INSULAR HOTEL EMPLOYEES UNION v.

WATERFRONT In another letter[8] dated November 10, 2000, Rojas reiterated the Union's
INSULAR HOTEL DAVAO desire to help respondent, to wit:

PERALTA, J.: We would like to thank you for giving us the opportunity to meet [with]
your representatives in order for us to air our sentiments and extend our
Before this Court is a petition for review on certiorari,[1] under Rule 45 of helping hands for a possible reconsideration of the company's decision.
the Rules of Court, seeking to set aside the Decision[2] dated October 11,
2005, and the Resolution[3] dated July 13, 2006 of the Court of Appeals (CA) The talks have enabled us to initially come up with a suggestion of solving
in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. the high cost on payroll.
SP No. 83657. Said Decision reversed the Decision[4] dated the April 5, 2004
of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo). We propose that 25 years and above be paid their due retirement benefits
and put their length of service to zero without loss of status of employment
The facts of the case, as culled from the records, are as follows: with a minimum hiring rate.

On November 6, 2000, respondent Waterfront Insular Hotel Davao Thru this scheme, the company would be able to save a substantial amount
(respondent) sent the Department of Labor and Employment (DOLE), and reduce greatly the payroll costs without affecting the finance of the
Region XI, Davao City, a Notice of Suspension of Operations[5] notifying the families of the employees because they will still have a job from where they
same that it will suspend its operations for a period of six months due to could get their income.
severe and serious business losses. In said notice, respondent assured the
DOLE that if the company could not resume its operations within the six- Moreover, we are also open to a possible reduction of some economic
month period, the company would pay the affected employees all the benefits benefits as our gesture of sincere desire to help.
legally due to them. We are looking forward to a more fruitful round of talks in order to save the
During the period of the suspension, Domy R. Rojas (Rojas), the President hotel.[9]
of Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the In another letter[10] dated November 20, 2000, Rojas sent respondent more
recognized labor organization in Waterfront Davao, sent respondent a
proposals as a form of the Union's gesture of their intention to help the
number of letters asking management to reconsider its decision. company, thus:
In a letter[6] dated November 8, 2000, Rojas intimated that the members of 1) Suspension of [the] CBA for ten years, No strike no lock-out shall
the Union were determined to keep their jobs and that they believed they too be enforced.
had to help respondent, thus:
2) Pay all the employees their benefits due, and put the length of
xxxx service to zero with a minimum hiring rate. Payment of benefits may be on a
Sir, we are determined to keep our jobs and push the Hotel up from sinking. staggered basis or as available.
We believe that we have to help in this (sic) critical times. Initially, we 3) Night premium and holiday pays shall be according to law.
intend to suspend the re-negotiations of our CBA. We could talk further on Overtime hours rendered shall be offsetted as practiced.
possible adjustments on economic benefits, the details of which we are
hoping to discuss with you or any of your emissaries. x x x[7] 4) Reduce the sick leaves and vacation leaves to 15 days/15days.
5) Emergency leave and birthday off are hereby waived. C. Bation, Jr., signed a Memorandum of Agreement[14] (MOA) wherein
respondent agreed to re-open the hotel subject to certain concessions offered
6) Duty meal allowance is fixed at P30.00 only. No more midnight by DIHFEU-NFL in its Manifesto.
snacks and double meal allowance. The cook drinks be stopped as practiced.
Accordingly, respondent downsized its manpower structure to 100 rank-and-
7) We will shoulder 50% of the group health insurance and family file employees as set forth in the terms of the MOA. Moreover, as agreed
medical allowance be reduced to 1,500.00 instead of 3,000.00. upon in the MOA, a new pay scale was also prepared by respondent.
