. We found no grave abuse of discretion committed by
the Secretary of Labor in not acting on therein petitioner's appeal. The decision of the Bureau of Labor Relations on
cases brought before it on appeal from the Regional Director are final and executory. Hence, the remedy of the
aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65 and the Rules of Court. In this
case, after the Labor Secretary motu propio referred respondent's appeal filed with it to the BLR which rendered its
decision reversing the Regional Director, petitioner went directly to the CA via a petition for certiorari under Rule 65.

As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds offraud and
misrepresentation bearing on the minimum requirement of the law as to its membership, considering the big disparity in
numbers, between the organizational meeting and the list of members, and so misleading the BLR that it obtained the
minimum required number of employees for purposes of organization and registration.

We find no merit in the arguments.

Art. 234 of the Labor Code provides:

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 (₱50.00)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."

And after the issuance of the certificate of registration, the labor organization's registration could be assailed directly
through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code. And the
cancellation of union certificate of registration and the grounds thereof are 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.

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.

Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate of registration is a
serious charge and must be carefully evaluated. Allegations thereof should be compounded with supporting
circumstances and evidence.21 We find no evidence on record to support petitioner's accusation.

Petitioner's allegation of misrepresentation and fraud is based on its claim that during the organizational meeting on
May 1, 2009, only 68 employees attended, while respondent claimed that it has 119 members as shown in the
document denominated as "Pangalan ng mga Kasapi ng Unyon;" hence, respondent misrepresented on the 20%
requirement of the law as to its membership.

We do not agree.

It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting must comprise
20% of the employees in the bargaining unit. In fact, even the Implementing Rules and Regulations of the Labor Code
does not so provide. It is only under Article 234 (c) that requires the names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit where it seeks to operate. Clearly, the 20% minimum
requirement pertains to the employees’ membership in the union and not to the list of workers who participated in the
organizational meeting. Indeed, Article 234 (b) and (c) provide for separate requirements, which must be submitted for
the union's registration, and which respondent did submit. Here, the total number of employees in the bargaining unit
was 396, and 20% of which was about 79. Respondent submitted a document entitled "Pangalan ng Mga Kasapi ng
Unyon" showing the names of 119 employees as union members, thus respondent sufficiently complied even beyond
the 20% minimum membership requirement. Respondent also submitted the attendance sheet of the organizational
meeting which contained the names and signatures of the 68 union members who attended the meeting. Considering
that there are 119 union members which are more than 20% of all the employees of the bargaining unit, and since the
law does not provide for the required number of members to attend the organizational meeting, the 68 attendees which
comprised at least the majority of the 119 union members would already constitute a quorum for the meeting to
proceed and to validly ratify the Constitution and By-laws of the union. There is, therefore, no basis for petitioner to
contend that grounds exist for the cancellation of respondent's union registration. For fraud and misrepresentation to
be grounds for cancellation of union registration under Article 239 of the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members.22

Petitioner's claim that the alleged union members signed documents without adequate information is not persuasive.
The one who alleges a fact has the burden of proving it and a mere allegation is not evidence.23 In fact, we note that not
one of those listed in the document denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to deny
their membership with respondent. Notably, it had not been rebutted that the same union members had signed the
document entitled "Sama-Samang Pahayag ng Pagsapi," thus, strengtheningtheir desire to be members of the
respondent union.

Petitioner claims that in the list of members, there was an employee whose name appeared twice and another
employee who was merely a project employee. Such could not be considered a misrepresentation in the absence of
showing that respondent deliberately did so for the purpose of increasing their union membership. In fact, even if those
two names were not included in the list of union members, there would still be 117 members which was still more than
20% of the 396 rank-and-file employees.

As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and not396 as
respondent claimed, still the 117 union members comprised more than the 20% membership requirement for
respondent's registration.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment,24 we said:

For the purpose of de-certifying a union such as respondent, it must be shown that there was misrepresentation, false
statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification; or, in connection with the election of officers, the minutes of the election of officers,
the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and
their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel respondent’s certificate of registration. The cancellation of a
union’s registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of the fraud
and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members.1âwphi1

In this case, we agree with the BLR and the CA that respondent could not have possibly committed misrepresentation,
fraud, or false statements. The alleged failure of respondent to indicate with mathematical precision the total number of
employees in the bargaining unit is of no moment, especially as it was able to comply with the 20% minimum
membership requirement. Even if the total number of rank-and-file employees of petitioner is 528, while respondent
declared that it should only be 455, it still cannot be denied that the latter would have more than complied with the
registration requirement.25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated December 22, 2010 and the
Resolution dated March 28, 2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.


Associate Justice
Chairperson

MARTIN S. VILLARAMA, JR.* JOSE CATRAL MENDOZA


Associate Justice Associate Justice

MARVIC MARIO VICTOR F. LEONEN


Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.

PRESBITER J. VELASCO, JR.


Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.

MARIA LOURDES P. A. SERENO


Chief Justice
G.R. No. 211145, October 14, 2015

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT, ALFIE ALIPIO, Petitioner, v. BUREAU OF
LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-PHIL.), Respondents.

DECISION

MENDOZA, J.:

The right to self-organization is not limited to unionism. Workers may also form or join an association for mutual aid and
protection and for other legitimate purposes.

This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013 Decision1 and the January 28,
2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 123397, which reversed the November 28, 2011
Resolution3 of the Bureau of Labor Relations (BLR) and reinstated the April 20, 2010 Decision4 of the Department of
Labor and Employment (DOLE) Regional Director, cancelling the registration of Samahan ng Manggagawa sa Hanjin
Shipyard (Samahan) as a worker's association under Article 243 (now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed an application for
registration5 of its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the
application were the list of names of the association's officers and members, signatures of the attendees of the February
7, 2010 meeting, copies of their Constitution and By-laws. The application stated that the association had a total of 120
members.

On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando, Pampanga (DOLE-Pampanga), issued the
corresponding certificate of registration6 in favor of Samahan.

On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd. Philippines (Hanjin), with offices at
Greenbeach 1, Renondo Peninsula, Sitio Agustin, Barangay Cawag, Subic Bay Freeport Zone, filed a petition7 with DOLE-
Pampanga praying for the cancellation of registration of Samahan's association on the ground that its members did not
fall under any of the types of workers enumerated in the second sentence of Article 243 (now 249).

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed, and those without definite
employers may form a workers' association. It further posited that one third (1/3) of the members of the association had
definite employers and the continued existence and registration of the association would prejudice the company's
goodwill.
On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground that Samahan committed a
misrepresentation in connection with the list of members and/or voters who took part in the ratification of their
constitution and by-laws in its application for registration. Hanjin claimed that Samahan made it appear that its
members were all qualified to become members of the workers' association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-day period to file a
responsive pleading. No pleading, however, was submitted. Instead, Samahan filed a motion to dismiss on April 14,
2010.9

The Ruling of the DOLE Regional Director

On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He found that the preamble, as stated in
the Constitution and By-Laws of Samahan, was an admission on its part that all of its members were employees of
Hanjin, to wit:

KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong na isulong ang pagpapabuti ng kondisyon
sa paggawa at katiyakan sa hanapbuhay sa pamamagitan ng patuloy na pagpapaunlad ng kasanayan ng para sa mga
kasapi nito. Naniniwala na sa pamamagitan ng aming mga angking lakas, kaalaman at kasanayan ay anting
maitataguyod at makapag-aambag sa kaunlaran ng isang lipunan. Na mararating at makakamit ang antas ng pagkilala,
pagdakila at pagpapahalaga sa mga tulad naming mga manggagawa.

x x x10

The same claim was made by Samahan in its motion to dismiss, but it failed to adduce evidence that the remaining 63
members were also employees of Hanjin. Its admission bolstered Hanjin's claim that Samahan committed
misrepresentation in its application for registration as it made an express representation that all of its members were
employees of the former. Having a definite employer, these 57 members should have formed a labor union for collective
bargaining.11 The dispositive portion of the decision of the Dole Regional Director, reads:

WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently, the Certificate of Registration as
Legitimate Workers Association (LWA) issued to the SAMAHAN NG MGA MANGGAGAWA SA HANJIN SHIPYARD
(SAMAHAN) with Registration Numbers R0300-1002-WA-009 dated February 26, 2010 is hereby CANCELLED, and said
association is dropped from the roster of labor organizations of this Office.

SO DECIDED.12

The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no right to petition for the cancellation of
its registration. Samahan pointed out that the words "Hanjin Shipyard," as used in its application for registration,
referred to a workplace and not as employer or company. It explained that when a shipyard was put up in Subic,
Zambales, it became known as Hanjin Shipyard. Further, the remaining 63 members signed the Sama-Samang
Pagpapatunay which stated that they were either working or had worked at Hanjin. Thus, the alleged misrepresentation
committed by Samahan had no leg to stand on.14

In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It reiterated that Samahan committed
misrepresentation in its application for registration before DOLE Pampanga. While Samahan insisted that the remaining
63 members were either working, or had at least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the Regional Director. It stated that
the law clearly afforded the right to self-organization to all workers including those without definite employers.16 As an
expression of the right to self-organization, industrial, commercial and self-employed workers could form a workers'
association if they so desired but subject to the limitation that it was only for mutual aid and protection.17 Nowhere
could it be found that to form a workers' association was prohibited or that the exercise of a workers' right to self-
organization was limited to collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of Samahan. The phrase, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard" if translated, would be: "We, the workers at Hanjin Shipyard." The use of the
preposition "at" instead of "of " would indicate that "Hanjin Shipyard" was intended to describe a place.19 Should Hanjin
feel that the use of its name had affected the goodwill of the company, the remedy was not to seek the cancellation of
the association's registration. At most, the use by Samahan of the name "Hanjin Shipyard" would only warrant a change
in the name of the association.20 Thus, the dispositive portion of the BLR decision reads:

WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director Ernesto C. Bihis dated 20 April 2010
is REVERSED and SET ASIDE.

Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of legitimate workers'
association.21

On October 14, 2010, Hanjin filed its motion for reconsideration.22

In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6, 2010 Decision, but directed Samahan to
remove the words "Hanjin Shipyard" from its name. The BLR explained that the Labor Code had no provision on the use
of trade or business name in the naming of a worker's association, such matters being governed by the Corporation
Code. According to the BLR, the most equitable relief that would strike a balance between the contending interests of
Samahan and Hanjin was to direct Samahan to drop the name "Hanjin Shipyard" without delisting it from the roster of
legitimate labor organizations. The fallo reads:

WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby AFFIRMED with a DIRECTIVE for
SAMAHAN to remove "HANJIN SHIPYARD" from its name.

SO RESOLVED.24

Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA, docketed as CA-G.R. SP No. 123397.

In its March 21, 2012 Resolution,26 the CA dismissed the petition because of Samahan's failure to file a motion for
reconsideration of the assailed November 28, 2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration27 and on July 18, 2012, Hanjin filed its comment28 to
oppose the same. On October 22, 2012, the CA issued a resolution granting Samahan's motion for reconsideration and
reinstating the petition. Hanjin was directed to file a comment five (5) days from receipt of notice.29

On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to require Samahan to change its name
was not tantamount to interfering with the workers' right to self-organization.31 Thus, it prayed, among others, for the
dismissal of the petition for Samahan's failure to file the required motion for reconsideration.32
On January 17, 2013, Samahan filed its reply.33

On March 22, 2013, Hanjin filed its memorandum.34

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as a legitimate workers'
association was contrary to the provisions of Article 243 of the Labor Code.35 It stressed that only 57 out of the 120
members were actually working in Hanjin while the phrase in the preamble of Samahan's Constitution and By-laws,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard" created an impression that all its members were employees of HHIC.
Such unqualified manifestation which was used in its application for registration, was a clear proof of misrepresentation
which warranted the cancellation of Samahan's registration.

It also stated that the members of Samahan could not register it as a legitimate worker's association because the place
where Hanjin's industry was located was not a rural area. Neither was there any evidence to show that the members of
the association were ambulant, intermittent or itinerant workers.36

At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the association name would not
prejudice or impair its right to self-organization because it could adopt other appropriate names. The dispositive portion
reads:

WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the words "Hanjin Shipyard" be removed
from petitioner association's name, is AFFIRMED. The Decision dated April 20, 2010 of the DOLE Regional Director in
Case No. R0300-1003-CP-001, which ordered the cancellation of petitioner association's registration is REINSTATED.

SO ORDERED.37

Hence, this petition, raising the following

ISSUES

I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION
OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD HAVE FORMED A UNION, HENCE THEIR REGISTRATION AS A
WORKERS' ASSOCIATION SHOULD BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REMOVAL/DELETION OF THE WORD "HANJIN" IN THE
NAME OF THE UNION BY REASON OF THE COMPANY'S PROPERTY RIGHT OVER THE COMPANY NAME "HANJIN."38

Samahan argues that the right to form a workers' association is not exclusive to intermittent, ambulant and itinerant
workers. While the Labor Code allows the workers "to form, join or assist labor organizations of their own choosing" for
the purpose of collective bargaining, it does not prohibit them from forming a labor organization simply for purposes of
mutual aid and protection. All members of Samahan have one common place of work, Hanjin Shipyard. Thus, there is no
reason why they cannot use "Hanjin Shipyard" in their name.39

Hanjin counters that Samahan failed to adduce sufficient basis that all its members were employees of Hanjin or its
legitimate contractors, and that the use of the name "Hanjin Shipyard" would create an impression that all its members
were employess of HHIC.40

Samahan reiterates its stand that workers with a definite employer can organize any association for purposes of mutual
aid and protection. Inherent in the workers' right to self-organization is its right to name its own organization. Samahan
referred "Hanjin Shipyard" as their common place of work. Therefore, they may adopt the same in their association's
name.41

The Court's Ruling

The petition is partly meritorious.

Right to self-organization includes right to form a union, workers' association and labor management councils

More often than not, the right to self-organization connotes unionism. Workers, however, can also form and join a
workers' association as well as labor-management councils (LMC). Expressed in the highest law of the land is the right of
all workers to self-organization. Section 3, Article XIII of the 1987 Constitution states:

Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-
organization,

collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. xxx

[Emphasis Supplied]

And Section 8, Article III of the 1987 Constitution also states:

Section 8. 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 not be abridged.

In relation thereto, Article 3 of the Labor Code provides:

Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work.

[Emphasis Supplied]

As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the right to form, join or
assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to
engage in lawful concerted activities for the same purpose for their mutual aid and protection. This is in line with the
policy of the State to foster the free and voluntary organization of a strong and united labor movement as well as to
make sure that workers participate in policy and decision-making processes affecting their rights, duties and welfare.42

The right to form a union or association or to self-organization comprehends two notions, to wit: (a) the liberty or
freedom, that is, the absence of restraint which guarantees that the employee may act for himself without being
prevented by law; and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an
association.43

In view of the revered right of every worker to self-organization, the law expressly allows and even encourages the
formation of labor organizations. A labor organization is defined as "any union or association of employees which exists
in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions
of employment."44 A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right given to a union once it
registers itself with the DOLE. Dealing with the employer, on the other hand, is a generic description of interaction
between employer and employees concerning grievances, wages, work hours and other terms and conditions of
employment, even if the employees' group is not registered with the DOLE.45

A union refers to any labor organization in the private sector organized for collective bargaining and for other legitimate
purpose,46 while a workers' association is an organization of workers formed for the mutual aid and protection of its
members or for any legitimate purpose other than collective bargaining.47

Many associations or groups of employees, or even combinations of only several persons, may qualify as a labor
organization yet fall short of constituting a labor union. While every labor union is a labor organization, not every labor
organization is a labor union. The difference is one of organization, composition and operation.48

Collective bargaining is just one of the forms of employee participation. Despite so much interest in and the promotion
of collective bargaining, it is incorrect to say that it is the device and no other, which secures industrial democracy. It is
equally misleading to say that collective bargaining is the end-goal of employee representation. Rather, the real aim
is employee participation in whatever form it may appear, bargaining or no bargaining, union or no union.49 Any labor
organization which may or may not be a union may deal with the employer. This explains why a workers' association or
organization does not always have to be a labor union and why employer-employee collective interactions are not
always collective bargaining.50

To further strengthen employee participation, Article 255 (now 261)51 of the Labor Code mandates that workers shall
have the right to participate in policy and decision-making processes of the establishment where they are employed
insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers
may form LMCs.

A cursory reading of the law demonstrates that a common element between unionism and the formation of LMCs is the
existence of an employer-employee relationship. Where neither party is an employer nor an employee of the other, no
duty to bargain collectively would exist.52 In the same manner, expressed in Article 255 (now 261) is the requirement
that such workers be employed in the establishment before they can participate in policy and decision making
processes.

In contrast, the existence of employer-employee relationship is not mandatory in the formation of workers' association.
What the law simply requires is that the members of the workers' association, at the very least, share the same interest.
The very definition of a workers' association speaks of "mutual aid and protection."

Right to choose whether to form or join a union or workers' association belongs to workers themselves

In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should have formed a union for
purposes of collective bargaining instead of a workers' association because the choice belonged to it. The right to form
or join a labor organization necessarily includes the right to refuse or refrain from exercising the said right. It is self-
evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled
to exercise such a conferred right.53 Also inherent in the right to self-organization is the right to choose whether to form
a union for purposes of collective bargaining or a workers' association for purposes of providing mutual aid and
protection.

The right to self-organization, however, is subject to certain limitations as provided by law. For instance, the Labor Code
specifically disallows managerial employees from joining, assisting or forming any labor union. Meanwhile, supervisory
employees, while eligible for membership in labor organizations, are proscribed from joining the collective bargaining
unit of the rank and file employees.54 Even government employees have the right to self-organization. It is not, however,
regarded as existing or available for purposes of collective bargaining, but simply for the furtherance and protection of
their interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they should have formed a union instead of
a workers' association. The Court disagrees. There is no provision in the Labor Code that states that employees with
definite employers may form, join or assist unions only.

The Court cannot subscribe either to Hanjin's position that Samahan's members cannot form the association because
they are not covered by the second sentence of Article 243 (now 249), to wit:

Article 243. Coverage and employees' right to self-organization. All persons employed in commercial, industrial and
agricultural enterprises and in 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 organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their mutual aid and protection. (As
amended by Batas Pambansa Bilang 70, May 1, 1980)

[Emphasis Supplied]

Further, Article 243 should be read together with Rule 2 of Department Order (D.O.) No. 40-03, Series of 2003, which
provides:

RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

Section 1. Policy. - It is the policy of the State to promote the free and responsible exercise of the right to self-
organization through the establishment of a simplified mechanism for the speedy registration of labor unions and
workers associations, determination of representation status and resolution of inter/intra-union and other related labor
relations disputes. Only legitimate or registered labor unions shall have the right to represent their members for
collective bargaining and other purposes. Workers' associations shall have the right to represent their members for
purposes other than collective bargaining.