8) The practice of bringing home our uniforms for laundry be The retained employees individually signed a Reconfirmation of
continued. Employment[15] which embodied the new terms and conditions of their
9) Fixed manning shall be implemented, the rest of manpower continued employment. Each employee was assisted by Rojas who also
requirements maybe sourced thru WAP and casual hiring. Manpower for signed the document.
fixed manning shall be 145 rank-and-file union members. On June 15, 2001, respondent resumed its business operations.
10) Union will cooperate fully on strict implementation of house rules in On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be
order to attain desired productivity and discipline. The union will not tolerate local officers of the National Federation of Labor (NFL), filed a Notice of
problem members. Mediation[16] before the National Conciliation and Mediation Board
11) The union in its desire to be of utmost service would adopt multi- (NCMB), Region XI, Davao City. In said Notice, it was stated that the Union
tasking for the hotel to be more competitive. involved was DARIUS JOVES/DEBBIE PLANAS ET. AL, National
Federation of Labor. The issue raised in said Notice was the Diminution of
It is understood that with the suspension of the CBA renegotiations, the same wages and other benefits through unlawful Memorandum of Agreement.
existing CBA shall be adopted and that all provisions therein shall remain
enforced except for those mentioned in this proposal. On August 29, 2002, the NCMB called Joves and respondent to a conference
to explore the possibility of settling the conflict. In the said conference,
These proposals shall automatically supersede the affected provisions of the respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-
CBA.[11] NFL), represented by Joves, signed a Submission Agreement[17] wherein they
chose AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator.
In a handwritten letter[12] dated November 25, 2000, Rojas once again Submitted for the resolution of AVA Olvida was the determination of
appealed to respondent for it to consider their proposals and to re-open the whether or not there was a diminution of wages and other benefits through an
hotel. In said letter, Rojas stated that manpower for fixed manning shall be unlawful MOA. In support of his authority to file the complaint, Joves,
one hundred (100) rank-and-file Union members instead of the one hundred assisted by Atty. Danilo Cullo (Cullo), presented several Special Powers of
forty-five (145) originally proposed. Attorney (SPA) which were, however, undated and unnotarized.
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted On September 2, 2002, respondent filed with the NCMB a Manifestation
to respondent a Manifesto[13] concretizing their earlier proposals. with Motion for a Second Preliminary Conference,[18] raising the following
grounds:
After series of negotiations, respondent and DIHFEU-NFL, represented by
its President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino
1) The persons who filed the instant complaint in the name of the In said Opposition, Cullo reiterated that the complainants were not
Insular Hotel Employees Union-NFL have no authority to represent the representing IHEU-NFL, to wit:
Union;
xxxx
2) The individuals who executed the special powers of attorney in favor
of the person who filed the instant complaint have no standing to cause the
filing of the instant complaint; and
2. Respondent must have been lost when it said that the individuals
3) The existence of an intra-union dispute renders the filing of the who executed the SPA have no standing to represent the union nor to
instant case premature.[19] assail the validity of Memorandum of Agreement (MOA). What is
correct is that the individual complainants are not representing
On September 16, 2002, a second preliminary conference was conducted in the union but filing the complaint through their appointed attorneys-
the NCMB, where Cullo denied any existence of an intra-union dispute in-fact to assert their individual rights as workers who are entitled to
among the members of the union. Cullo, however, confirmed that the case the benefits granted by law and stipulated in the collective
was filed not by the IHEU-NFL but by the NFL. When asked to present his bargaining agreement.[23]
authority from NFL, Cullo admitted that the case was, in fact, filed by
individual employees named in the SPAs. The hearing officer directed both On November 11, 2002, AVA Olvida issued a Resolution[24] denying
parties to elevate the aforementioned issues to AVA Olvida.[20] respondent's Motion to Withdraw. On December 16, 2002, respondent filed a
Motion for Reconsideration[25] where it stressed that the Submission
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred Agreement was void because the Union did not consent thereto. Respondent
to AVA Olvida. Respondent again raised its objections, specifically arguing pointed out that the Union had not issued any resolution duly authorizing the
that the persons who signed the complaint were not the authorized individual employees or NFL to file the notice of mediation with the NCMB.
representatives of the Union indicated in the Submission Agreement nor
were they parties to the MOA. AVA Olvida directed respondent to file a
formal motion to withdraw its submission to voluntary arbitration. Cullo filed a Comment/Opposition[26] to respondent's Motion for
On October 16, 2002, respondent filed its Motion to Withdraw.[21] Cullo then Reconsideration. Again, Cullo admitted that the case was not initiated by the
filed an Opposition[22] where the same was captioned: IHEU-NFL, to wit:

NATIONAL FEDERATION OF LABOR

And 79 Individual Employees, Union Members, The case was initiated by complainants by filling up Revised Form No. 1 of
the NCMB duly furnishing respondent, copy of which is hereto attached as
Complainants, Annex A for reference and consideration of the Honorable Voluntary
Arbitrator. There is no mention there of Insular Hotel Employees Union, but
-versus- only National Federation of Labor (NFL). The one appearing at the
Waterfront Insular Hotel Davao, Submission Agreement was only a matter of filling up the blanks particularly
on the question there of Union; which was filled up with Insular Hotel
Respondent. Employees Union-NFL. There is nothing there that indicates that it is a
complainant as the case is initiated by the individual workers and National On May 9, 2003, respondent filed its Position Paper Ad Cautelam,[30] where
Federation of Labor, not by the local union. The local union was not included it declared, among others, that the same was without prejudice to its earlier
as party-complainant considering that it was a party to the assailed MOA.[27] objections against the jurisdiction of the NCMB and AVA Olvida and the
standing of the persons who filed the notice of mediation.
On March 18, 2003, AVA Olvida issued a Resolution[28] denying
respondent's Motion for Reconsideration. He, however, ruled that respondent Cullo, now using the caption Insular Hotel Employees Union-
was correct when it raised its objection to NFL as proper party-complainant, NFL, Complainant, filed a Comment[31] dated June 5, 2003. On June 23,
thus: 2003, respondent filed its Reply.[32]

Anent to the real complainant in this instant voluntary arbitration case, the Later, respondent filed a Motion for Inhibition[33] alleging AVA Olvida's bias
respondent is correct when it raised objection to the National Federation of and prejudice towards the cause of the employees. In an Order[34] dated July
Labor (NFL) and as proper party-complainants. 25, 2003, AVA Olvida voluntarily inhibited himself out of delicadeza and
ordered the remand of the case to the NCMB.
The proper party-complainant is INSULAR HOTEL EMPLOYEES
UNION-NFL, the recognized and incumbent bargaining agent of the rank- On August 12, 2003, the NCMB issued a Notice requiring the parties to
and-file employees of the respondent hotel. In the submission agreement of appear before the conciliator for the selection of a new voluntary arbitrator.
the parties dated August 29, 2002, the party complainant written is
INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL In a letter[35] dated August 19, 2003 addressed to the NCMB, respondent
FEDERATION OF LABOR and 79 other members. reiterated its position that the individual union members have no standing to
file the notice of mediation before the NCMB. Respondent stressed that the
However, since the NFL is the mother federation of the local union, and complaint should have been filed by the Union.
signatory to the existing CBA, it can represent the union, the officers, the
members or union and officers or members, as the case may be, in all stages On September 12, 2003, the NCMB sent both parties a Notice[36] asking
of proceedings in courts or administrative bodies provided that the issue of them to appear before it for the selection of the new voluntary arbitrator.
the case will involve labor-management relationship like in the case at bar. Respondent, however, maintained its stand that the NCMB had no
jurisdiction over the case. Consequently, at the instance of Cullo, the NCMB
The dispositive portion of the March 18, 2003 Resolution of AVA Olvida approved ex parte the selection of AVA Montejo as the new voluntary
reads: arbitrator.