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.

[Emphases Supplied]

Clearly, there is nothing in the foregoing implementing rules which provides that workers, with definite employers,
cannot form or join a workers' association for mutual aid and protection. Section 2 thereof even broadens the coverage
of workers who can form or join a workers' association. Thus, the Court agrees with Samahan's argument that the right
to form a workers' association is not exclusive to ambulant, intermittent and itinerant workers. The option to form or
join a union or a workers' association lies with the workers themselves, and whether they have definite employers or
not.

No misrepresentation on the part of Samahan to warrant cancellation of registration

In this case, Samahan's registration was cancelled not because its members were prohibited from forming a workers'
association but because they allegedly committed misrepresentation for using the phrase, "KAMI, ang mga
Manggagawa sa HAN JIN Shipyard."

Misrepresentation, as a ground for the cancellation of registration of a labor organization, is committed "in connection
with the adoption, or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification,
the list of members who took part in the ratification of the constitution and by-laws or amendments thereto, and those
in connection with the election of officers, minutes of the election of officers, and the list of voters, xxx."56

In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director granted the petition for the cancellation of
certificate of registration of Samahang Lakas Manggagawa sa Takata (Salamat) after finding that the employees who
attended the organizational meeting fell short of the 20% union registration requirement. The BLR, however, reversed
the ruling of the DOLE Regional Director, stating that petitioner Takata Corporation (Takata) failed to prove deliberate
and malicious misrepresentation on the part of respondent Salamat. Although Takata claimed that in the list of
members, there was an employee whose name appeared twice and another was merely a project employee, such facts
were not considered misrepresentations in the absence of showing that the respondent deliberately did so for the
purpose of increasing their union membership. The Court ruled in favor of Salamat.

In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for cancellation of certificate of registration was
denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities, especially those appearing on the
face of the application and its attachments, a union should be denied recognition as a legitimate labor organization.
Prescinding from these considerations, the issuance to the Union of Certificate of Registration No. RO300-00-02-UR-
0003 necessarily implies that its application for registration and the supporting documents thereof are prima facie free
from any vitiating irregularities. Another factor which militates against the veracity of the allegations in the Sinumpaang
Petisyon is the lack of particularities on how, when and where respondent union perpetrated the alleged fraud on
each member. Such details are crucial for in the proceedings for cancellation of union registration on the ground of
fraud or misrepresentation, what needs to be established is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose.

[Emphases Supplied]

Based on the foregoing, the Court concludes that misrepresentation, to be a ground for the cancellation of the
certificate of registration, must be done maliciously and deliberately. Further, the mistakes appearing in the application
or attachments must be grave or refer to significant matters. The details as to how the alleged fraud was committed
must also be indubitably shown.

The records of this case reveal no deliberate or malicious intent to commit misrepresentation on the part of Samahan.
The use of such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and by-
laws did not constitute misrepresentation so as to warrant the cancellation of Samahan's certificate of registration.
Hanjin failed to indicate how this phrase constitutes a malicious and deliberate misrepresentation. Neither was there
any showing that the alleged misrepresentation was serious in character. Misrepresentation is a devious charge that
cannot simply be entertained by mere surmises and conjectures.

Even granting arguendo that Samahan's members misrepresented themselves as employees or workers of Hanjin, said
misrepresentation does not relate to the adoption or ratification of its constitution and by-laws or to the election of its
officers.

Removal of the word "Hanjin Shipyard" from the association's name, however, does not infringe on Samahan's right to
self-organization

Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in the name of the association. A
legitimate workers' association refers to an association of workers organized for mutual aid and protection of its
members or for any legitimate purpose other than collective bargaining registered with the DOLE.59 Having been granted
a certificate of registration, Samahan's association is now recognized by law as a legitimate workers' association.

According to Samahan, inherent in the workers' right to self-organization is its right to name its own organization. It
seems to equate the dropping of words "Hanjin Shipyard" from its name as a restraint in its exercise of the right to self-
organization. Hanjin, on the other hand, invokes that "Hanjin Shipyard" is a registered trade name and, thus, it is within
their right to prohibit its use.

As there is no provision under our labor laws which speak of the use of name by a workers' association, the Court refers
to the Corporation Code, which governs the names of juridical persons. Section 18 thereof provides:

No corporate name may be allowed by the Securities and Exchange Commission if the proposed name
is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already
protected by law or is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name
is approved, the Commission shall issue an amended certificate of incorporation under the amended name.

[Emphases Supplied]

The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of fraud upon the public which would have occasion to deal
with the entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration
and supervision over corporations.60

For the same reason, it would be misleading for the members of Samahan to use "Hanjin Shipyard" in its name as it
could give the wrong impression that all of its members are employed by Hanjin.

Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:

The change of name of a labor organization shall not affect its legal personality. All the rights and obligations of a labor
organization under its old name shall continue to be exercised by the labor organization under its new name.

Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of Samahan's right to self-
organization was committed.

WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the January 28, 2014 Resolution of the
Court of Appeals are hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution of the Bureau of Labor
Relations, as modified by its November 28, 2011 Resolution, is REINSTATED.

SO ORDERED.chanroblesvirtuallawlibrary
Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

SAMAHANG MANGGAGAWA SA G.R. No. 169717

CHARTER CHEMICAL SOLIDARITY

OF UNIONS IN THE PHILIPPINES

FOR EMPOWERMENT AND Present:

REFORMS (SMCC-SUPER),

ZACARRIAS JERRY VICTORIO CORONA, C.J., Chairperson,

Union President, VELASCO, JR.,

Petitioner, LEONARDO-DE CASTRO,

DEL CASTILLO, and

- versus - PEREZ, JJ.

CHARTER CHEMICAL AND

COATING CORPORATION, Promulgated:

Respondent. March 16, 2011

x--------------------------------------------------------x

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 Decision[1] in
CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision[2] of the Department of Labor and
Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution[3] 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 Dismiss[4] 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 Decision[6] 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 Code[7] 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 Decision[8] 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 Med-Arbiter, 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

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 Union[14] 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. 9481[16] 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 regulations[19] 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-laws[26] 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 rank-and-file employees. Under Article 245[27] 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 Union[28] (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 descriptions[29] 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 co-mingling 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 rank-and-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 twenty-seven (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 Union-PGTWO 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 Union-FFW, 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-and-file 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-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.
No pronouncement as to costs.

SO ORDERED.
Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

SAN MIGUEL FOODS, INCORPORATED, G.R. No. 146206

Petitioner,

Present:

CARPIO,* J.,

VELASCO, J., Chairperson,

-versus- PERALTA,

ABAD, and

SERENO,**JJ.

SAN MIGUEL CORPORATION SUPERVISORS


and EXEMPT UNION,
Promulgated:
Respondent.

August 1, 2011

x---------------------------------------------------------------------------------x

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 Order[5] 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 23 23 46

No 0 0 0

Spoiled 2 0 2

Segregated 41 35 76

Total Votes

Cast 66 58 124
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) non-SMFI 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 Resolution[11] 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 Order[13] 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 Resolution[14] 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 Reconsideration[15] dated August 14, 1999 was denied by the then Acting DOLE
Undersecretary in the Order[16] dated August 27, 1999.

In the Decision[17] 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 Reconsideration[18] dated May 23, 2000 was denied by the CA in the Resolution[19] 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. 110399[20] 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 Otis[25] 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 245[30] 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.[33]

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 258[39] 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.
THIRD DIVISION

March 15, 2017

G.R. No. 192648

DE OCAMPO MEMORIAL SCHOOLS, INC., Petitioner


vs
BIGKIS MANGGAGAWA SA DE OCAMPO MEMORIAL SCHOOL, INC. , Respondent

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 assailing the Court of Appeals (CA) Decision2 dated July 15, 2009 and the
Resolution3 dated June 21, 2010 (assailed Decision). The assailed Decision affirmed the Decision4 dated December 29,
2004 of the Bureau of Labor Relations (BLR), Department of Labor and Employment (DOLE) in Case No. BLR-A-C-75-8-
24-04, In Re: Petition for Cancellation of Union Registration of Bigkis Manggagawa sa De Ocampo Memorial School,
Inc., - Lakas Union Registration Number (NCR-12-CC-002-2003).

De Ocampo Memorial Schools, Inc. (De Ocampo) is a domestic corporation duly-organized and existing under the laws of
the Philippines. It has two main divisions, namely: De Ocampo Memorial Medical Center (DOMMC), its hospital entity,
and the De Ocampo Memorial Colleges (DOMC), its school entity.5

On September 26, 2003, Union Registration No. NCR-UR-9-3858- 2002 was issued in favor of Bigkis Manggagawa sa De
Ocampo Memorial Medical Center - LAKAS (BMDOMMC).6

Later, on December 5, 2003, Bigkis Manggagawa sa De Ocampo Memorial School, Inc. (BMDOMSI) was issued a Union
Registration/Certificate of Creation of Local Chapter No. NCR-l 2-CC-002- 2003 and declared a legitimate labor
organization.7

On March 4, 2004, De Ocampo filed a Petition for Cancellation of Ce1iificate of Registration8 with the Department of
Labor and Employment - National Capital Region (DOLE-NCR). It sought to cancel the Certificate of Registration of
BMDOMSI on the following grounds: 1) misrepresentation, false statement and fraud in connection with its creation and
registration as a labor union as it shared the same set of officers and members with BMDOMMC; 2) mixed membership
of rank-and-file and managerial/supervisory employees; and 3) inappropriate bargaining unit.9

On April 13, 2004, De Ocampo filed a Supplemental Petition,10 informing the DOLE-NCR of the cancellation of the
Certificate of Registration of BMDOMMC in Case No. NCR-OD-0307-009-LRD. It attached a copy of the Decision11of the
DOLE-NCR dated March 3, 2004, which cancelled and struck off Union Registration No. NCR-UR-9-3858- 2002 from the
registry of legitimate labor organizations for being an inappropriate bargaining unit.12

On May 18, 2004, BMDOMSI filed its Comment-Opposition to Petition for Cancellation of Certificate of Registration and
Supplemental Petition,13 denying De Ocampo's allegations and claiming that the latter only wants to impede the
formation of the union.

In a Decision14 dated July 26, 2004, Acting Regional Director Ciriaco A. Lagunzad III of the DOLE-NCR ruled that BMDOMSI
committed misrepresentation by making it appear that the bargaining unit is composed of faculty and technical
employees. In fact, all the union officers and most of the members are from the General Services
Division.15 Furthermore, the members of the union do not share commonality of interest, as it is composed of academic
and non-academic personnel.16 The nature of work of the employees of the General Services Division, while falling
within the category of non-academic personnel, differs from that of the other nonacademic employees composed of
clerks, messengers, etc., since they also serve the hospital component of De Ocampo.17

BMDOMSI then filed an appeal to the BLR alleging that the union members are all employees of De Ocampo and that the
bargaining unit it sees to represent is appropriate.18

In a Decision19 dated December 29, 2004, the BLR reversed the Regional Director's finding of misrepresentation, false
statement or fraud in BMDOMSI's application for registration. According to the BLR, De Ocampo failed to adduce proof
to support its allegation of mixed membership within respondent union.20 Further, and contrary to De Ocampo's claim,
records show that BMDOMSI stated in its application that its members are composed of rank-and-file employees falling
under either faculty or technical occupational classifications.21 The BLR also held that the existence of an inappropriate
bargaining unit would not necessarily result in the cancellation of union registration, and the inclusion of a disqualified
employee in a union is not a ground for cancellation.22 Even if BMDOMSI shared the same set of officers and members of
BMDOMMC, the latter had already been delisted on March 3, 2004 and there is no prohibition against organizing
another union.23

De Ocampo filed a Petition for Certiorari24 with the CA seeking to annul and set aside the BLR Decision as well as the
Resolution25 dated January 24, 2005 denying its motion for reconsideration.

The CA affirmed the Decision of the BLR. It ruled that there was no misrepresentation, false statement or fraud in the
application for registration.

The record shows that, as BMDOMSI had indicated, the bargaining unit as described is composed of rank-and-file
employees with occupational classifications under technical and faculty.26 The CA found that there could be no
misrepresentation as the members appearing in the minutes of the general membership meeting, and the list of
members who attended the meeting and ratified the union constitution and by-laws, are in truth employees of the
school, though some service the hospital.27 The CA also ruled that, other than De Ocampo's bare allegations, there was
no proof of intent to defraud or mislead on the part of BMDOMSI. Hence, the charge of fraud, false statement or
misrepresentation cannot be sustained.28

However, the CA observed that the members of the union, who are from academic, non-academic, and general services,
do not perform work of the same nature, receive the same wages and compensation, nor share a common stake in
concerted activities.29 While these factors dictate the separation of the categories of employees for purposes of
collective bargaining,30 the CA reasoned that such lack of mutuality and commonality of interest of the union members is
not among the grounds for cancellation of union registration under Article 239 of the Labor Code.31

De Ocampo filed a motion for reconsideration which was denied in the assailed Resolution dated June 21, 2010. Hence,
this petition.

De Ocampo maintains that BMDOMSI committed misrepresentation and fraud in connection with its application,
creation and registration. It intentionally suppressed the fact that at the time of its application, there was another union
known as BMDOMMC, with whom they shared the same set of officers and members.32 It was also made to appear that
BMDOMMC is a labor union representing a separate bargaining unit whose personality, affairs and composition are
unknown to BMDOMSI.33 Lastly, BMDOMSI suppressed the fact that its members have no mutuality or commonality of
interest as they belong to different work classifications, nature and designations.34

II
We deny the petition.

Article 247, previously Aiiicle 239 of the Labor Code35 provides:

Art. 247. 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.

For fraud and misrepresentation to constitute grounds for cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of
union members.36

De Ocampo insists that "by conveniently disregarding" BMDOMMC's existence during the filing of its application, despite
having the same set of officers and members,37 BMDOMSI "had misrepresented facts, made false statements and
committed fraud in its application for union registration for alleging facts therein which they [know] or ought to have
known to be false."38

We agree with the BLR and the CA that BMDOMSI did not commit fraud or misrepresentation in its application for
registration.1âwphi1 In the form "Report of Creation of Local Chapter"39 filed by BMDOMSI, the applicant indicated in
the portion "Description of the Bargaining Unit" that it is composed of "Rank and File" and under the "Occupational
Classification," it marked "Technical" and "Faculty."

Further, the members appearing in the Minutes of the General Membership and the List of Workers or Members who
attended the organizational meeting and adopted/ratified the Constitution and By-Laws are, as represented, employees
of the school and the General Services Division, though some of the latter employees service the hospital.40

Moreover, there is nothing in the form "Report of Creation of Local Chapter" that requires the applicant to disclose the
existence of another union, much less the names of the officers of such other union. Thus, we cannot see how
BMDOMSI made the alleged misrepresentation or false statements in its application.

De Ocampo likewise claims that BMDOMSI committed fraud and misrepresentation when it suppressed the fact that
there exists "no mutuality and/or communality of interest"41 of its members. This, De Ocampo asserts, is a ground for
the cancellation of its registration.

We disagree.

While the CA may have ruled that there is no mutuality or commonality of interests among the members of BMDOMSI,
this is not enough reason to cancel its registration. The only grounds on which the cancellation of a union's registration
may be sought are those found in Article 247 of the Labor Code. In Tagaytay Highlands International Golf Club
Incorporated v. Tagaytay Highlands Employees Union-PTGW0,42 we ruled that "[t]he inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections (a) and (c) of Article [247] x x x of the Labor Code."43 Thus, for
purposes of de-certifying a union, it is not enough to establish that the rank-and-file union includes ineligible employees
in its membership. Pursuant to paragraphs (a) and (b) of Article 247 of the Labor Code, it must be shown that there was
misrepresentation, false statement or fraud in connection with: (1) the adoption or ratification of the constitution and
by-laws or amendments thereto; (2) the minutes of ratification; (3) the election of officers; (4) the minutes of the
election of officers; and (5) the list of voters.44 Failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR may also constitute grounds for cancellation, lack of
mutuality of interests, however, is not among said grounds.45

The BLR and the CA's finding that the members of BMDOMSI are rank-and-file employees is supported by substantial
evidence and is binding on this Court.46 On the other hand, other than the allegation that BMDOMSI has the same set of
officers with BMDOMMC and the allegation of mixed membership of rank-and-file and managerial or supervisory
employees, De Ocampo has cited no other evidence of the alleged fraud and misrepresentation.

A final word. A party seeking the cancellation of a union's certificate of registration must bear in mind that:

x x x [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.47

WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No.
89162 dated July 15, 2009 is AFFIRMED.

SO ORDERED.
FIRST DIVISION

GR. NO. 218454, December 01, 2016

PENINSULA EMPLOYEES UNION (PEU),* Petitioner, v. MICHAEL B. ESQUIVEL, DOMINGO G. MABUTAS, RANDELL V.
AFAN, LOISELLE S. AGUNOD, GEMELO L. ANSELMO, GERYMY ANCHETA, JOYLY V. ASUNCION, CRESENCIA A. BERMEJO,
JOSHUA S. BERSAMINA, LITO S. CALINISAN, RANULFO C. CASTILLO, ENRICO C. CASTRO, GERARDO R. CASTRO,
GLICERIA H. CELIZ, MARIA POLA R CORDERO, JORGE MARIO C. CORONADO, DOMINGA C. CRUZ, JUSTINE CRUZ,
RONALD S. DADIA, ARCHIMEDES S. DALISAY, JOSEF PATRICK P. DE VERA, SERGIO B. DIANE, NONITA M. DOMINGO,
JOSELITO E. EDANG, KRISTINE ANNE A. ENGRACIAL, CARLO GILJOSEF A. FORNIER, ELIAS S. GACAD, MEL GARRIDO,
PHILLIP MICHAEL C. GAUDINEZ, SILVERIA B. GRAN, RODOR D. HEMEDES, BENIGNO A. HONGCO, LEONARD N. LAMBOT,
MELECIO D. LAURENTE III, GRACE MILLISCEN L. LIM, MARIA ALICIA GEZZA D. LLAVE, EULALIA B. LOBATON, WILFREDO
G. LOPEZ, GENLIE D. LUCERNA, DOMINGO C. MABUTAS III, CARMELITA A. MALIG, NICANOR T. MANGUIAT, HERVE
STEVE A. MARTIN, RODELIO N. MARZO, FLORENCIO A. MASA, JR., EDINA H. MORALES, SYLVIA M. MORALES, ROBERT
H. NACINO, ANGELO F. ONA, JEFFERSON 0. ONG, DENNIS 0. RAMOS, DENNIS S. REMBULAT, BENJIE B. REYES, VICTOR
EMMANUEL I. REYES, ANTONIO R. RIOVEROS, MARCELO S. RIPA III, ALLAN T. ROXAS, MARIA B. RUANTO II, RONALD A.
SALMON, ARMANDO P. SANTUYO, BRYAN S. SUN, MARYGRACE F. TAMAYO, LORENZVI IRENE U. TAN, MILAGROS 0.
TELOSA, HERMILO R. TUMBAGA, GINA S. UY, AND VENICE T. VILLAPONDO, Respondents.

DECISION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari 1 assailing the Decision2 dated February 9, 2015 and the
Resolution3 dated May 21, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 124566, which annulled and set aside the
Order4 dated March 6, 2012 (March 6, 2012 Order) of the Office of the Secretary (OSEC) of the Department of Labor and
Employment (DOLE) in OS-AJ-0024-07 declaring petitioner Peninsula Employees Union (PEU) National Union of Workers
in Hotel Restaurants and Allied Industries (NUWHRAIN)5 entitled to collect the amount of two percent (2%) agency fees
from The Peninsula Manila Hotel Labor Union (TPMHLU), the former collective bargaining agent,6 and the non-affiliated
employees (NAE;7 collectively, non-PEU members), herein represented by respondents Michael B. Esquivel, Domingo G.
Mabutas, Randell V. Afan, et al. (respondents), retroactively from July 2010.chanroblesvirtuallawlibrary

The Facts

On December 13, 2007, PEU's Board of Directors passed Local Board Resolution No. 12, series of
20078authorizing (a) the affiliation of PEU with NUWHRAIN, and the direct membership of its individual members
thereto; (b) the compliance with all the requirements therefor; and (c) the Local President to sign the affiliation
agreement with NUWHRAIN upon acceptance of such affiliation.9 On the same day, the said act was submitted to the
general membership, and was duly ratified by 223 PEU members.10

Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union dues/agency fees from one percent (1%) to
two percent (2%) of the rank and file employees' monthly salaries, brought about by PEU's affiliation with NUWHRAIN,
which supposedly requires its affiliates to remit to it two percent (2%) of their monthly salaries.11

Meanwhile, in a Decision12 dated October 10, 2008 (October 10, 2008 Decision), the OSEC resolved the collective
bargaining deadlock between PEU-NUWHRAIN and The Peninsula Manila Hotel (Hotel), ordering the parties to execute a
collective bargaining agreement (CBA) incorporating the dispositions therein (arbitral award).13 The parties have yet to
actually sign a CBA but have, for the most part, implemented the arbitral award.14

In March 2009, PEU-NUWHRAIN requested15 the OSEC for Administrative Intervention for Dispute Avoidance16 (AIDA)
pursuant to DOLE Circular No. 1, series of 200617 in relation to the issue, among others, of its entitlement to collect
increased agency fees from the non-PEU members,18 which was docketed as OSEC-AIDA-03-001-09.19

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the new CBA is
unenforceable since no written CBA has been formally signed and executed by PEU-NUWHRAIN and the Hotel; (b) the
2% agency fee is exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory
requirements for such increase.20

The OSEC's Ruling

In a Decision21 dated June 2, 2010 (June 2, 2010 Decision), the OSEC upheld PEU-NUWHRAIN's right to collect agency
fees from the non-PEU members in accordance with Article 4, Section 2 of the expired CBA, which was declared to be in
full force and effect pursuant to the October 10, 2008 Decision, but only at the rate of one percent (1%),22 and denied its
bid to increase the agency fees to two percent (2%) for failure to show that its general membership approved the same,
noting that: (a) the October 28, 2008 General Membership Resolution23 (GMR) submitted in support of the claimed
increase dealt with the approval of the payment of attorney's fees from the CBA backwages, without reference to any
approval of the increase in union dues; and (b) the minutes24 of its October 28, 2008 general membership meeting
(October 28, 2008 minutes) merely stated that there was a need to update the individual check-off authorization to
implement the two percent (2%) union dues, but was silent as to any deliberation and formal approval thereof.25 The
OSEC pointed out that the only direct proof presented for the claimed increase in union dues was the PEU President's
application for union membership with PEU-NUWHRAIN26 dated October 29, 2008, together with his Individual Check-
Off Authorization27 purportedly dated May 11, 2008, which precedes such application and, thus, cannot be given
credence.28

Dissatisfied, PEU-NUWHRAIN moved for reconsideration,29 attaching thereto copies of: (a) the July 1, 2010
GMR30 confirming and affirming the alleged approval of the deduction of two percent (2%) union dues from the
members' monthly basic salaries; (b) the individual check-off authorizations31 dated November 26 and 27, 2008 from
three (3) members authorizing the deduction of two percent (2%) union dues from their monthly basic salaries;
and (c) payslips32 of some PEU-NUWHRAIN members purportedly showing the deduction of two percent (2%) union dues
from their monthly basic pay beginning January 2009.

On March 6, 2012, the OSEC issued an Order33 partially granting PEU-NUWHRAIN's motion for reconsideration, and
declaring it entitled to collect two percent (2%) agency fees from the non-PEU members beginning July 2010 since the
GMR showing approval for the increase of the union dues from one percent (1%) to two percent (2%) was only procured
at that time.34

Unperturbed, respondents filed a petition for certiorari35 with the CA, docketed as CA-GR. SP No. 124566, alleging that
the OSEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in allowing PEU-NUWHRAIN to
collection increased agency fees despite non-compliance with the legal requirements therefor.36

The CA Ruling
In a Decision37 dated February 9, 2015, the CA set aside the OSEC's March 6, 2012 Order, and reinstated the June 2, 2010
Decision.38 It ruled that PEU-NUWHRAIN failed to prove compliance with the requisites for a valid check-off since the
October 28, 2008 minutes do not show that the increase in union dues was duly approved by its general membership. It
also found the July 1, 2010 GMR suspicious considering that it surfaced only after PEU received the OSEC's June 2, 2010
Decision disallowing the collection of increased agency fees.39

PEU-NUWHRAIN moved for reconsideration,40 which was, however, denied in a Resolution41 dated May 21, 2015; hence,
the present petition.chanroblesvirtuallawlibrary

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA committed reversible error in ruling that PEU-
NUWHRAIN had no right to collect the increased agency fees.chanroblesvirtuallawlibrary

The Court's Ruling

The petition lacks merit.

The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the right to
collect a reasonable fee called "agency fee" from non-union members who are employees of the appropriate bargaining
unit, in an amount equivalent to the dues and other fees paid by union members, in case they accept the benefits under
the CBA.42 While the collection of agency fees is recognized by Article 25943 (formerly Article 248) of the Labor Code, as
amended, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that non-union employees may not unjustly enrich themselves by benefiting from
employment conditions negotiated by the bargaining union.44

In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed. However, the rate of agency fees it
seeks to collect from the non-PEU members is contested, considering its failure to comply with the requirements for a
valid increase of union dues, rendering the collection of increased agency fees unjustified.

Case law interpreting Article 250 (n) and (o)45 (formerly Article 241) of the Labor Code, as amended, mandates the
submission of three (3) documentary requisites in order to justify a valid levy of increased union dues. These are: (a) an
authorization by a written resolution of the majority of all the members at the general membership meeting duly called
for the purpose; (b) the secretary's record of the minutes of the meeting, which shall include the list of all members
present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or
fees;46 and (c) individual written authorizations for check-off duly signed by the employees concerned.47

In the present case, however, PEU-NUWHRAIN failed to show compliance with the foregoing requirements. It attempted
to remedy the "inadvertent omission" of the matter of the approval of the deduction of two percent (2%) union dues
from the monthly basic salary of each union member through the July 1, 2010 GMR,48 entitled "A GENERAL
MEMBERSHIP RESOLUTION AUTHORIZING THE DEDUCTION OF TWO PERCENT (2%) UNION DUES FROM THE MONTHLY
BASIC SALARY OF EACH UNION MEMBER," which stated, among others, that:chanRoblesvirtualLawlibrary
1. the General Membership Assembly (Assembly) "approved the deduction of two percent (2%) union dues from
the monthly basic salary of each union member" during its 8th General Membership Meeting, as shown in the
October 28, 2008 minutes;ChanRoblesVirtualawlibrary

2. "through inadvertence, the [October 28, 2008 GMR] failed to include the Assembly's approval of the two
percent (2%) deduction of union dues;"

3. the July 1, 2010 GMR is being issued "to confirm and affirm what was agreed upon during the 8th General
Membership Meeting dated October 28, 2008."49

On the other hand, the adverted October 28, 2008 minutes50 stated, inter alia, that:chanRoblesvirtualLawlibrary

1. "the [two percent (2%)] Union dues will have to be implemented since PEU was already affiliated with
NUWHRAIN [in] 2007";51]

2. "it was discussed, deliberated and approved by the majority of members the (sic) 10% of total CBA back wages
through [the Assembly] resolution authorizing the payment of attorney's fees."52

It is evident from the foregoing that while the matter of implementing the two percent (2%) union dues was taken up
during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was no sufficient showing
that the same had been duly deliberated and approved. The minutes of the Assembly itself belie PEU-NUWHRAIN's claim
that the increase in union dues and the corresponding check-off were duly approved since it merely stated that "the
[two percent (2%)] Union dues will have to be implemented,"53 meaning, it would still require the submission of such
matter to the Assembly for deliberation and approval Such conclusion is bolstered by the silence of the October 28, 2008
GMR on the matter of two percent (2%) union dues, in contrast to the payment of 10% attorney's fees from the CBA
backwages which was clearly spelled out as having been "discussed and approved."54 Thus, as aptly pointed out by the
CA: "[i]f indeed majority of the members of [PEU-NUWHRAIN] approved the increase in union dues, the same should
have been mentioned in the [October 28, 2008 minutes], and reflected in the GMR of the same date."55

Having failed to establish due deliberation and approval of the increase in union dues from one percent (1%) to two
percent (2%), as well as the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's 8th General
Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1, 2010 GMR.
Contrary to the ruling of the OSEC in its March 6, 2012 Order, the July 1, 2010 GMR, by itself, cannot justify the
collection of two percent (2%) agency fees from the non-PEU members beginning July 2010. The Assembly was not
called for the purpose of approving the proposed increase in union dues and the corresponding check-off, but merely to
"confirm and affirm" a purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the submission of the November 2008
check-off authorizations56 becomes inconsequential. Jurisprudence states that the express consent of the employee to
any deduction in his compensation is required to be obtained in accordance with the steps outlined by the law, which
must be followed to the letter;57 however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is
no legal basis to impose union dues and agency fees more than that allowed in the expired CBA, i.e., at one percent (1%)
of the employee's monthly basic salary.

In fine, the Court finds no reversible error on the part of the CA in granting petitioner's certiorari petition, and finding
that the OSEC gravely abused its discretion in declaring PEU-NUWHRAIN's entitlement to collect two percent (2%)
agency fees from the non-PEU members beginning July 2010. The OSEC's March 6, 2012 Order is patently contrary to
law, hence, imbued with grave abuse of discretion correctible through certiorari.58
WHEREFORE, the petition is DENIED. The Decision dated February 9, 2015 and the Resolution dated May 21, 2015 of the
Court of Appeals (CA) in CA-G.R. SP No. 124566 are hereby AFFIRMED.

SO ORDERED.ChanRoblesVirtualawlibrary

FIRST DIVISION

November 21, 2016

G.R. No. 193816

ERSON ANG LEE DOING BUSINESS as "SUPER LAMINATION SERVICES," Petitioner


vs.
SAMAHANG MANGGAGAWA NG SUPER LAMINATION (SMSLS-NAFLU-KMU), Respondent

DECISION

SERENO, CJ.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court on the Decision1 and Resolution2 of the
Court of Appeals (CA) affirming the assailed Decision3 of the Department of Labor and Employment (DOLE). DOLE
allowed the conduct of certification election among the rank-and-file employees of Super Lamination Services (Super
Lamination), Express Lamination Services, Inc. (Express Lamination), and Express Coat Enterprises, Inc. (Express Coat).

THE ANTECEDENT FACTS

Petitioner Erson Ang Lee (petitioner), through Super Lamination, is a duly registered entity principally engaged in the
business of providing lamination services to the general public. Respondent Samahan ng mga Manggagawa ng Super
Lamination Services (Union A) is a legitimate labor organization, which is also a local chapter affiliate of the National
Federation of Labor Unions - Kilusang Mayo Uno.4 It appears that Super Lamination is a sole proprietorship under
petitioner's name,5 while Express Lamination and Express Coat are duly incorporated entities separately registered with
the Securities and Exchange Commission (SEC).6
On 7 March 2008, Union A filed a Petition for Certification Election7 to represent all the rank-and-file employees of Super
Lamination.8

Notably, on the same date, Express Lamination Workers' Union (Union B) also filed a Petition for Certification Election to
represent all the rank-and-file employees of Express Lamination.9

Also on the same date, the Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc. (Union C) filed a Petition for
Certification Election to represent the rank-and-file employees of Express Coat.10

Super Lamination, Express Lamination, and Express Coat, all represented by one counsel, separately claimed in their
Comments and Motions to Dismiss that the petitions must be dismissed on the same ground - lack of employer-
employee relationship between these establishments and the bargaining units that Unions A, B, and C seek to represent
as well as these unions' respective members.11 Super Lamination, in its Motion, posited that a majority of the persons
who were enumerated in the list of members and officers of Union A were not its employees, but were employed by
either Express Lamination or Express Coat.12 Interestingly, both Express Lamination and Express Coat, in turn,
maintained the same argument - that a majority of those who had assented to the Petition for Certification Election
were not employees of either company, but of one of the two other companies involved.13

All three Petitions for Certification Election of the Unions were denied. On 21 May 2008, an Order was issued by DOLE
National Capital Region (NCR) Med-Arbiter Michael Angelo Parado denying the respective petitions of Unions B and C on
the ground that there was no existing employer-employee relationship between the members of the unions and the
companies concerned. On 23 May 2008, DOLE NCR Med-Arbiter Alma Magdaraog-Alba also denied the petition of
respondent Union A on the same ground.14

The three unions filed their respective appeals before the Office of the DOLE Secretary, which consolidated the appeal
because the involved companies alternately referred to one another as the employer of the members of the bargaining
units sought to be represented.15 The unions argued that their petitions should have been allowed considering that the
companies involved were unorganized, and that the employers had no concomitant right to oppose the petitions. They
also claimed that while the questioned employees might have been assigned to perform work at the other companies,
they were all under one management's direct control and supervision.16

DOLE, through Undersecretary Romeo C. Lagman, rendered the assailed Decision, the dispositive portion of which reads
as follows:

WHEREFORE, premises considered, the appeals filed by Express Lamination Workers Union (ELWU-NAFLU-KMU),
Samahang Manggagawa ng Express Coat Enterprises, Inc. (SMEC-NAFLU-KMU) and Samahang Manggagawa ng Super
Lamination Services (SMSLS-NAFLU-KMU) are hereby GRANTEDand the Orders dated 21 May 2008 of DOLE-NCR
Mediator-Arbiter Michael Angelo T. Parado are hereby REVERSED and SET ASIDE. The Order dated 23 May 2008 of DOLE
NCR Mediator-Arbiter Alma E. Magdaraog-Alba is likewise REVERSED and SET ASIDE.

Accordingly, let the entire records of this be remanded to the regional office of origin for the immediate conduct of
certification election among the rank-and-file employees of Express Lamination Services, Inc., Super Lamination Services
and Express Coat Enterprises Inc., after the conduct of pre-election conference/s, with the following as choices;

1. Express Lamination Workers Union-NAFLU-KMU;

2. Samahan ng mga Manggagawa ng Super Lamination Services-NAFLU-KMU;

3. Samahang ng mga Manggagawa ng Express Coat Enterprises, Inc.-NAFLU-KMU; and


4. "No Union."

The employer/s and/or contending union(s) are hereby directed to submit to the Regional Office of origin, within ten
(10) days from receipt of this Decision, a certified list of employees in the bargaining unit or the payrolls covering the
members of the bargaining unit for the last three (3) months prior to the issuance of the Decision.

SO DECIDED.17 (Emphases in the original)

DOLE found that Super Lamination, Express Lamination, and Express Coat were sister companies that had a common
human resource department responsible for hiring and disciplining the employees of the three companies. The same
department was found to have also given them daily instructions on how to go about their work and where to report for
work. It also found that the three companies involved constantly rotated their workers, and that the latter's
identification cards had only one signatory.18

To DOLE, these circumstances showed that the companies were engaged in a work-pooling scheme, in light of which
they might be considered as one and the same entity for the purpose of determining the appropriate bargaining unit in a
certification election.19 DOLE applied the concept of multi-employer bargaining under Sections 5 and 6 of DOLE
Department Order 40-03, Series of 2003. Under that concept, the creation of a single bargaining unit for the rank-and-
file employees of all three companies was not implausible and was justified under the given circumstances.20 Thus, it
considered these rank-and-file employees as one bargaining unit and ordered the conduct of a certification election as
uniformly prayed for by the three unions.

Aggrieved, petitioner instituted an appeal before the CA, which denied his Petition and affirmed the Decision of
DOLE.1âwphi1 It sided with DOLE in finding that Super Lamination, Express Lamination, and Express Coat were sister
companies that had adopted a work-pooling scheme. Therefore, it held that DOLE had correctly applied the concept of
multi-employer bargaining in finding that the three companies could be considered as the same entity, and their rank-
and-file employees as comprising one bargaining unit.21

Petitioner filed a Motion for Reconsideration of the CA Decision, but the motion was denied.22 Therefore, he now comes
to this Court through the present Petition.

ISSUES

From the established facts and arguments, we cull the issues as follows:

1. Whether the application of the doctrine of piercing the corporate veil is warranted

2. Whether the rank-and-file employees of Super Lamination, Express Lamination, and Express Coat constitute an
appropriate bargaining unit

THE COURT'S RULING

We deny the petition.


An application of the doctrine of
piercing the corporate veil is
warranted.

Petitioner argues that separate corporations cannot be treated as a single bargaining unit even if their businesses are
related,23 as these companies are indubitably distinct entities with separate juridical personalities.24 Hence, the
employees of one corporation cannot be allowed to vote in the certification election of another corporation, lest the
abovementioned rule be violated.25
Petitioner's argument, while correct, is a general rule. This Court has time and again disregarded separate juridical
personalities under the doctrine of piercing the corporate veil. It has done so in cases where a separate legal entity is
used to defeat public convenience, justify wrong, protect fraud, or defend crime, among other grounds.26 In any of these
situations, the law will regard it as an association of persons or, in case of two corporations, merge them into one.27

A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned,
conducted, and controlled by the same parties, both law and equity will, when necessary to protect the rights of third
parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the
same.28

This formulation has been applied by this Court to cases in which the laborer has been put in a disadvantageous position
as a result of the separate juridical personalities of the employers involved.29 Pursuant to veil-piercing, we have held two
corporations jointly and severally liable for an employee's back wages.30 We also considered a corporation and its
separately-incorporated branches as one and the same for purposes of finding the corporation guilty of illegal
dismissal.31 These rulings were made pursuant to the fundamental doctrine that the corporate fiction should not be used
as a subterfuge to commit injustice and circumvent labor laws.32

Here, a certification election was ordered to be held for all the rank-and- file employees of Super Lamination, Express
Lamination, and Express Coat.1âwphi1 The three companies were supposedly distinct entities based on the fact that
Super Lamination is a sole proprietorship while Express Lamination and Express Coat were separately registered with the
SEC.33 The directive was therefore, in effect, a piercing of the separate juridical personalities of the corporations
involved. We find the piercing to be proper and in accordance with the law as will be discussed below.