WHEREFORE, premises considered, the motion for reconsideration filed by On April 5, 2004, AVA Montejo rendered a Decision[37] ruling in favor of
respondent is DENIED. The resolution dated November 11, 2002 is modified Cullo, the dispositive portion of which reads:
in so far as the party-complainant is concerned; thus, instead of National
Federation of Labor and 79 individual employees, union members, shall be WHEREOF, in view of the all the foregoing, judgment is hereby rendered:
Insular Hotel Employees Union-NFL et. al., as stated in the joint submission 1. Declaring the Memorandum of Agreement in question as invalid
agreement dated August 29, 2002. Respondent is directed to comply with the as it is contrary to law and public policy;
decision of this Arbitrator dated November 11, 2002,
2. Declaring that there is a diminution of the wages and other benefits
No further motion of the same nature shall be entertained.[29] of the Union members and officers under the said invalid MOA.
3. Ordering respondent management to immediately reinstate the Hence, herein petition, with Cullo raising the following issues for this
workers wage rates and other benefits that they were receiving and enjoying Court's resolution, to wit:
before the signing of the invalid MOA;
I.
4. Ordering the management respondent to pay attorneys fees in an
amount equivalent to ten percent (10%) of whatever total amount that the WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
workers union may receive representing individual wage differentials. COMMITTED SERIOUS ERRORS IN FINDING THAT THE
ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION
As to the other claims of the Union regarding diminution of other benefits, OVER THE CASE SIMPLY BECAUSE THE NOTICE OF MEDIATION
this accredited voluntary arbitrator is of the opinion that she has no authority DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT
to entertain, particularly as to the computation thereof. ONLY THE AFFILIATE FEDERATION THEREBY DISREGARDING
THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES
SO ORDERED.[38] AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only THE LOCAL UNION.
assailed the Decision in so far as it did not categorically order respondent to II.
pay the covered workers their differentials in wages reckoned from the
effectivity of the MOA up to the actual reinstatement of the reduced wages WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831. COMMITTED SERIOUS ERROR BY DISREGARDING THE
Respondent, for its part, questioned among others the jurisdiction of the PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE
NCMB. Respondent maintained that the MOA it had entered into with the UNPROVEN ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS
officers of the Union was valid. Respondent's petition was docketed as CA- SUFFERING FROM FINANCIAL CRISIS.
G.R. SP No. 83657. Both cases were consolidated by the CA.
III.
[39]
On October 11, 2005, the CA rendered a Decision ruling in favor of
respondent, the dispositive portion of which reads: THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY
ERRED IN CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE
WHEREFORE, premises considered, the petition for review in CA-G.R. SP APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION
No. 83657 is hereby GRANTED, while the petition in CA-G.R. SP No. OF THE LABOR CODE WHICH, IN EFFECT, ALLOWS THE
83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004 DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES FROM
rendered by AVA Rosalina L. Montejo is hereby REVERSED and a new one ITS ADOPTION HENCEFORTH.[42]
entered declaring the Memorandum of Agreement dated May 8, 2001
VALID and ENFORCEABLE. Parties are DIRECTED to comply with the The petition is not meritorious.