The following established facts show that Super Lamination, Express Lamination, and Express Coat are under the control
and management of the same party - petitioner Ang Lee. In effect, the employees of these three companies have
petitioner as their common employer, as shown by the following facts:

1. Super Lamination, Express Lamination, and Express Coat were engaged in the same business of providing lamination
services to the public as admitted by petitioner in his petition.34

2. The three establishments operated and hired employees through a common human resource department as found by
DOLE in a clarificatory hearing.35 Though it was not clear which company the human resource department was officially
attached to, petitioner admits in his petition that such department was shared by the three companies for purposes of
convenience.36

3. The workers of all three companies were constantly rotated and periodically assigned to Super Lamination or Express
Lamination or Express Coat to perform the same or similar tasks.37 This finding was further affirmed when petitioner
admitted in his petition before us that the Super Lamination had entered into a work-pooling agreement with the two
other companies and shared a number of their employees.38

4. DOLE found and the CA affirmed that the common human resource department imposed disciplinary sanctions and
directed the daily performance of all the members of Unions A, B, and C.39

5. Super Lamination included in its payroll and SSS registration not just its own employees, but also the supposed
employees of Express Lamination and Express Coat. This much was admitted by petitioner in his Motion to
Dismiss40 which was affirmed by the Med-Arbiter in the latter's Order.41

6. Petitioner admitted that Super Lamination had issued and signed the identification cards of employees who were
actually working for Express Lamination and Express Coat.42
7. Super Lamination, Express Lamination, and Express Coat were represented by the same counsel who interposed the
same arguments in their motions before the Med-Arbiters and DOLE.43

Further, we discern from the synchronized movements of petitioner and the two other companies an attempt to
frustrate or defeat the workers' right to collectively bargain through the shield of the corporations' separate juridical
personalities. We make this finding on the basis of the motions to dismiss filed by the three companies. While similarly
alleging the absence of an employer-employee relationship, they alternately referred to one another as the employer of
the members of the bargaining units sought to be represented respectively by the unions. This fact was affirmed by the
Med-Arbiters' Orders finding that indeed, the supposed employees of each establishment were found to be alternately
the employees of either of the two other companies as well. This was precisely the reason why DOLE consolidated the
appeals filed by Unions A, B, and C.44

Due to the finger-pointing by the three companies at one another, the petitions were dismissed. As a result, the three
unions were not able to proceed with the conduct of the certification election. This also caused confusion among the
employees as to who their real employer is, as Union A claims in its Comment.45

We hold that if we allow petitioner and the two other companies to continue obstructing the holding of the election in
this manner, their employees and their respective unions will never have a chance to choose their bargaining
representative. We take note that all three establishments were unorganized. That is, no union therein was ever duly
recognized or certified as a bargaining representative.46

Therefore, it is only proper that, in order to safeguard the right of the workers and Unions A, B, and C to engage in
collective bargaining, the corporate veil of Express Lamination and Express Coat must be pierced. The separate existence
of Super Lamination, Express Lamination, and Express Coat must be disregarded. In effect, we affirm the lower tribunals
in ruling that these companies must be treated as one and the same unit for purposes of holding a certification election.

Petitioner has cited Diatagon Labor Federation Local v. Ople47 and lndophil Textile Mill Worker Union v. Calica48 in which
this Court refused to treat separate corporations as a single bargaining unit. Those cases, however, are not substantially
identical with this case and would not warrant their application herein. Unlike in the instant case, the corporations
involved were found to be completely independent or were not involved in any act that frustrated the laborers' rights.

In Diatagon,49 we refused to include the 236 employees of Georgia Pacific International Corporation in the bargaining
unit of the employees of Liangga Bay Logging Co., Inc. This Court's refusal was in light of the fact that the two
corporations were indubitably distinct entities with separate corporate identities and origins. Moreover, there was no
discernible attempt to frustrate any of their labor-related rights, as the only conflict was over which bargaining unit they
belonged to.

In Indophil,50 this Court refused to pierce the corporate veil of Indophil Textile Mill and Indophil Acrylic Manufacturing.
We found that the creation of Indophil Acrylic was not a device to evade the application of the collective bargaining
agreement (CBA) between petitioner union and Indophil Textile Mill. This Court further found that despite the similarity
in their business operations, the separate personalities of the two corporations were maintained and were not used for
any of the purposes specified under the law that would warrant piercing. It is also apparent in this case that the workers'
rights were not being hampered by the employers concerned, as the only issue between them was the extent of the
subject CBA's application.

In this case, not only were Super Lamination, Express Lamination, and Express Coat found to be under the control of
petitioner, but there was also a discernible attempt to disregard the workers' and unions' right to collective bargaining.
The foregoing considered, we find no error in the CA' s affirmance of the DOLE directive. We affirm DOLE's application
by analogy of the concept of multi-employer bargaining to justify its Decision to treat the three companies as one. While
the multi-employer bargaining mechanism is relatively new and purely optional under Department Order No. 40-03, it
illustrates the State's policy to promote the primacy of free and responsible exercise of the right to collective
bargaining.51 The existence of this mechanism in our labor laws affirm DOLE's conclusion that its treatment of the
employees of the three companies herein as a single bargaining unit is neither impossible nor prohibited.52 It is justified
under the circumstances discussed above.

Besides, it is an established rule that factual findings of labor officials, who are deemed to have acquired expertise in
matters within their jurisdiction, are generally accorded by the courts not only respect but even finality when supported
by substantial evidence; i.e., that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.53

The bargaining unit of the rank-and-


file employees of the three companies
is appropriate.

Petitioner argues that there is no showing that the rank-and-file employees of the three companies would constitute an
appropriate bargaining unit on account of the latter's different geographical locations.54 This contention lacks merit. The
basic test for determining the appropriate bargaining unit is the application of a standard whereby a unit is deemed
appropriate if it affects a grouping of employees who have substantial, mutual interests in wages, hours, working
conditions, and other subjects of collective bargaining.55 We have ruled that geographical location can be completely
disregarded if the communal or mutual interests of the employees are not sacrificed.56

In the present case, there was communal interest among the rank-and-file employees of the three companies based on
the finding that they were constantly rotated to all three companies, and that they performed the same or similar duties
whenever rotated.57 Therefore, aside from geographical location, their employment status and working conditions were
so substantially similar as to justify a conclusion that they shared a community of interest. This finding is consistent with
the policy in favor of a single-employer unit, unless the circumstances require otherwise.58The more solid the employees
are, the stronger is their bargaining capacity.59

As correctly observed by the CA and DOLE, while there is no prohibition on the mere act of engaging in a work-pooling
scheme as sister companies, that act will not be tolerated, and the sister companies' separate juridical personalities will
be disregarded, if they use that scheme to defeat the workers' right to collective bargaining. The employees' right to
collectively bargain with their employers is necessary to promote harmonious labor-management relations in the
interest of sound and stable industrial peace.60

WHEREFORE, the Petition for Review on Certiorari under Rule 45 is DENIED for lack of merit. The Court of Appeals
Decision61 and Resolution62 in CA-G.R. SP No. 109486 are hereby AFFIRMED.

SO ORDERED.
THIRD DIVISION

REPUBLIC OF THE PHILIPPINES, G.R. No. 160352

represented by Department of Labor

and Employment (DOLE), Present:

Petitioner,

QUISUMBING,* J.,

YNARES-SANTIAGO,

- versus - Chairperson,

AUSTRIA-MARTINEZ,

NACHURA, and

REYES, JJ.

KAWASHIMA TEXTILE

MFG., PHILIPPINES, INC., Promulgated:

Respondent. July 23, 2008

x----------------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

The Republic of the Philippines assails by way of Petition for Review on Certiorari under Rule 45 of the Rules of Court,
the December 13, 2002 Decision[1] of the Court of Appeals (CA), which reversed the August 18, 2000 Decision[2] of the
Department of Labor and Employment (DOLE), and reinstated the May 17, 2000 Order[3] of Med-
Arbiter Anastacio L. Bactin, dismissing the petition of Kawashima Free Workers Union-PTGWO Local Chapter No. 803
(KFWU) for the conduct of a certification election in Kawashima Textile Mfg. Phils., Inc. (respondent); and the October 7,
2003 CA Resolution[4] which denied the motion for reconsideration.

The relevant facts are of record.


On January 24, 2000, KFWU filed with DOLE Regional Office No. IV, a Petition for Certification Election to be conducted
in the bargaining unit composed of 145 rank-and-file employees of respondent.[5] Attached to its petition are a
Certificate of Creation of Local/Chapter[6] issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it
[KFWU] submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport & General
Workers Organization (PTGWO), and a Report of Creation of Local/Chapter.[7]

Respondent filed a Motion to Dismiss[8] the petition on the ground that KFWU did not acquire any legal personality
because its membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code, and
its failure to submit its books of account contravened the ruling of the Court in Progressive Development Corporation v.
Secretary, Department of Labor and Employment.[9]

In an Order dated May 17, 2000, Med-Arbiter Bactin found KFWUs legal personality defective and dismissed its petition
for certification election, thus:

We scrutinize the facts and evidences presented by the parties and arrived at a decision that at least two (2) members of
[KFWU], namely: Dany I. Fernandez and Jesus R. Quinto, Jr. are supervisory employees, having a number of personnel
under them. Being supervisory employees, they are prohibited under Article 245 of the Labor Code, as amended, to join
the union of the rank and file employees. Dany I. Fernandez and Jesus R. Quinto, Jr., Chief Engineers of the Maintenance
and Manufacturing Department, respectively, act as foremen to the line engineers, mechanics and other non-skilled
workers and responsible [for] the preparation and organization of maintenance shop fabrication and schedules,
inventory and control of materials and supplies and tasked to implement training plans on line engineers and evaluate
the performance of their subordinates. The above-stated actual functions of Dany I. Fernandez and Jesus R. Quinto, Jr.
are clear manifestation that they are supervisory employees.

xxxx

Since petitioners members are mixture of rank and file and supervisory employees, petitioner union, at this point [in]
time, has not attained the status of a legitimate labor organization. Petitioner should first exclude the supervisory
employees from it membership before it can attain the status of a legitimate labor organization. The above judgment
is supported by the decision of the Supreme Court in the Toyota Case[10] wherein the High Tribunal ruled:

As respondent unions membership list contains the names of at least twenty seven (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. (Underscoring omitted.)

xxxx
Furthermore, the commingling of rank and file and supervisory employees in one (1) bargaining unit cannot be cured in
the exclusion-inclusion proceedings [at] the pre-election conference. The above ruling is supported by the Decision of
the Supreme Court in Dunlop Slazenger (Phils.), Inc. vs. Honorable Secretary of Labor and Employment, et al., G.R. No.
131248 dated December 11, 1998[11] x x x.

xxxx

WHEREFORE, premises considered, the petition for certification election is hereby dismissed for lack of requisite legal
status of petitioner to file this instant petition.

SO ORDERED.[12] (Emphasis supplied)

On the basis of the aforecited decision, respondent filed with DOLE Regional Office No. IV a Petition for Cancellation of
Charter/Union Registration of KFWU,[13] the final outcome of which, unfortunately, cannot be ascertained from the
records.

Meanwhile, KFWU appealed[14] to the DOLE which issued a Decision on August 18, 2000, the dispositive portion of which
reads:

WHEREFORE, the appeal is GRANTED. The Order dated 17 May 2000 of the Med-Arbiter is REVERSED and SET ASIDE.
Accordingly, let the entire records of the case be remanded to the office of origin for the immediate conduct of
certification election, subject to the usual pre-election conference, among the rank-and-file employees of Kawashima
Textile Manufacturing Philippines, Inc. with the following choices:

1. Kawashima Free Workers Union-PTGWO Local Chapter No. 803; and

2. No union.

Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the employer is hereby directed to submit to the office
of origin the certified list of current employees in the bargaining unit for the last three months prior to the issuance of
this decision.

SO DECIDED.[15]
The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court in Toyota Motor Philippines Corporation
v. Toyota Motor Philippines Corporation Labor Union[16] and Dunlop Slazenger, Inc. v. Secretary of Labor and
Employment[17] was misplaced, for while Article 245 declares supervisory employees ineligible for membership in a labor
organization for rank-and-file employees, the provision did not state the effect of such prohibited membership on the
legitimacy of the labor organization and its right to file for certification election. Neither was such mixed membership a
ground for cancellation of its registration. Section 11, Paragraph II, Rule XI of Department Order No. 9 provides for the
dismissal of a petition for certification election based on lack of legal personality of a labor organization only on the
following grounds: (1) [KFWU] is not listed by the Regional Office or the Bureau of Labor Relations in its registry of
legitimate labor organizations; or (2) [KFWU's] legal personality has been revoked or canceled with finality.[18] The DOLE
noted that neither ground existed; on the contrary, KFWU's legal personality was well-established, for it held a
certificate of creation and had been listed in the registry of legitimate labor organizations.

As to the failure of KFWU to file its books of account, the DOLE held that such omission was not a ground for revocation
of union registration or dismissal of petition for certification election, for under Section 1, Rule VI of Department Order
No. 9, a local or chapter like KFWU was no longer required to file its books of account.[19]

Respondent filed a Motion for Reconsideration[20] but the DOLE denied the same in its September 28,
2000 Resolution.[21]

However, on appeal by respondent, the CA rendered the December 13, 2002 Decision assailed herein, reversing
the August 18, 2000 DOLE Decision, thus:

Since respondent union clearly consists of both rank and file and supervisory employees, it cannot qualify as a
legitimate labor organization imbued with the requisite personality to file a petition for certification election. This
infirmity in union membership cannot be corrected in the inclusion-exclusion proceedings during the pre-election
conference.

Finally, contrary to the pronouncement of public respondent, the application of the doctrine enunciated in Toyota
Motor Philippines Corporation vs. Toyota Motor Philippines Corporation Labor Union was not construed in a way that
effectively denies the fundamental right of respondent union to organize and seek bargaining representation x x x.

For ignoring jurisprudential precepts on the matter, the Court finds that the Undersecretary of Labor, acting under the
authority of the Secretary of Labor, acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, premises considered, the Petition is hereby GRANTED. The Decision dated 18 August 2000 of the
Undersecretary of Labor, acting under the authority of the Secretary, is hereby REVERSED and SET ASIDE. The Order
dated 17 May 2000 of the Med-Arbiter dismissing the petition for certification election filed by Kawashima Free Workers
Union-PTGWO Local Chapter No. 803 is REINSTATED.

SO ORDERED.[22] (Emphasis supplied)

KFWU filed a Motion for Reconsideration[23] but the CA denied it.

The Republic of the Philippines (petitioner) filed the present petition to seek closure on two issues:

First, whether a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal
of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997, which deleted
the phraseology in the old rule that [t]he appropriate bargaining unit of the rank-and-file employee shall not include the
supervisory employees and/or security guards; and

Second, whether the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a
certification election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing Phils.,
Inc.[24]

The petition is imbued with merit.

The key to the closure that petitioner seeks could have been Republic Act (R.A.) No. 9481.[25] Sections 8 and 9 thereof
provide:

Section 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."

Section 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." (Emphasis supplied)

Moreover, under Section 4, a pending petition for cancellation of registration

will not hinder a legitimate labor organization from initiating a certification election, viz:

Sec. 4. A new provision is hereby inserted into the Labor Code as Article 238-A to 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." (Emphasis supplied)

Furthermore, under Section 12 of R.A. No. 9481, employers have no personality to interfere with or thwart a petition for
certification election filed by a legitimate labor organization, to wit:

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." (Emphasis supplied)

However, R.A. No. 9481 took effect only on June 14, 2007;[26] hence, it applies only to labor representation cases filed on
or after said date.[27] As the petition for certification election subject matter of the present petition was filed by KFWU
on January 24, 2000,[28] R.A. No. 9481 cannot apply to it. There may have been curative labor legislations[29] that were
given retrospective effect,[30] but not the aforecited provisions of R.A. No. 9481, for otherwise, substantive rights and
interests already vested would be impaired in the process.[31]
Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on January
24, 2000 are R.A. No. 6715,[32] amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code),[33] as amended, and
the Rules and Regulations Implementing R.A. No. 6715,[34] as amended by Department Order No. 9, series of 1997.[35]

It is within the parameters of R.A. No. 6715 and the Implementing Rules that the Court will now resolve the two issues
raised by petitioner.

If there is one constant precept in our labor laws be it Commonwealth Act No. 213 (1936),[36] R.A. No. 875 (1953),[37] P.D.
No. 442 (1974), Executive Order (E.O.) No. 111 (1986)[38] or R.A. No. 6715 (1989) - it is that only a legitimate labor
organization may exercise the right to be certified as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining.[39] What has varied over the years has been the degree of
enforcement of this precept, as reflected in the shifting scope of administrative and judicial scrutiny of the composition
of a labor organization before it is allowed to exercise the right of representation.

One area of contention has been the composition of the membership of a labor organization, specifically whether there
is a mingling of supervisory and rank-and-file employees and how such questioned mingling affects its legitimacy.

It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited,[40] to wit:

Sec. 3. Employees right to self-organization. Employees shall have the right to self-organization 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)

Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of the labor
organization. Under Section 15, the only instance when a labor organization loses its legitimacy is when it violates its
duty to bargain collectively; but there is no word on whether such mingling would also result in loss of legitimacy. Thus,
when the issue of whether the membership of two supervisory employees impairs the legitimacy of a rank-and-file labor
organization came before the Court En Banc in Lopez v. Chronicle Publication Employees Association,[41] the majority
pronounced:

It may be observed that nothing is said of the effect of such ineligibility upon the union itself or on the status of the
other qualified members thereof should such prohibition be disregarded. Considering that the law is specific where it
intends to divest a legitimate labor union of any of the rights and privileges granted to it by law, the absence of any
provision on the effect of the disqualification of one of its organizers upon the legality of the union, may be construed
to confine the effect of such ineligibility only upon the membership of the supervisor. In other words, the invalidity of
membership of one of the organizers does not make the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met.[42] (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The provision in the Labor Code
closest to Sec. 3 is Article 290,[43] which is deafeningly silent on the prohibition against supervisory employees mingling
with rank-and-file employees in one labor organization. Even the Omnibus Rules Implementing Book V of the Labor
Code[44] (Omnibus Rules) merely provides in Section 11, Rule II, thus:

Sec. 11. Supervisory unions and unions of security guards to cease operation. All existing supervisory unions and unions
of security guards shall, upon the effectivity of the Code, cease to operate as such and their registration certificates shall
be deemed automatically cancelled. However, existing collective agreements with such unions, the life of which extends
beyond the date of effectivity of the Code shall be respected until their expiry date insofar as the economic benefits
granted therein are concerned.

Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible
to join or assist the rank and file organization. The determination of who are managerial employees and who are not
shall be the subject of negotiation between representatives of supervisory union and the employer. If no agreement s
reached between the parties, either or both of them ma bring the issue to the nearest Regional Office for determination.
(Emphasis supplied)

The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare in Bulletin v. Sanchez[45] that
supervisory employees who do not fall under the category of managerial employees may join or assist in the formation
of a labor organization for rank-and-file employees, but they may not form their own labor organization.

While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its implementing rules[46] continued to
recognize the right of supervisory employees, who do not fall under the category of managerial employees, to join a
rank-and-file labor organization.[47]

Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor organization, viz:

Sec. 18. Article 245 of the same Code, as amended, is hereby further 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 a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. (Emphasis supplied)

Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition
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 rank-and-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,[48] 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 twenty-seven (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.[49] (Emphasis supplied)

In Dunlop,[50] 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.[51]

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.[52]

In Pagpalain Haulers, Inc. v. Trajano,[53] 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:

Sec. 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 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 Intl. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO[54] 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.[55] 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.[56]

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging
Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW,[57] 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.[58]

More to the point is Air Philippines Corporation v. Bureau of Labor Relations,[59] which involved a petition for cancellation
of union registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed
membership:[60] 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.[61]

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.

Consequently, the Court reverses the ruling of the CA and reinstates that of the DOLE granting the petition for
certification election of KFWU.

Now to the second issue of whether an employer like respondent may collaterally attack the legitimacy of a labor
organization by filing a motion to dismiss the latters petition for certification election.
Except when it is requested to bargain collectively,[62] 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.[63] 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;[64] 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.[65] The employer's only

right in the proceeding is to be notified or informed thereof.[66]

The amendments to the Labor Code and its implementing rules have buttressed that policy even more.

WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and October 7, 2003 Resolution of the Court of
Appeals and the May 17, 2000 Order of Med-Arbiter Anastacio L. Bactin are REVERSED and SET ASIDE, while the August
18, 2000 Decision and September 28, 2000 Resolution of the Department of Labor and Employment are REINSTATED.

No costs.

SO ORDERED.
EN BANC

G.R. No. 179146 July 23, 2013

HOLY CHILD CATHOLIC SCHOOL, Petitioner,


vs.
HON. PATRICIA STO. TOMAS, in her official capacity as Secretary of the Department of Labor and Employment, and
PINAG-ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC SCHOOL TEACHERS AND EMPLOYEES LABOR
UNION (HCCS-TELU-PIGLAS), Respondents.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are the April 18, 2007
Decision1 and July 31, 2007 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December
27, 2002 Decision3 and February 13, 2003 Resolution4 of the Secretary of the Department of Labor and Employment
(SOLE) that set aside the August 10, 2002 Decision5 of the Med-Arbiter denying private respondent’s petition for
certification election.

The factual antecedents are as follows:

On May 31, 2002, a petition for certification election was filed by private respondent Pinag-Isang Tinig at Lakas ng
Anakpawis – Holy Child Catholic School Teachers and Employees Labor Union (HCCS-TELUPIGLAS), alleging that: PIGLAS
is a legitimate labor organization duly registered with the Department of Labor and Employment (DOLE) representing
HCCS-TELU-PIGLAS; HCCS is a private educational institution duly registered and operating under Philippine laws; there
are approximately one hundred twenty (120) teachers and employees comprising the proposed appropriate bargaining
unit; and HCCS is unorganized, there is no collective bargaining agreement or a duly certified bargaining agent or a labor
organization certified as the sole and exclusive bargaining agent of the proposed bargaining unit within one year prior to
the filing of the petition.6 Among the documents attached to the petition were the certificate of affiliation with Pinag-
Isang Tinig at Lakas ng Anakpawis Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-KAMAO) issued by the Bureau of
Labor Relations (BLR), charter certificate issued by PIGLASKAMAO, and certificate of registration of HCCS-TELU as a
legitimate labor organization issued by the DOLE.7

In its Comment8 and Position Paper,9 petitioner HCCS consistently noted that it is a parochial school with a total of 156
employees as of June 28, 2002, broken down as follows: ninety-eight (98) teaching personnel, twenty-five (25) non-
teaching academic employees, and thirty-three (33) non-teaching non-academic workers. It averred that of the
employees who signed to support the petition, fourteen (14) already resigned and six (6) signed twice. Petitioner raised
that members of private respondent do not belong to the same class; it is not only a mixture of managerial, supervisory,
and rank-and-file employees – as three (3) are vice-principals, one (1) is a department head/supervisor, and eleven (11)
are coordinators – but also a combination of teaching and non-teaching personnel – as twenty-seven (27) are non-
teaching personnel. It insisted that, for not being in accord with Article 24510 of the Labor Code, private respondent is an
illegitimate labor organization lacking in personality to file a petition for certification election, as held in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union;11 and an inappropriate bargaining unit for
want of community or mutuality of interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and
Employment12 and De La Salle University Medical Center and College of Medicine v. Laguesma.13

Private respondent, however, countered that petitioner failed to substantiate its claim that some of the employees
included in the petition for certification election holds managerial and supervisory positions.14 Assuming it to be true, it
argued that Section 11 (II),15 Rule XI of DOLE Department Order (D.O.) No. 9, Series of 1997, provided for specific
instances in which a petition filed by a legitimate organization shall be dismissed by the Med-Arbiter and that "mixture
of employees" is not one of those enumerated. Private respondent pointed out that questions pertaining to
qualifications of employees may be threshed out in the inclusion-exclusion proceedings prior to the conduct of the
certification election, pursuant to Section 2,16 Rule XII of D.O. No. 9. Lastly, similar to the ruling in In Re: Globe Machine
and Stamping Company,17 it contended that the will of petitioner’s employees should be respected as they had
manifested their desire to be represented by only one bargaining unit. To back up the formation of a single employer
unit, private respondent asserted that even if the teachers may receive additional pay for an advisory class and for
holding additional loads, petitioner’s academic and non-academic personnel have similar working conditions. It cited
Laguna College v. Court of Industrial Relations,18 as well as the case of a union in West Negros College in Bacolod City,
which allegedly represented both academic and non-academic employees.

On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the petition for certification election on the ground
that the unit which private respondent sought to represent is inappropriate. She resolved:

A certification election proceeding directly involves two (2) issues namely: (a) the proper composition and constituency
of the bargaining unit; and (b) the validity of majority representation claims. It is therefore incumbent upon the Med-
Arbiter to rule on the appropriateness of the bargaining unit once its composition and constituency is questioned.

Section 1 (q), Rule I, Book V of the Omnibus Rules defines a "bargaining unit" as a group of employees sharing mutual
interests within a given employer unit comprised of all or less than all of the entire body of employees in the employer
unit or any specific occupational or geographical grouping within such employer unit. This definition has provided the
"community or mutuality of interest" test as the standard in determining the constituency of a collective bargaining unit.
This is so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights. The application of
this test may either result in the formation of an employer unit or in the fragmentation of an employer unit.

In the case at bar, the employees of petitioner, may, as already suggested, quite easily be categorized into (2) general
classes: one, the teaching staff; and two, the non-teaching-staff. Not much reflection is needed to perceive that the
community or mutuality of interest is wanting between the teaching and the non-teaching staff. It would seem obvious
that the teaching staff would find very little in common with the non-teaching staff as regards responsibilities and
function, working conditions, compensation rates, social life and interests, skills and intellectual pursuits, etc. These are
plain and patent realities which cannot be ignored. These dictate the separation of these two categories of employees
for purposes of collective bargaining. (University of the Philippines vs. Ferrer-Calleja, 211 SCRA 451)19

Private respondent appealed before the SOLE, who, on December 27, 2002, ruled against the dismissal of the petition
and directed the conduct of two separate certification elections for the teaching and the non-teaching personnel, thus:

We agree with the Med-Arbiter that there are differences in the nature of work, hours and conditions of work and salary
determination between the teaching and non-teaching personnel of petitioner. These differences were pointed out by
petitioner in its position paper. We do not, however, agree with the Med-Arbiter that these differences are substantial
enough to warrant the dismissal of the petition. First, as pointed out by private respondent, "inappropriateness of the
bargaining unit sought to be represented is not a ground for the dismissal of the petition." In fact, in the cited case of
University of the Philippines v. Ferrer-Calleja, supra, the Supreme Court did not order the dismissal of the petition but
ordered the conduct of a certification election, limiting the same among the non-academic personnel of the University
of the Philippines.

It will be recalled that in the U.P. case, there were two contending unions, the Organization of Non-Academic Personnel
of U.P. (ONAPUP) and All U.P. Workers Union composed of both academic and nonacademic personnel of U.P. ONAPUP
sought the conduct of certification election among the rank-and-file non-academic personnel only while the all U.P.
Workers Union sought the conduct of certification election among all of U.P.’s rank-and-file employees covering
academic and nonacademic personnel. While the Supreme Court ordered a separate bargaining unit for the U.P.
academic personnel, the Court, however, did not order them to organize a separate labor organization among
themselves. The All U.P. Workers Union was not directed to divest itself of its academic personnel members and in fact,
we take administrative notice that the All U.P. Workers Union continue to exist with a combined membership of U.P.
academic and non-academic personnel although separate bargaining agreements is sought for the two bargaining units.
Corollary, private respondent can continue to exist as a legitimate labor organization with the combined teaching and
non-teaching personnel in its membership and representing both classes of employees in separate bargaining
negotiations and agreements.

WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby REVERSED and SET ASIDE. In lieu thereof,
a new order is hereby issued directing the conduct of two certification elections, one among the non-teaching personnel
of Holy Child Catholic School, and the other, among the teaching personnel of the same school, subject to the usual pre-
election conferences and inclusion-exclusion proceedings, with the following choices:

A. Certification Election Among Petitioner’s Teaching Personnel:

1. Holy Child Catholic School Teachers and Employees Labor Union; and

2. No Union.

B. Certification Election Among Petitioner’s Non-Teaching Personnel:

1. Holy Child Catholic School Teachers and Employees Labor Union; and

2. No Union.

Petitioner is hereby directed to submit to the Regional Office of origin within ten (10) days from receipt of this Decision,
a certified separate list of its teaching and non-teaching personnel or when necessary a separate copy of their payroll for
the last three (3) months prior to the issuance of this Decision.20

Petitioner filed a motion for reconsideration21 which, per Resolution dated February 13, 2003, was denied.
Consequently, petitioner filed before the CA a Petition for Certiorari with Prayer for Temporary Restraining Order and
Preliminary Injunction.22 The CA resolved to defer action on the prayer for TRO pending the filing of private respondent’s
Comment.23 Later, private respondent and petitioner filed their Comment24 and Reply,25 respectively.

On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging that Hon. Helen F. Dacanay of the
Industrial Relations Division of the DOLE was set to implement the SOLE Decision when it received a summons and was
directed to submit a certified list of teaching and non-teaching personnel for the last three months prior to the issuance
of the assailed Decision.26 Acting thereon, on August 5, 2003, the CA issued the TRO and ordered private respondent to
show cause why the writ of preliminary injunction should not be granted.27 Subsequently, a Manifestation and
Motion28 was filed by private respondent, stating that it repleads by reference the arguments raised in its Comment and
that it prays for the immediate lifting of the TRO and the denial of the preliminary injunction. The CA, however, denied
the manifestation and motion on November 21, 200329 and, upon motion of petitioner,30 granted the preliminary
injunction on April 21, 2005.31 Thereafter, both parties filed their respective Memorandum.32

On April 18, 2007, the CA eventually dismissed the petition. As to the purported commingling of managerial,
supervisory, and rank-and-file employees in private respondent’s membership, it held that the Toyota ruling is
inapplicable because the vice-principals, department head, and coordinators are neither supervisory nor managerial
employees. It reasoned:

x x x While it may be true that they wield power over other subordinate employees of the petitioner, it must be
stressed, however, that their functions are not confined with policy-determining such as hiring, firing, and disciplining of
employees, salaries, teaching/working hours, other monetary and non-monetary benefits, and other terms and
conditions of employment. Further, while they may formulate policies or guidelines, nonetheless, such is merely
recommendatory in nature, and still subject to review and evaluation by the higher executives, i.e., the principals or
executive officers of the petitioner. It cannot also be denied that in institutions like the petitioner, company policies
have already been pre-formulated by the higher executives and all that the mentioned employees have to do is carry out
these company policies and standards. Such being the case, it is crystal clear that there is no improper commingling of
members in the private respondent union as to preclude its petition for certification of (sic) election.33

Anent the alleged mixture of teaching and non-teaching personnel, the CA agreed with petitioner that the nature of the
former’s work does not coincide with that of the latter. Nevertheless, it ruled that the SOLE did not commit grave abuse
of discretion in not dismissing the petition for certification election, since it directed the conduct of two separate
certification elections based on Our ruling in University of the Philippines v. Ferrer-Calleja.34

A motion for reconsideration35 was filed by petitioner, but the CA denied the same;36 hence, this petition assigning the
alleged errors as follows:

I.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN THE CASE OF TOYOTA MOTOR
PHILIPPINES CORPORATION VS. TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION (268 SCRA 573) DOES NOT
APPLY IN THE CASE AT BAR DESPITE THE [COMMINGLING] OF BOTH SUPERVISORY OR MANAGERIAL AND RANK-AND-
FILE EMPLOYEES IN THE RESPONDENT UNION;

II

THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING ALLOWING THE CONDUCT OF CERTIFICATION
ELECTION BY UPHOLDING THAT THE RESPONDENT UNION REPRESENTED A BARGAINING UNIT DESPITE ITS OWN
FINDINGS THAT THERE IS NO MUTUALITY OF INTEREST BETWEEN THE MEMBERS OF RESPONDENT UNION APPLYING THE
TEST LAID DOWN IN THE CASE OF UNIVERSITY OF THE PHILIPPINES VS. FERRER-CALLEJA (211 SCRA 451).37

We deny.

Petitioner claims that the CA contradicted the very definition of managerial and supervisory employees under existing
law and jurisprudence when it did not classify the vice-principals, department head, and coordinators as managerial or
supervisory employees merely because the policies and guidelines they formulate are still subject to the review and
evaluation of the principal or executive officers of petitioner. It points out that the duties of the vice-principals,
department head, and coordinators include the evaluation and assessment of the effectiveness and capability of the
teachers under them; that such evaluation and assessment is independently made without the participation of the
higher Administration of petitioner; that the fact that their recommendation undergoes the approval of the higher
Administration does not take away the independent nature of their judgment; and that it would be difficult for the vice-
principals, department head, and coordinators to objectively assess and evaluate the performances of teachers under
them if they would be allowed to be members of the same labor union.

On the other hand, aside from reiterating its previous submissions, private respondent cites Sections 9 and 1238 of
Republic Act (R.A.) No. 9481 to buttress its contention that petitioner has no standing to oppose the petition for
certification election. On the basis of the statutory provisions, it reasons that an employer is not a party-in-interest in a
certification election; thus, petitioner does not have the requisite right to protect even by way of restraining order or
injunction.

First off, We cannot agree with private respondent’s invocation of R.A. No. 9481. Said law took effect only on June 14,
2007; hence, its applicability is limited to labor representation cases filed on or after said date.39 Instead, the law and
rules in force at the time private respondent filed its petition for certification election on May 31, 2002 are R.A. No.
6715, which amended Book V of Presidential Decree (P.D.) No. 442 (the Labor Code), as amended, and the Rules and
Regulations Implementing R.A. No. 6715, as amended by D.O. No. 9, which was dated May 1, 1997 but took effect on
June 21, 1997.40

However, note must be taken that even without the express provision of Section 12 of RA No. 9481, the "Bystander
Rule" is already well entrenched in this jurisdiction. It has been consistently held in a number of cases that a certification
election is the sole concern of the workers, except when the employer itself has to file the petition pursuant to Article
259 of the Labor Code, as amended, but even after such filing its role in the certification process ceases and becomes
merely a bystander.41 The employer clearly lacks the personality to dispute the election and has no right to interfere at
all therein.42 This is so since any uncalled-for concern on the part of the employer may give rise to the suspicion that it is
batting for a company union.43 Indeed, the demand of the law and policy for an employer to take a strict, hands-off
stance in certification elections is based on the rationale that the employees’ bargaining representative should be
chosen free from any extraneous influence of the management; that, to be effective, the bargaining representative must
owe its loyalty to the employees alone and to no other.44

Now, going back to petitioner’s contention, the issue of whether a petition for certification election is dismissible on the
ground that the labor organization’s membership allegedly consists of supervisory and rank-and-file employees is
actually not a novel one. In the 2008 case of Republic v. Kawashima Textile Mfg., Philippines, Inc.,45 wherein the
employer-company moved to dismiss the petition for certification election on the ground inter alia that the union
membership is a mixture of rank-and-file and supervisory employees, this Court had conscientiously discussed the
applicability of Toyota and Dunlop in the context of R.A. No. 6715 and D.O. No. 9, viz.:

It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited, to wit:

Sec. 3. Employees' right to self-organization. - Employees shall have the right to self-organization 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)

Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of the labor
organization. Under Section 15, the only instance when a labor organization loses its legitimacy is when it violates its
duty to bargain collectively; but there is no word on whether such mingling would also result in loss of legitimacy. Thus,
when the issue of whether the membership of two supervisory employees impairs the legitimacy of a rank-and-file labor
organization came before the Court En Banc in Lopez v. Chronicle Publication Employees Association, the majority
pronounced:

It may be observed that nothing is said of the effect of such ineligibility upon the union itself or on the status of the
other qualified members thereof should such prohibition be disregarded. Considering that the law is specific where it
intends to divest a legitimate labor union of any of the rights and privileges granted to it by law, the absence of any
provision on the effect of the disqualification of one of its organizers upon the legality of the union, may be construed to
confine the effect of such ineligibility only upon the membership of the supervisor. In other words, the invalidity of
membership of one of the organizers does not make the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met. (Emphasis supplied)

Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The provision in the Labor Code
closest to Sec. 3 is Article 290, which is deafeningly silent on the prohibition against supervisory employees mingling
with rank-and-file employees in one labor organization. Even the Omnibus Rules Implementing Book V of the Labor Code
(Omnibus Rules) merely provides in Section 11, Rule II, thus:

Sec. 11. Supervisory unions and unions of security guards to cease operation. - All existing supervisory unions and unions
of security guards shall, upon the effectivity of the Code, cease to operate as such and their registration certificates shall
be deemed automatically cancelled. However, existing collective agreements with such unions, the life of which extends
beyond the date of effectivity of the Code shall be respected until their expiry date insofar as the economic benefits
granted therein are concerned.

Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to
join or assist the rank and file organization. The determination of who are managerial employees and who are not shall
be the subject of negotiation between representatives of supervisory union and the employer. If no agreement s
reached between the parties, either or both of them may bring the issue to the nearest Regional Office for
determination. (Emphasis supplied)

The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare in Bulletin v. Sanchez that
supervisory employees who do not fall under the category of managerial employees may join or assist in the formation
of a labor organization for rank-and-file employees, but they may not form their own labor organization.

While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its implementing rules continued to
recognize the right of supervisory employees, who do not fall under the category of managerial employees, to join a
rank- and-file labor organization.

Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor organization, viz.:

Sec. 18. Article 245 of the same Code, as amended, is hereby further 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 a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own (Emphasis supplied)

Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition
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 rank-and-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 twenty-seven (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:

Sec. 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 Union-PTGWO 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 Union-FFW, 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-and-file 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.46

When a similar issue confronted this Court close to three years later, the above ruling was substantially quoted in
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms
(SMCC-Super) v. Charter Chemical and Coating Corporation.47 In unequivocal terms, We reiterated that the alleged
inclusionof 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.48
Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the instant case. 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 and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) was
applied. In contrast, D.O. No. 9 is applicable in the petition for certification election of private respondent as it was filed
on May 31, 2002.

Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed that petitioner cannot collaterally
attack the legitimacy of private respondent by praying for the dismissal of the petition for certification election:

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.49

Further, the determination of whether union membership comprises managerial and/or supervisory employees is a
factual issue that is best left for resolution in the inclusion-exclusion proceedings, which has not yet happened in this
case so still premature to pass upon. We could only emphasize the rule that factual findings of labor officials, who are
deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only with respect but
even finality by the courts when supported by substantial evidence.50 Also, the jurisdiction of this Court in cases brought
before it from the CA via Rule 45 is generally limited to reviewing errors of law or jurisdiction. The findings of fact of the
CA are conclusive and binding. Except in certain recognized instances,51 We do not entertain factual issues as it is not
Our function to analyze or weigh evidence all over again; the evaluation of facts is best left to the lower courts and
administrative agencies/quasi-judicial bodies which are better equipped for the task.52

Turning now to the second and last issue, petitioner argues that, in view of the improper mixture of teaching and non-
teaching personnel in private respondent due to the absence of mutuality of interest among its members, the petition
for certification election should have been dismissed on the ground that private respondent is not qualified to file such
petition for its failure to qualify as a legitimate labor organization, the basic qualification of which is the representation
of an appropriate bargaining unit.

We disagree.

The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit:

Article 212(g) of the Labor Code defines a labor organization as "any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions
of employment." Upon compliance with all the documentary requirements, the Regional Office or Bureau shall issue in
favor of the applicant labor organization a certificate indicating that it is included in the roster of legitimate labor
organizations. Any applicant labor organization 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.53
In case of alleged inclusion of disqualified employees in a union, the proper procedure for an employer like petitioner is
to directly file a petition for cancellation of the union’s certificate of registration due to misrepresentation, false
statement or fraud under the circumstances enumerated in Article 239 of the Labor Code, as amended.54 To reiterate,
private respondent, having been validly issued a certificate of registration, should be considered as having acquired
juridical personality which may not be attacked collaterally.

On the other hand, a bargaining unit has been 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 interests of all the employees, consistent with equity
to the employer, indicated to be best suited to serve reciprocal rights and duties of the parties under the collective
bargaining provisions of the law."55 In determining the proper collective bargaining unit and what unit would be
appropriate to be the collective bargaining agency, the Court, in the seminal case of Democratic Labor Association v.
Cebu Stevedoring Company, Inc.,56 mentioned several factors that should be considered, to wit: (1) will of employees
(Globe Doctrine); (2) affinity and unity of employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status,
such as temporary, seasonal and probationary employees. We stressed, however, that the test of the grouping is
community or mutuality of interest, because "the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining
rights."57

As the SOLE correctly observed, petitioner failed to comprehend the full import of Our ruling in U.P. It suffices to quote
with approval the apt disposition of the SOLE when she denied petitioner’s motion for reconsideration:

Petitioner likewise claimed that we erred in interpreting the decision of the Supreme Court in U.P. v. Ferrer-Calleja,
supra. According to petitioner, the Supreme Court stated that the non-academic rank-andfile employees of the
University of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the
institution. Hence, petitioner argues, it sought the creation of separate bargaining units, namely: (1) petitioner’s
teaching personnel to the exclusion of non-teaching personnel; and (2) petitioner’s non-teaching personnel to the
exclusion of teaching personnel.

Petitioner appears to have confused the concepts of membership in a bargaining unit and membership in a union. In
emphasizing the phrase "to the exclusion of academic employees" stated in U.P. v. Ferrer-Calleja, petitioner believed
that the petitioning union could not admit academic employees of the university to its membership. But such was not
the intention of the Supreme Court.

A bargaining unit is a group of employees sought to be represented by a petitioning union. Such employees need not be
members of a union seeking the conduct of a certification election. A union certified as an exclusive bargaining agent
represents not only its members but also other employees who are not union members. As pointed out in our assailed
Decision, there were two contending unions in the U.P. case, namely, the Organization of Non-Academic Personnel of
U.P. (ONAPUP) and the All U.P. Worker’s Union composed of both U.P. academic and non-academic personnel. ONAPUP
sought the conduct of a certification election among the rank-and-file non-academic personnel only, while the All U.P.
Workers Union intended to cover all U.P. rank-and-file employees, involving both academic and non-academic
personnel.

The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to constitute a bargaining unit to the
exclusion of the academic employees of the institution", but did not order them to organize a separate labor
organization. In the U.P. case, the Supreme Court did not dismiss the petition and affirmed the order for the conduct of
a certification election among the non-academic personnel of U.P., without prejudice to the right of the academic
personnel to constitute a separate bargaining unit for themselves and for the All U.P. Workers Union to institute a
petition for certification election.

In the same manner, the teaching and non-teaching personnel of petitioner school must form separate bargaining
units.1âwphi1 Thus, the order for the conduct of two separate certification elections, one involving teaching personnel
and the other involving non-teaching personnel. It should be stressed that in the subject petition, private respondent
union sought the conduct of a certification election among all the rank-and-file personnel of petitioner school. Since the
decision of the Supreme Court in the U.P. case prohibits us from commingling teaching and non-teaching personnel in
one bargaining unit, they have to be separated into two separate bargaining units with two separate certification
elections to determine whether the employees in the respective bargaining units desired to be represented by private
respondent. In the U.P. case, only one certification election among the non-academic personnel was ordered, because
ONAPUP sought to represent that bargaining unit only. No petition for certification election among the academic
personnel was instituted by All U.P. Workers Union in the said case; thus, no certification election pertaining to its
intended bargaining unit was ordered by the Court.58

Indeed, the purpose of a certification election is precisely to ascertain the majority of the employees’ choice of an
appropriate bargaining unit – to be or not to be represented by a labor organization and, if in the affirmative case, by
which one.59

At this point, it is not amiss to stress once more that, as a rule, only questions of law may be raised in a Rule 45 petition.
In Montoya v. Transmed Manila Corporation,60 the Court discussed the particular parameters of a Rule 45 appeal from
the CA’s Rule 65 decision on a labor case, as follows:

x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the review of questions of law
raised against the assailed CA decision. In ruling for legal correctness, we have to view the CA decision in the same
context that the petition for certiorari it ruled upon was presented to it; we have to examine the CA decision from the
prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision
before it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we have
to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged
before it. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In question form,
the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling
on the case?61

Our review is, therefore, limited to the determination of whether the CA correctly resolved the presence or absence of
grave abuse of discretion in the decision of the SOLE, not on the basis of whether the latter's decision on the merits of
the case was strictly correct. Whether the CA committed grave abuse of discretion is not what is ruled upon but whether
it correctly determined the existence or want of grave abuse of discretion on the part of the SOLE.

WHEREFORE, the pet1t1on is DENIED. The April 18, 2007 Decision and July 31, 2007, Resolution of the Court of Appeals
in CA-G.R. SP No. 76175, which affirmed the December 27, 2002 Decision of the Secretary of the Department of Labor
and Employment that set aside the

August 10, 2002 Decision of the Med-Arbiter denying private respondent's petition for certification election are hereby
AFFIRMED.

SO ORDERED.
NATIONAL UNION OF WORKERS IN HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES-
MANILA PAVILION HOTEL CHAPTER, G.R. No. 181531

Petitioner,
Present:

- versus -
QUISUMBING, J., Chairperson,

CARPIO MORALES,

SECRETARY OF LABOR AND EMPLOYMENT, CHICO-NAZARIO,*


BUREAU OF LABOR RELATIONS, HOLIDAY INN LEONARDO-DE CASTRO,** and
MANILA PAVILION HOTEL LABOR UNION AND
ACESITE PHILIPPINES HOTEL CORPORATION, PERALTA,*** JJ.

Respondents.

Promulgated:

July 31, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

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 Decision[1] and of the Secretary
of Labor and Employments January 25, 2008 Resolution[2] in OS-A-9-52-05 which affirmed the Med-Arbiters Resolutions
dated January 22, 2007[3] 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 = 346

NUWHRAIN-MPHC = 151

HIMPHLU = 169

NO UNION = 1

SPOILED = 3

SEGREGATED = 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 Calleja[5] 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 run-off 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 Med-Arbiter 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 indetermining 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 denyingthe 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.

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.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No.174287 August 12, 2013

NATIONAL UNION OF BANK EMPLOYEES (NUBE), PETITIONER,


vs.
PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND PHILIPPINE NATIONAL BANK, RESPONDENTS.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure are the May 22, 2006
Decision1 and August 17, 2006 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 84606, which reversed the May
27, 2004 Decision3 of the Secretary of Labor and Employment acting as voluntary arbitrator, the dispositive portion of
which states:

WHEREFORE, in light of the foregoing findings, the Bank is hereby ORDERED to release all union dues withheld and to
continue remitting to NUBE-PNB chapter the members' obligations under the CBA, LESS the amount corresponding to
the number of non-union members including those who participated in the unsuccessful withdrawal of membership
from their mother union.

The parties are enjoined to faithfully comply with the above- mentioned resolution.

With respect to the URGENT MOTION FOR INTERVENTION filed by PEMA, the same is hereby denied without prejudice
to the rights of its members to bring an action to protect such rights if deemed necessary at the opportune time.

SO ORDERED.4

We state the facts.

Respondent Philippine National Bank (PNB) used to be a government-owned and controlled banking institution
established under Public Act 2612, as amended by Executive Order No. 80 dated December 3, 1986 (otherwise known as
The 1986 Revised Charter of the Philippine National Bank). Its rank-and-file employees, being government personnel,
were represented for collective negotiation by the Philnabank Employees Association (PEMA), a public sector union.

In 1996, the Securities and Exchange Commission approved PNB’s new Articles of Incorporation and By-laws and its
changed status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees (NUBE),
which is a labor federation composed of unions in the banking industry, adopting the name NUBE-PNB Employees
Chapter (NUBE-PEC).

Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A
collective bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the period of
January 1, 1997 to December 31, 2001.

Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the monthly membership fee and other
assessments imposed by the union from the salary of each union member, and agency fee (equivalent to the monthly
membership dues) from the salary of the rank- and-file employees within the bargaining unit who are not union
members. Moreover, during the effectivity of the CBA, NUBE, being the Federation union, agreed that PNB shall remit
₱15.00 of the ₱65.00 union dues per month collected by PNB from every employee, and that PNB shall directly credit
the amount to NUBE’s current account with PNB.5

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2, 2002 a
petition for certification election among the rank-and-file employees of PNB. The petition sought the conduct of a
certification election to be participated in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events transpired – the independent union
registration of NUBE- PEC and its disaffiliation with NUBE.

With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under the leadership of Mariano Soria,
decided to apply for a separate registration with the Department of Labor and Employment (DOLE). On March 25, 2002,
it was registered as an independent labor organization under Registration Certificate No. NCR-UR-3-3790-2002.

Thereafter, on June 20, 2003, the Board of Directors of NUBE-PEC adopted a Resolution6 disaffiliating itself from NUBE.
Cited as reasons were as follows:

xxxx

WHEREAS, in the long period of time that the Union has been affiliated with NUBE, the latter has miserably failed to
extend and provide satisfactory services and support to the former in the form of legal services, training assistance,
educational seminars, and the like;

WHEREAS, this failure by NUBE to provide adequate essential services and support to union members have caused the
latter to be resentful to NUBE and to demand for the Union’s disaffiliation from the former[;]

WHEREAS, just recently, NUBE displayed its lack of regard for the interests and aspirations of the union members by
blocking the latter’s desire for the early commencement of CBA negotiations with the PNB management[;]

WHEREAS, this strained relationship between NUBE and the Union is no longer conducive to a fruitful partnership
between them and could even threaten industrial peace between the Union and the management of PNB.

WHEREAS, under the circumstances, the current officers of the Union have no choice but to listen to the clamor of the
overwhelming majority of union members for the Union to disaffiliate from NUBE.7

The duly notarized Resolution was signed by Edgardo B. Serrana (President), Rico B. Roma (Vice-President), Rachel C.
Latorre (Secretary), Valeriana S. Garcia (Director/Acting Treasurer), Ruben C. Medrano (Director), and Verlo C. Magtibay
(Director). It is claimed that said Resolution was overwhelmingly ratified by about eighty-one percent (81%) of the total
union membership.

On June 25, 2003, NUBE-PEC filed a Manifestation and Motion8 before the Med-Arbitration Unit of DOLE, praying that, in
view of its independent registration as a labor union and disaffiliation from NUBE, its name as appearing in the official
ballots of the certification election be changed to "Philnabank Employees Association (PEMA)" or, in the alternative,
both parties be allowed to use the name "PEMA" but with PEMA-FFW and NUBE-PEC be denominated as "PEMA-Bustria
Group" and "PEMA-Serrana Group," respectively.

On the same date, PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and requesting to
stop, effective immediately, the check-off of the ₱15.00 due for NUBE.9
Acting thereon, on July 4, 2003, PNB informed NUBE of PEMA’s letter and its decision to continue the deduction of the
₱15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the amounts collected
would be held in a trust account pending the resolution of the issue on PEMA’s disaffiliation.10

On July 11, 2003, NUBE replied that: it remains as the exclusive bargaining representative of the PNB rank-and-file
employees; by signing the Resolution (on disaffiliation), the chapter officers have abandoned NUBE-PEC and joined
another union; in abandoning NUBE-PEC, the chapter officers have abdicated their respective positions and resigned as
such; in joining another union, the chapter officers committed an act of disloyalty to NUBE-PEC and the general
membership; the circumstances clearly show that there is an emergency in NUBE-PEC necessitating its placement under
temporary trusteeship; and that PNB should cease and desist from dealing with Serrana, Roma, Latorre, Garcia,
Medrano, and Magtibay, who are expelled from NUBE-PEC.11 With regard to the issue of non-remittance of the union
dues, NUBE enjoined PNB to comply with the union check-off provision of the CBA; otherwise, it would elevate the
matter to the grievance machinery in accordance with the CBA.

Despite NUBE’s response, PNB stood firm on its decision. Alleging unfair labor practice (ULP) for non-implementation of
the grievance machinery and procedure, NUBE brought the matter to the National Conciliation and Mediation Board
(NCMB) for preventive mediation.12 In time, PNB and NUBE agreed to refer the case to the Office of the DOLE Secretary
for voluntary arbitration. They executed a Submission Agreement on October 28, 2003.13

Meantime, the DOLE denied PEMA’s motion to change its name in the official ballots. The certification election was
finally held on October 17, 2003. The election yielded the following results:

3,74
Number of eligible voters
2

2,99
Number of valid votes cast
3

Number of spoiled ballots 72

3,06
Total
5

Philnabank Employees Association-FFW 289

National Union of Bank Employees (NUBE)- 2,68


Philippine National Bank (PNB) Chapter 3

No Union 21

14
Total 2,993

On April 28, 2004, PEMA filed before the voluntary arbitrator an Urgent Motion for Intervention,15 alleging that it stands
to be substantially affected by whatever judgment that may be issued, because one of the issues for resolution is the
validity of its disaffiliation from NUBE. It further claimed that its presence is necessary so that a complete relief may be
accorded to the parties. Only NUBE opposed the motion, arguing that PEMA has no legal personality to intervene, as it is
not a party to the existing CBA; and that NUBE is the exclusive bargaining representative of the PNB rank-and-file
employees and, in dealing with a union other than NUBE, PNB is violating the duty to bargain collectively, which is
another form of ULP.16

Barely a month after, DOLE Acting Secretary Manuel G. Imson denied PEMA’s motion for intervention and ordered PNB
to release all union dues withheld and to continue remitting the same to NUBE. The May 27, 2004 Decision opined:

Before we delve into the merits of the present dispute, it behooves [Us] to discuss in passing the propriety of the
MOTION FOR INTERVENTION filed by the Philnabank Employees Association (PEMA) on April 28, 2004, the alleged
[break-away] group of NUBE- PNB Chapter.

A cursory reading of the motion reveals a denial thereof is not prejudicial to the individual rights of its members. They
are protected by law.

Coming now to the main issues of the case, suffice it to say that after an evaluative review of the record of the case,
taking into consideration the arguments and evidence adduced by both parties, We find that indeed no effective
disaffiliation took place.

It is well settled that [l]abor unions may disaffiliate from their mother federations to form a local or independent union
only during the 60-day freedom period immediately preceding the expiration of the CBA. [Tanduay Distillery Labor Union
v. National Labor Relations Commission, et al.] However, such disaffiliation must be effected by a majority of the
members in the bargaining unit. (Volkschel Labor Union v. Bureau of Labor Relations).

Applying the foregoing jurisprudence to the case at bar, it is difficult to believe that a justified disaffiliation took place.
While the record apparently shows that attempts at disaffiliation occurred sometime in June of 2003 x x x the latest
result of a certification election dated 17 October 2003 mooted such disaffiliation.

Further, even if for the sake of argument an attempt at disaffiliation occurred, the record is bereft of substantial
evidence to support a finding of effective disaffiliation. There might have been a mass withdrawal of the union members
from the NUBE-PNB Chapter. The record shows, however, that only 289 out of 3,742 members shifted their allegiance
from the mother union. Hence, they constituted a small minority for which reason they could not have successfully
severed the local union’s affiliation with NUBE.