terms and conditions thereof. Anent the first error raised, Cullo argues that the CA erred when it
SO ORDERED. [40] overlooked the fact that before the case was submitted to voluntary
arbitration, the parties signed a Submission Agreement which mentioned the
Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, name of the local union and not only NFL. Cullo, thus, contends that the CA
denied by the CA in a Resolution[41] dated July 13, 2006. committed error when it ruled that the voluntary arbitrator had no jurisdiction
over the case simply because the Notice of Mediation did not state the name WHEREFORE, premises considered, the motion for reconsideration filed by
of the local union thereby disregarding the Submission Agreement which respondent is DENIED. The resolution dated November 11, 2002, is
states the names of local union as Insular Hotel Employees Union-NFL.[43] modified in so far as the party complainant is concerned, thus, instead of
National Federation of Labor and 79 individual employees, union members,
In its Memorandum,[44] respondent maintains its position that the NCMB and shall be Insular Hotel Employees Union-NFL et. al., as stated in the joint
Voluntary Arbitrators had no jurisdiction over the complaint. Respondent, submission agreement dated August 29, 2002. Respondent is directed to
however, now also contends that IHEU-NFL is a non-entity since it comply with the decision of this Arbitrator dated November 11, 2002.[50]
is DIHFEU-NFL which is considered by the DOLE as the only registered
union in Waterfront Davao.[45] Respondent argues that the Submission After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted Insular
Agreement does not name the local union DIHFEU-NFL and that it had Hotel Employees Union-NFL et. al., Complainant as the caption in all his
timely withdrawn its consent to arbitrate by filing a motion to withdraw. subsequent pleadings. Respondent, however, was still adamant that neither
Cullo nor the individual employees had authority to file the case in behalf of
A review of the development of the case shows that there has been much the Union.
confusion as to the identity of the party which filed the case against
respondent. In the Notice of Mediation[46] filed before the NCMB, it stated While it is undisputed that a submission agreement was signed by
that the union involved was DARIUS JOVES/DEBBIE PLANAS ET. AL., respondent and IHEU-NFL, then represented by Joves and Cullo, this Court
National Federation of Labor. In the Submission Agreement,[47] however, it finds that there are two circumstances which affect its validity: first, the
stated that the union involved was INSULAR HOTEL EMPLOYEES Notice of Mediation was filed by a party who had no authority to do
UNION-NFL. so; second, that respondent had persistently voiced out its objection
questioning the authority of Joves, Cullo and the individual members of the
Furthermore, a perusal of the records would reveal that after signing the Union to file the complaint before the NCMB.
Submission Agreement, respondent persistently questioned the authority and
standing of the individual employees to file the complaint. Cullo then Procedurally, the first step to submit a case for mediation is to file a notice
clarified in subsequent documents captioned as National Federation of Labor of preventive mediation with the NCMB. It is only after this step that a
and 79 Individual Employees, Union Members, Complainants that the submission agreement may be entered into by the parties concerned.
individual complainants are not representing the union, but filing the
complaint through their appointed attorneys-in-fact.[48] AVA Olvida, Section 3, Rule IV of the NCMB Manual of Procedure provides who may
however, in a Resolution dated March 18, 2003, agreed with respondent that file a notice of preventive mediation, to wit:
the proper party-complainant should be INSULAR HOTEL EMPLOYEES Who may file a notice or declare a strike or lockout or request preventive
UNION-NFL, to wit: mediation. -
x x x In the submission agreement of the parties dated August 29, 2002, the
Any certified or duly recognized bargaining representative may file a
party complainant written is INSULAR HOTEL EMPLOYEES UNION-
notice or declare a strike or request for preventive mediation in cases of
NFL and not the NATIONAL FEDERATION OF LABOR and 79 other bargaining deadlocks and unfair labor practices. The employer may file a
members.[49] notice or declare a lockout or request for preventive mediation in the same
The dispositive portion of the Resolution dated March 18, 2003 of AVA cases. In the absence of a certified or duly recognized bargaining
Olvida reads: representative, any legitimate labor organization in the establishment may
file a notice, request preventive mediation or declare a strike, but only on judgment creditors go up their Calvary once more after more or less 15
grounds of unfair labor practice. years.The same, however, does not obtain in the instant case.