Thus, since only a minority of the members wanted disaffiliation as shown by the certification election, it can be inferred
that the majority of the members wanted the union to remain an affiliate of the NUBE. [Villar, et al. v. Inciong, et al.].
There being no justified disaffiliation that took place, the bargaining agent’s right under the provision of the CBA on
Check-Off is unaffected and still remained with the old NUBE-PNB Chapter. x x x

While it is true that the obligation of an employee to pay union dues is co-terminus with his affiliation [Philippine
Federation of Petroleum Workers v. CIR], it is equally tenable that when it is shown, as in this case, that the withdrawal
from the mother union is not supported by majority of the members, the disaffiliation is unjustified and the disaffiliated
minority group has no authority to represent the employees of the bargaining unit. This is the import of the principle laid
down in [Volkschel Labor Union v. Bureau of Labor Relations supra] and the inverse application of the Supreme Court
decision in [Philippine Federation of Petroleum Workers v. CIR] regarding entitlement to the check-off provision of the
CBA.

As a necessary consequence to our finding that no valid disaffiliation took place, the right of NUBE to represent its local
chapter at the PNB, less those employees who are no longer members of the latter, is beyond reproach.
However, the Bank cannot be faulted for not releasing union dues to NUBE at the time when representation status issue
was still being threshed out by proper governmental authority. Prudence dictates the discontinuance of remittance of
union dues to NUBE under such circumstances was a legitimate exercise of management discretion apparently in order
to protect the Bank’s business interest. The suspension of the check-off provision of the CBA, at the instance of the
latter made in good faith, under the present circumstances cannot give rise to a right of action. For having been
exercised without malice much less evil motive and for not causing actual loss to the National Union of Bank Employees
(NUBE), the same act of management [cannot] be penalized.17

Aggrieved, PEMA filed before the CA a petition under Rule 43 of the Rules on Civil Procedure with prayer for the
issuance of a temporary restraining order (TRO) or writ of preliminary injunction (WPI). On November 2, 2004, the CA
denied the application for WPI.18 PEMA’s motion for reconsideration was also denied on February 24, 2005, noting PNB’s
manifestation that it would submit to the judgment of the CA as to which party it should remit the funds collected from
the employees.19

On June 21, 2005, however, petitioner again filed an Urgent Motion for the Issuance of a TRO against the June 10, 2005
Resolution of DOLE Acting Secretary Imson, which ordered PNB to properly issue a check directly payable to the order of
NUBE covering the withheld funds from the trust account.20 Considering the different factual milieu, the CA resolved to
grant the motion.21

Subsequent to the parties’ submission of memoranda, the CA promulgated its May 22, 2006 Decision, declaring the
validity of PEMA’s disaffiliation from NUBE and directing PNB to return to the employees concerned the amounts
deducted and held in trust for NUBE starting July 2003 and to stop further deductions in favor of NUBE.22

As to the impropriety of denying PEMA’s motion for intervention, the CA noted:

x x x Among the rights of the [PEMA] as an affiliate of a federation is to disaffiliate from it. Any case in which this is an
issue is then one in which the union has a significant legal interest and as to which it must be heard, irrespective of any
residual rights of the members after a decision that might deny a disaffiliation. It is a non-sequitur to make the
intervention of the union in this case dependent on the question of whether its members can pursue their own agenda
under the same constraints.23

On the validity of PEMA’s disaffiliation, the CA ratiocinated:

The power and freedom of a local union to disaffiliate from its mother union or federation is axiomatic. As Volkschel vs.
Bureau of Labor Relations [137 SCRA 42] recognizes, a local union is, after all, a separate and voluntary association that
under the constitutional guarantee of freedom of expression is free to serve the interests of its members. Such right and
freedom invariably include the right to disaffiliate or declare its autonomy from the federation or mother union to which
it belongs, subject to reasonable restrictions in the law or the federation’s constitution. [Malayang Samahan ng mga
Manggagawa sa M. Greenfield vs. Ramos, 326 SCRA 428]

Without any restrictive covenant between the parties, [Volkschel Labor Union vs. Bureau of Labor Relations, supra, at
48,] it is instructive to look into the state of the law on a union’s right to disaffiliate. The voluntary arbitrator alludes to a
provision in PD 1391 allowing disaffiliation only within a 60-day period preceding the expiration of the CBA. In Alliance of
Nationalist and Genuine Labor Organization vs. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning
Mills, etc. [258 SCRA 371], however, the rule was not held to be iron-clad. Volkschel was cited to support a more flexible
view that the right may be allowed as the circumstances warrant. In Associated Workers Union-PTGWO vs. National
Labor Relations Commission [188 SCRA 123], the right to disaffiliate was upheld before the onset of the freedom period
when it became apparent that there was a shift of allegiance on the part of the majority of the union members.
xxxx

As the records show, a majority, indeed a vast majority, of the members of the local union ratified the action of the
board to disaffiliate. Our count of the members who approved the board action is, 2,638. If we divide this by the number
of eligible voters as per the certification election which is 3,742, the quotient is 70.5%, representing the proportion of
the members in favor of disaffiliation. The [PEMA] says that the action was ratified by 81%. Either way, the groundswell
of support for the measure was overwhelming.

The respondent NUBE has developed the ingenious theory that if the disaffiliation was approved by a majority of the
members, it was neutered by the subsequent certification election in which NUBE-PNB Chapter was voted the sole and
exclusive bargaining agent. It is argued that the effects of this change must be upheld as the latest expression of the will
of the employees in the bargaining unit. The truth of the matter is that the names of PEMA and NUBE-PNB Chapter are
names of only one entity, the two sides of the same coin. We have seen how NUBE-PNB Employees Chapter evolved into
PEMA and competed with Philnabank Employees Association-FFW for supremacy in the certification election. To realize
that it was PEMA which entered into the contest, we need only to remind ourselves that PEMA was the one which filed a
motion in the certification election case to have its name PEMA put in the official ballot. DOLE insisted, however, in
putting the name NUBE-PNB Chapter in the ballots unaware of the implications of this seemingly innocuous act.24

NUBE filed a motion for reconsideration, but it was denied;25 hence, this petition raising the following issues for
resolution:

I.

The Secretary of Labor acted without error and without grave abuse of discretion in not giving due course to the urgent
motion for intervention filed by PEMA.

II.

The Secretary of Labor acted without grave abuse of discretion and without serious error in ruling that PEMA’s alleged
disaffiliation was invalid.

III.

The Secretary of Labor did not commit serious error in ordering the release of the disputed union fees/dues to NUBE-
PNB Chapter.

IV.

There is no substantial basis for the issuance of a preli minary injunction or temporary restraining order.

V.

Under the Rules of Court, the appeal/petition of PEMA should have been dismissed.

VI.

PEMA and NUBE are not one and the same, and the denial by the Secretary of Labor of the motion for intervention was
proper.

VII.
NUBE-PNB Chapter, not PEMA, has been fighting for PNB rank-and-file interests and rights since PNB’s privatization,
which is further pro of that NUBE-PNB Chapter and PEMA are not one and the same.

VIII.

The alleged disaffiliation was not valid as proper procedure was not followed.

IX.

NUBE is entitled to check-off.26

Stripped of the non-essential, the issue ultimately boils down on whether PEMA validly disaffiliated itself from NUBE, the
resolution of which, in turn, inevitably affects the latter’s right to collect the union dues held in trust by PNB.

We deny the petition.

Whether there was a valid disaffiliation is a factual issue.27 It is elementary that a question of fact is not appropriate for a
petition for review on certiorari under Rule 45 of the Rules of Court. The parties may raise only questions of law because
the Supreme Court is not a trier of facts. As a general rule, We are not duty-bound to analyze again and weigh the
evidence introduced in and considered by the tribunals below. When supported by substantial evidence, the findings of
fact of the CA are conclusive and binding on the parties and are not reviewable by this Court, except: (1) When the
conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is
based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the CA, in making its
findings, went beyond the issues of the case and the same is contrary to the admissions of both parties; (7) When the
findings are contrary to those of the trial court; (8) When the findings of fact are conclusions without citation of specific
evidence on which they are based; (9) When the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondents; and (10) When the findings of fact of the CA are premised on the
supposed absence of evidence and contradicted by the evidence on record.28The Court finds no cogent reason to apply
these recognized exceptions.

Even a second look at the records reveals that the arguments raised in the petition are bereft of merit.

The right of the local union to exercise the right to disaffiliate from its mother union is well settled in this jurisdiction. In
MSMG-UWP v. Hon. Ramos,29 We held:

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate
and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare
its autonomy from the federation which it belongs when circumstances warrant, in accordance with the constitutional
guarantee of freedom of association.

The purpose of affiliation by a local union with a mother union [or] a federation

"x x x is to increase by collective action the 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, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into existence."

Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such
disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation's constitution
prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union.30
Likewise, Philippine Skylanders, Inc. v. National Labor Relations Commission31 restated:

The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case
law.1âwphi1 In the landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., we upheld the
right of local unions to separate from their mother federation on the ground that as separate and voluntary associations,
local unions do not owe their creation and existence to the national federation to which they are affiliated but, instead,
to the will of their members. The sole essence of affiliation is to increase, by collective action, the common bargaining
power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when
without succor and support local unions may find it hard, unaided by other support groups, to secure justice for
themselves.

Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the
terms laid down in the agreement which brought such affiliation into existence.

Such dictum has been punctiliously followed since then.32

And again, in Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment – Office of the Secretary,33this
Court opined:

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. A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation
does not divest the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of
the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent. As
such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including
the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.34

Finally, the recent case of Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc35ruled:

x x x [A] local union may disaffiliate at any time from its mother federation, absent any showing that the same is
prohibited under its constitution or rule. Such, however, does not result in it losing its legal personality altogether.
Verily, Anglo-KMU v. Samahan Ng Mga Manggagawang Nagkakaisa Sa Manila Bar Spinning Mills At J.P. Coats enlightens:

A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining
power between the employer and their employee-members. 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.
The mere act of 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.36

These and many more have consistently reiterated the earlier view that the right of the local members to withdraw from
the federation and to form a new local union depends upon the provisions of the union's constitution, by-laws and
charter and, in the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local
union, a local may sever its relationship with its parent.37 In the case at bar, there is nothing shown in the records nor is
it claimed by NUBE that PEMA was expressly forbidden to disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. This being so, PEMA is not precluded to disaffiliate from NUBE after acquiring the status
of an independent labor organization duly registered before the DOLE.

Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-observance of the procedure
that union members should make such determination through secret ballot and after due deliberation, conformably
with Article 241 (d) of the Labor Code, as amended.38 Conspicuously, other than citing the opinion of a "recognized labor
law authority," NUBE failed to quote a specific provision of the law or rule mandating that a local union’s disaffiliation
from a federation must comply with Article 241 (d) in order to be valid and effective.

Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold PEMA’s disaffiliation from NUBE. First,
non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the
employees’ fundamental right to self-organization and to form and join labor organizations of their own choosing for the
purpose of collective bargaining.39 Second, the Article nonetheless provides that when the nature of the organization
renders such secret ballot impractical, the union officers may make the decision in behalf of the general membership. In
this case, NUBE did not even dare to contest PEMA’s representation that "PNB employees, from where [PEMA] [derives]
its membership, are scattered from Aparri to Jolo, manning more than 300 branches in various towns and cities of the
country," hence, "[to] gather the general membership of the union in a general membership to vote through secret
balloting is virtually impossible."40 It is understandable, therefore, why PEMA’s board of directors merely opted to
submit for ratification of the majority their resolution to disaffiliate from NUBE. Third, and most importantly, NUBE did
not dispute the existence of the persons or their due execution of the document showing their unequivocal support for
the disaffiliation of PEMA from NUBE. Note must be taken of the fact that the list of PEMA members (identifying
themselves as "PEMA-Serrana Group"41) who agreed with the board resolution was attached as Annex "H" of PEMA’s
petition before the CA and covered pages 115 to 440 of the CA rollo. While fully displaying the employees’ printed
name, identification number, branch, position, and signature, the list was left unchallenged by NUBE. No evidence was
presented that the union members’ ratification was obtained by mistake or through fraud, force or intimidation. Surely,
this is not a case where one or two members of the local union decided to disaffiliate from the mother federation, but
one where more than a majority of the local union members decided to disaffiliate.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was
completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by
the former that affects the interests and affairs of the latter, including the supposed expulsion of Serrana et al., is
rendered without force and effect.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA separated
from and left NUBE and exists as an independent labor organization with a certificate of registration, the former is no
longer obliged to pay dues and assessments to the latter; naturally, there would be no longer any reason or occasion for
PNB to continue making deductions.42 As we said in Volkschel Labor Union v. Bureau of Labor Relations:43

x x x In other words, ALUMETAL [NUBE in this case] is entitled to receive the dues from respondent companies as long as
petitioner union is affiliated with it and respondent companies are authorized by their employees (members of
petitioner union) to deduct union dues. Without said affiliation, the employer has no link to the mother union. The
obligation of an employee to pay union dues is coterminous with his affiliation or membership. "The employees' check-
off authorization, even if declared irrevocable, is good only as long as they remain members of the union concerned." A
contract between an employer and the parent organization as bargaining agent for the employees is terminated bv the
disaffiliation ofthe local of which the employees are members. x x x44
On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as represented by Serrana et al.
Since PEMA had validly separated itself from NUBE, there would be no restrictions which could validly hinder it from
collectively bargaining with PNB.

WHEREFORE, the foregoing considered, the instant Petition is DENIED. The May 22, 2006 Decision and August 17, 2006
Resolution of the Court of Appeals in CA-G.R. SP No. 84606, which reversed the May 27, 2004 Decision ofthe Secretary
of Labor and Employment, are AFFIRMED.

SO ORDERED.

FIRST DIVISION

SAMAHAN NG MGA G.R. No. 167141

MANGGAGAWA SA

SAMMALAKAS SA Present:

INDUSTRIYA NG

KAPATIRANG HALIGI YNARES-SANTIAGO, J.,*

NG ALYANSA (SAMMA CARPIO, Acting Chairperson,**

LIKHA), CORONA,

Petitioner, LEONARDO-DE CASTRO and

BRION, JJ.***

-versus-

SAMMA CORPORATION,
Respondent. Promulgated:

March 13, 2009

x - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

This is a petition for review on certiorari[1] of the August 31, 2004 decision[2] and February 15, 2005 resolution[3] of the
Court of Appeals (CA) in CA-G.R. SP No. 77156.

Petitioner Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMA-LIKHA)
filed a petition for certification election on July 24, 2001 in the Department of Labor and Employment (DOLE), Regional
Office IV.[4] It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization registered
with the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma Corporation; (3) there
was no other legitimate labor organization representing these rank-and-file employees; (4) respondent was not a party
to any collective bargaining agreement and (5) no certification or consent election had been conducted within the
employer unit for the last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of non-
forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.[5]

In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered the dismissal of the petition on the
following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its
legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a certificate
of non-forum shopping.[6]

Petitioner moved for reconsideration on November 29, 2001. The Regional Director of DOLE Regional Office IV
forwarded the case to the Secretary of Labor. Meanwhile, on December 14, 2002, respondent filed a petition for
cancellation of petitioners union registration in the DOLE Regional Office IV.[7]

On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal, rendered
a decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be collaterally
attacked but may only be questioned in an independent petition for cancellation of registration. Thus, he directed the
holding of a certification election among the rank-and-file employees of respondent, subject to the usual pre-election
conference and inclusion-exclusion proceedings.[8]
On January 23, 2003 or six days after the issuance of said decision, respondent filed its comment on the motion for
reconsideration of petitioner, asserting that the order of the med-arbiter could only be reviewed by way of appeal and
not by a motion for reconsideration pursuant to Department Order (D.O.) No. 9, series of 1997.[9]

On February 6, 2003, respondent filed its motion for reconsideration of the January 17, 2003 decision. In a resolution
dated April 3, 2003, Secretary Patricia A. Sto. Tomas denied the motion.[10]

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office IV,
issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the ground of
prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation clause under
paragraph 2 of Article 235 of the Labor Code.[11] On May 6, 2003, petitioner moved for the reconsideration of this
resolution.[12]

Respondent filed a petition for certiorari[13] in the CA assailing the January 17, 2003 decision and April 3, 2003 resolution
of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same.[14] It denied reconsideration in
a resolution dated February 15, 2005. It held that Administrative Circular No. 04-94 which required the filing of a
certificate of non-forum shopping applied to petitions for certification election. It also ruled that the Secretary of Labor
erred in granting the appeal despite the lack of proof of service on respondent. Lastly, it found that petitioner had no
legal standing to file the petition for certification election because its members were a mixture of supervisory and rank-
and-file employees.[15]

Hence, this petition.

The issues for our resolution are the following: (1) whether a certificate for non-forum shopping is required in a petition
for certification election; (2) whether petitioners motion for reconsideration which was treated as an appeal by the
Secretary of Labor should not have been given due course for failure to attach proof of service on respondent and (3)
whether petitioner had the legal personality to file the petition for certification election.

REQUIREMENT OF CERTIFICATE

OF NON-FORUM SHOPPING

IS NOT REQUIRED IN A PETITION

FOR CERTIFICATION ELECTION

In ruling against petitioner, the CA declared that under Administrative Circular No. 04-94,[16] a certificate of non-forum
shopping was required in a petition for certification election. The circular states:

The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint,
counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief. (Emphasis supplied)
According to the CA, a petition for certification election asserts a claim, i.e., the conduct of a certification election. As a
result, it is covered by the circular.[17]

We disagree.

The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims, petitions or
applications where contending parties litigate their respective positions regarding the claim for relief of the
complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a petition, is not a
litigation but an investigation of a non-adversarial and fact-finding character.[18]

Such proceedings are not predicated upon an allegation of misconduct requiring relief, but, rather, are merely of an
inquisitorial nature. The Board's functions are not judicial in nature, but are merely of an investigative character. The
object of the proceedings is not the decision of any alleged commission of wrongs nor asserted deprivation of rights but
is merely the determination of proper bargaining units and the ascertainment of the will and choice of the employees in
respect of the selection of a bargaining representative. The determination of the proceedings does not entail the entry
of remedial orders to redress rights, but culminates solely in an official designation of bargaining units and an
affirmation of the employees' expressed choice of bargaining agent.[19] (Emphasis supplied)

In Pena v. Aparicio,[20] we ruled against the necessity of attaching a certification against forum shopping to a disbarment
complaint. We looked into the rationale of the requirement and concluded that the evil sought to be avoided is not
present in disbarment proceedings.

[The] rationale for the requirement of a certification against forum shopping is to apprise the Court of the pendency of
another action or claim involving the same issues in another court, tribunal or quasi-judicial agency, and thereby
precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse of court
processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds
to the congestion of the heavily burdened dockets of the courts. Furthermore, the rule proscribing forum shopping
seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the
courts to promote the orderly administration of justice, prevent undue inconvenience upon the other party, and save
the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or agencies
rendering conflicting resolutions or decisions upon the same issue.

It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a
disbarment complaint. It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits and the
possibility of conflicting decisions, rarely happens in disbarment complaints considering that said proceedings are
either "taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified
complaint of any person." Thus, if the complainant in a disbarment case fails to attach a certification against forum
shopping, the pendency of another disciplinary action against the same respondent may still be ascertained with
ease.[21] (Emphasis supplied)
The same situation holds true for a petition for certification election. Under the omnibus rules implementing the Labor
Code as amended by D.O. No. 9,[22] it is supposed to be filed in the Regional Office which has jurisdiction over the
principal office of the employer or where the bargaining unit is principally situated.[23] The rules further provide that
where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall be
automatically consolidated.[24] Hence, the filing of multiple suits and the possibility of conflicting decisions will rarely
happen in this proceeding and, if it does, will be easy to discover.

Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is no
requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03, series of
2003 which replaced the former.[25]

Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.

TREATMENT OF MOTION FOR RECONSIDERATION AS AN APPEAL

The CA ruled that petitioners motion for reconsideration, which was treated as an appeal by the Secretary of Labor,
should not have been given due course for lack of proof of service in accordance with the implementing rules as
amended by D.O. No. 9:

Section 12. Appeal; finality of decision. The decision of the Med-Arbiter may be appealed to the Secretary for any
violation of these Rules. Interloculory orders issued by the Med-Arbiter prior to the grant or denial of the petition,
including order granting motions for intervention issued after an order calling for a certification election, shall not be
appealable. However, any issue arising therefrom may be raised in the appeal on the decision granting or denying the
petition.

The appeal shall be under oath and shall consist of a memorandum of appeal specifically stating the grounds relied upon
by the appellant with the supporting arguments and evidence. The appeal shall be deemed not filed unless
accompanied by proof of service thereof to appellee.[26] (Emphasis supplied)

In accepting the appeal, the Secretary of Labor stated:


[Petitioners] motion for reconsideration of the Med-Arbiters Order dated November 12, 2002 was verified under
oath by [petitioners] president Gil Dispabiladeras before Notary Public Wilfredo A. Ruiz on 29 November 2002, and
recorded in the Notarial Register under Document No. 186, Page No. 38, Book V, series of 2002. On page 7 of the said
motion also appears the notation copy of respondent to be delivered personally with the name and signature of one
Rosita Simon, 11/29/02. The motion contained the grounds and arguments relied upon by [petitioner] for the reversal
of the assailed Order. Hence, the motion for reconsideration has complied with the formal requisites of an appeal.

The signature of Rosita Simon appearing on the last page of the motion can be considered as compliance with the
required proof of service upon respondent. Rosita Simons employment status was a matter that should have been
raised earlier by [respondent]. But [respondent] did not question the same and slept on its right to oppose or comment
on [petitioners] motion for reconsideration. It cannot claim that it was unaware of the filing of the appeal by
[petitioner], because a copy of the indorsement of the entire records of the petition to the Office of the Secretary in
view of the memorandum of appeal filed by Mr. Jesus B. Villamor was served upon the employer and legal counsels Atty.
Ismael De Guzman and Atty. Anatolio Sabillo at the Samma Corporation Office, Main Avenue, PEZA, Rosario, Cavite on
December 5, 2002.[27] (Emphasis supplied)

The motion for reconsideration was properly treated as an appeal because it substantially complied with the formal
requisites of the latter. The lack of proof of service was not fatal as respondent had actually received a copy of the
motion. Consequently, it had the opportunity to oppose the same. Under these circumstances, we find that the
demands of substantial justice and due process were satisfied.

We stress that rules of procedure are interpreted liberally to secure a just, speedy and inexpensive disposition of every
action. They should not be applied if their application serves no useful purpose or hinders the just and speedy
disposition of cases.Specifically, technical rules and objections should not hamper the holding of a certification election
wherein employees are to select their bargaining representative. A contrary rule will defeat the declared policy of the
State

to promote the free and responsible exercise of the right to self-organization through the establishment of a simplified
mechanism for the speedy registration of labor organizations and workers associations, determination of
representation status, and resolution of intra and inter-union disputes.[28] xxx (Emphasis supplied)

LEGAL PERSONALITY OF PETITIONER

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees was
not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for
certification election.

We agree.
LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FED-
LC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01.[29] With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:

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 may be questioned only in an independent petition for cancellation in accordance with
these Rules.[30]

-0-

Section 3. Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with Section 1 of
this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein. Upon
compliance with all the documentary requirements, the Regional Office or Bureau of Labor Relations shall issue in favor
of the local/chapter a certificate indicating that it is included in the roster of legitimate labor organizations.[31]

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent
petition for cancellation of certificate of registration.[32] Unless petitioners union registration is cancelled in independent
proceedings, it shall continue to have all the rights of a legitimate labor organization, including the right to petition for
certification election.

Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of a
labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor Relations in
its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled with finality in
accordance with the rules.[33]

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a
resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003, petitioner
moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking petitioners
charter certificate had attained finality. However, in this petition, petitioner prayed that its charter certificate be
reinstated in the roster of active legitimate labor [organizations].[34] This cannot be granted here. To repeat, the
proceedings on a petition for cancellation of registration are independent of those of a petition for certification
election. This case originated from the latter. If it is shown that petitioners legal personality had already been revoked or
cancelled with finality in accordance with the rules, then it is no longer a legitimate labor organization with the right to
petition for a certification election.

A FINAL NOTE
Respondent, as employer, had been the one opposing the holding of a certification election among its rank-and-file
employees. This should not be the case. We have already declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the certification election.[35]

[This] Court notes that it is petitioner, the employer, which has offered the most tenacious resistance to the holding of a
certification election among its monthly-paid rank-and-file employees. This must not be so, for the choice of a collective
bargaining agent is the sole concern of the employees. The only exception to this rule is where the employer has to file
the petition for certification election pursuant to Article 258 of the Labor Code because it was requested to bargain
collectively, which exception finds no application in the case before us. Its role in a certification election has aptly been
described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of a mere bystander. It has no
legal standing in a certification election as it cannot oppose the petition or appeal the Med-Arbiter's orders related
thereto. . .[36]

WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to the office of origin, the
Regional Office IV of the Department of Labor and Employment, for determination of the status of petitioners legal
personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification election
subject to the usual pre-election conference.

SO ORDERED.
Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

S.S. VENTURES INTERNATIONAL, G.R. No. 161690

INC.,

Petitioner,

Present:

QUISUMBING, J., Chairperson,

- versus - YNARES-SANTIAGO,*

CARPIO MORALES,

TINGA, and

VELASCO, JR., JJ.

S.S. VENTURES LABOR UNION

(SSVLU) and DIR. HANS LEO Promulgated:

CACDAC, in His capacity as

Director of the Bureau of Labor July 23, 2008

Relations (BLR),

Respondents.

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export firm with principal place of business at
Phase I-PEZA-Bataan Export Zone, Mariveles, Bataan, is in the business of manufacturing sports shoes. Respondent S.S.
Ventures Labor Union (Union), on the other hand, is a labor organization registered with the Department of Labor and
Employment (DOLE) under Certificate of Registration No. RO300-00-02-UR-0003.

On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in behalf of the rank-and-
file employees of Ventures. Five hundred forty two (542) signatures, 82 of which belong to

______________________

* Additional member as per Special Order No. 509 dated July 1, 2008.

terminated Ventures employees, appeared on the basic documents supporting the petition.

On August 21, 2000, Ventures filed a Petition[1] to cancel the Unions certificate of registration invoking the grounds set
forth in Article 239(a) of the Labor Code.[2] Docketed as Case No. RO300-0008-CP-002 of the same DOLE regional office,
the petition alleged the following:

(1) The Union deliberately and maliciously included the names of more or less 82 former employees no longer
connected with Ventures in its list of members who attended the organizational meeting and in the
adoption/ratification of its constitution and by-laws held on January 9, 2000 in Mariveles, Bataan; and the Union forged
the signatures of these 82 former employees to make it appear they took part in the organizational meeting and
adoption and ratification of the constitution;

(2) The Union maliciously twice entered the signatures of three persons namely: Mara Santos, Raymond Balangbang,
and Karen Agunos;

(3) No organizational meeting and ratification actually took place; and

(4) The Unions application for registration was not supported by at least 20% of the rank-and-file employees of
Ventures, or 418 of the total 2,197-employee complement. Since more or less 82 of the 500[3] signatures were forged or
invalid, then the remaining valid signatures would only be 418, which is very much short of the 439 minimum (2197 total
employees x 20% = 439.4) required by the Labor Code.[4]

In its Answer with Motion to Dismiss,[5] the Union denied committing the imputed acts of fraud or forgery and
alleged that: (1) the organizational meeting actually took place on January 9, 2000 at the Shoe City basketball court in
Mariveles; (2) the 82 employees adverted to in Ventures petition were qualified Union members for, although they have
been ordered dismissed, the one-year prescriptive period to question their dismissal had not yet lapsed; (3) it had
complied with the 20%-member registration requirement since it had 542 members; and (4) the double signatures were
inadvertent human error.
In its supplemental reply memorandum[6] filed on March 20, 2001, with attachments, Ventures cited other instances of
fraud and misrepresentation, claiming that the affidavits executed by 82 alleged Union members show that they were
deceived into signing paper minutes or were harassed to signing their attendance in the organizational meeting.
Ventures added that some employees signed the affidavits denying having attended such meeting.

In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLE-Region III found for Ventures, the dispositive
portion of which reads:

Viewed in the light of all the foregoing, this office hereby grants the petition. WHEREFORE, this office resolved to
CANCEL Certificate of Registration No. [RO300-00-02-UR-0003] dated 28 February 2000 of respondent S.S. Ventures
Labor Union-Independent.

So Ordered.[7]

Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to have been forwarded to
the Bureau of Labor Relations (BLR). Although it would later find this motion to have been belatedly filed, the BLR, over
the objection of Ventures which filed a Motion to Expunge, gave it due course and treated it as an appeal.

Despite Ventures motion to expunge the appeal,[8] the BLR Director rendered on October 11, 2002 a decision[9] in BLR-A-
C-60-6-11-01, granting the Unions appeal and reversing the decision of Dione. The fallo of the BLRs decision reads:

WHEREFORE, the appeal is hereby GRANTED. The Decision of Director Ana C. Dione dated 6 April 2001 is hereby
REVERSED and SET ASIDE. S.S. Ventures Labor Union-Independent shall remain in the roster of legitimate labor
organizations.

SO ORDERED.[10]

Ventures sought reconsideration of the above decision but was denied by the BLR.
Ventures then went to the Court of Appeals (CA) on a petition for certiorari under Rule 65, the recourse docketed as CA-
G.R. SP No. 74749. On October 20, 2003, the CA rendered a Decision,[11] dismissing Ventures petition. Ventures motion
for reconsideration met a similar fate.[12]

Hence, this petition for review under Rule 45, petitioner Ventures raising the following grounds:

I.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS
JURISDICTION IN DISREGARDING THE SUBSTANTIAL AND OVERWHELMING EVIDENCE ADDUCED BY THE PETITIONER
SHOWING THAT RESPONDENT UNION PERPETRATED FRAUD, FORGERY, MISREPRESENTATION AND MISSTATEMENTS IN
CONNECTION WITH THE ADOPTION AND RATIFICATION OF ITS CONSTITUTION AND BY-LAWS, AND IN THE PREPARATION
OF THE LIST OF MEMBERS WHO TOOK PART IN THE ALLEGED ORGANIZATIONAL MEETING BY HOLDING THAT:

A.

THE 87 AFFIDAVITS OF ALLEGED UNION MEMBERS HAVE NO EVIDENTIARY WEIGHT.

B.

THE INCLUSION OF THE 82 EMPLOYEES IN THE LIST OF ATTENDEES TO THE JANUARY 9, 2000 MEETING IS AN INTERNAL
MATTER WITHIN THE AMBIT OF THE WORKERS RIGHT TO SELF-ORGANIZATION AND OUTSIDE THE SPHERE OF
INFLUENCE (OF) THIS OFFICE (PUBLIC RESPONDENT IN THIS CASE) AND THE PETITIONER.

II.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS
JURISDICTION IN IGNORING AND DISREGARDING THE BLATANT PROCEDURAL LAPSES OF THE RESPONDENT UNION IN
THE FILING OF ITS MOTION FOR RECONSIDERATION AND APPEAL.

A.

BY GIVING DUE COURSE TO THE MOTION FOR RECONSIDERATION FILED BY THE RESPONDENT UNION DESPITE THE FACT
THAT IT WAS FILED BEYOND THE REGLEMENTARY PERIOD.
B.

BY ADMITTING THE APPEAL FILED BY ATTY. ERNESTO R. ARELLANO AND HOLDING THAT THE SAME DOES NOT
CONSTITUTE FORUM SHOPPING UNDER SUPREME COURT CIRCULAR NO. 28-91.

III.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS
JURISDICTION IN INVOKING THE CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION AND ILO CONVENTION NO. 87 TO
JUSTIFY THE MASSIVE FRAUD, MISREPRESENTATION, MISSTATEMENTS AND FORGERY COMMITTED BY THE
RESPONDENT UNION.[13]

The petition lacks merit.

The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3[14] of the Constitution and such
right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the Labor Code, shall not be abridged. Once
registered with the DOLE, a union is considered a legitimate labor organization endowed with the right and privileges
granted by law to such organization. While a certificate of registration confers a union with legitimacy with the
concomitant right to participate in or ask for certification election in a bargaining unit, the registration may be canceled
or the union may be decertified as the bargaining unit, in which case the union is divested of the status of a legitimate
labor organization.[15] Among the grounds for cancellation is the commission of any of the acts enumerated in Art.
239(a)[16] of the Labor Code, such as fraud and misrepresentation in connection with the adoption or ratification of the
unions constitution and like documents. The Court, has in previous cases, said that to decertify a union, it is not enough
to show that the union includes ineligible employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the application for registration and the supporting
documents, such as the adoption or ratification of the constitution and by-laws or amendments thereto and the minutes
of ratification of the constitution or by-laws, among other documents.[17]

Essentially, Ventures faults both the BLR and the CA in finding that there was no fraud or misrepresentation on the part
of the Union sufficient to justify cancellation of its registration. In this regard, Ventures makes much of, first, the
separate hand-written statements of 82 employees who, in gist, alleged that they were unwilling or harassed signatories
to the attendance sheet of the organizational meeting.

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[18] 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.

It cannot be over-emphasized that the registration or the recognition of a labor union after it has submitted the
corresponding papers is not ministerial on the part of the BLR. Far from it. After a labor organization has filed the
necessary registration documents, it becomes mandatory for the BLR to check if the requirements under Art. 234[19] of
the Labor Code have been sedulously complied with.[20] If the unions application is infected by falsification and like
serious irregularities, especially those appearing on the face of the application and its attachments, a union should be
denied recognition as a legitimate labor organization. Prescinding from these considerations, the issuance to the Union
of Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating irregularities.

Second, Ventures draws attention to the inclusion of 82 individuals to the list of participants in the January 9,
2000 organizational meeting. Ventures submits that the 82, being no longer connected with the company, should not
have been counted as attendees in the meeting and the ratification proceedings immediately afterwards.

The assailed inclusion of the said 82 individuals to the meeting and proceedings adverted to is not really fatal to
the Unions cause for, as determined by the BLR, the allegations of falsification of signatures or misrepresentation with
respect to these individuals are without basis.[21] The Court need not delve into the question of whether these 82
dismissed individuals were still Union members qualified to vote and affix their signature on its application for
registration and supporting documents. Suffice it to say that, as aptly observed by the CA, the procedure for acquiring or
losing union membership and the determination of who are qualified or disqualified to be members are matters internal
to the union and flow from its right to self-organization.

To our mind, the relevancy of the 82 individuals active participation in the Unions organizational meeting and the signing
ceremonies thereafter comes in only for purposes of determining whether or not the Union, even without the 82, would
still meet what Art. 234(c) of the Labor Code requires to be submitted, to wit:

Art. 234. Requirements of Registration.Any applicant labor organization x x x 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:

xxxx
(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.

The BLR, based on its official records, answered the poser in the affirmative. Wrote the BLR:

It is imperative to look into the records of respondent union with this Bureau pursuant to our role as a central registry of
union and CBA records under Article 231 of the Labor Code and Rule XVII of the rules implementing Book V of the Labor
Code, as amended x x x.

In its union records on file with this Bureau, respondent union submitted the names of [542] members x x x. This
number easily complied with the 20% requirement, be it 1,928 or 2,202 employees in the establishment. Even
subtracting the 82 employees from 542 leaves 460 union members, still within 440 or 20% of the maximum total of
2,202 rank-and-file employees.

Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is better addressed in the
inclusion-exclusion proceedings during a pre-election conference x x x. The issue surrounding the involvement of the 82
employees is a matter of membership or voter eligibility. It is not a ground to cancel union registration. (Emphasis
added.)

The bare fact that three signatures twice appeared on the list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel Certificate of Registration No. RO300-00-02-UR-0003. As
the Union tenably explained without rebuttal from Ventures, the double entries are no more than normal human error,
effected without malice. Even the labor arbiter who found for Ventures sided with the Union in its explanation on the
absence of malice.[22]

The cancellation of a unions registration doubtless has an impairing dimension on the right of labor to self-organization.
Accordingly, we can accord concurrence to the following apt observation of the BLR: [F]or fraud and misrepresentation
[to be grounds for] cancellation of union registration under Article 239 [of the Labor Code], the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members.[23]

In its Comment, the Union points out that for almost seven (7) years following the filing of its petition, no certification
election has yet been conducted among the rank-and-file employees. If this be the case, the delay has gone far enough
and can no longer be allowed to continue. The CA is right when it said that Ventures should not interfere in the
certification election by actively and persistently opposing the certification election of the Union. A certification election
is exclusively the concern of employees and the employer lacks the legal personality to challenge it.[24] In fact,
jurisprudence frowns on the employers interference in a certification election for such interference unduly creates the
impression that it intends to establish a company union.[25]

Ventures allegations on forum shopping and the procedural lapse supposedly committed by the BLR in allowing a
belatedly filed motion for reconsideration need not detain us long. Suffice it to state that this Court has consistently
ruled that the application of technical rules of procedure in labor cases may be relaxed to serve the demands of
substantial justice.[26] So it must be in this case.

WHEREFORE, the petition is DENIED. The Decision and Resolution dated October 20, 2003 and January 19, 2004,
respectively, of the CA are AFFIRMED. S.S. Ventures Labor Union shall remain in the roster of legitimate labor
organizations, unless it has in the meantime lost its legitimacy for causes set forth in the Labor Code. Costs against
petitioner.

SO ORDERED.

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