From the foregoing, it is clear that only a certified or duly recognized We note at this point that estoppel, being in the nature of a forfeiture, is not
bargaining agent may file a notice or request for preventive mediation. It is favored by law. It is to be applied rarelyonly from necessity, and only in
curious that even Cullo himself admitted, in a number of pleadings, that the extraordinary circumstances. The doctrine must be applied with great care
case was filed not by the Union but by individual members thereof. Clearly, and the equity must be strong in its favor.When misapplied, the doctrine of
therefore, the NCMB had no jurisdiction to entertain the notice filed before estoppel may be a most effective weapon for the accomplishment of
it. injustice. x x x (Italics supplied.)[53]

Even though respondent signed a Submission Agreement, it had, however, The question to be resolved then is, do the individual members of the Union
immediately manifested its desire to withdraw from the proceedings after it have the requisite standing to question the MOA before the NCMB? On this
became apparent that the Union had no part in the complaint. As a matter of note, Tabigue v. International Copra Export Corporation (INTERCO)[54] is
fact, only four days had lapsed after the signing of the Submission instructive:
Agreement when respondent called the attention of AVA Olvida in a
Manifestation with Motion for a Second Preliminary Conference[51] that the Respecting petitioners thesis that unsettled grievances should be referred to
persons who filed the instant complaint in the name of Insular Hotel voluntary arbitration as called for in the CBA, the same does not lie.The
Employees Union-NFL had no authority to represent the Union. Respondent pertinent portion of the CBA reads:
cannot be estopped in raising the jurisdictional issue, because it is basic that In case of any dispute arising from the interpretation or implementation of
the issue of jurisdiction may be raised at any stage of the proceedings, even
this Agreement or any matter affecting the relations of Labor and
on appeal, and is not lost by waiver or by estoppel. Management, the UNION and the COMPANY agree to exhaust all
In Figueroa v. People,[52] this Court explained that estoppel is the exception possibilities of conciliation through the grievance machinery. The committee
rather than the rule, to wit: shall resolve all problems submitted to it within fifteen (15) days after the
problems ha[ve] been discussed by the members. If the dispute or grievance
Applying the said doctrine to the instant case, the petitioner is in no way cannot be settled by the Committee, or if the committee failed to act on the
estopped by laches in assailing the jurisdiction of the RTC, considering that matter within the period of fifteen (15) days herein stipulated,
he raised the lack thereof in his appeal before the appellate court. At that the UNION and the COMPANY agree to submit the issue to Voluntary
time, no considerable period had yet elapsed for laches to attach. True, delay Arbitration. Selection of the arbitrator shall be made within seven (7) days
alone, though unreasonable, will not sustain the defense of estoppel by from the date of notification by the aggrieved party. The Arbitrator shall be
laches unless it further appears that the party, knowing his rights, has not selected by lottery from four (4) qualified individuals nominated by in equal
sought to enforce them until the condition of the party pleading laches has in numbers by both parties taken from the list of Arbitrators prepared by the
good faith become so changed that he cannot be restored to his former state, National Conciliation and Mediation Board (NCMB). If the Company and
if the rights be then enforced, due to loss of evidence, change of title, the Union representatives within ten (10) days fail to agree on the Arbitrator,
intervention of equities, and other causes. In applying the principle of the NCMB shall name the Arbitrator. The decision of the Arbitrator shall be
estoppel by laches in the exceptional case of Sibonghanoy, the Court therein final and binding upon the parties. However, the Arbitrator shall not have the
considered the patent and revolting inequity and unfairness of having the authority to change any provisions of the Agreement.The cost of arbitration
shall be borne equally by the parties.
 Petitioners have not, however, been duly authorized to represent the Even granting that petitioner Union was affiliated with NFL, still the
union. Apropos is this Courts pronouncement in Atlas Farms, Inc. v. National relationship between that of the local union and the labor federation or
Labor Relations Commission, viz: national union with which the former was affiliated is generally understood
to be that of agency, where the local is the principal and the federation the
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall agency. Being merely an agent of the local union, NFL should have
name or designate their respective representatives to the grievance machinery presented its authority to file the Notice of Mediation. While We commend
and if the grievance is unsettled in that level, it shall automatically be NFL's zealousness in protecting the rights of lowly workers, We cannot,
referred to the voluntary arbitrators designated in advance by parties to a however, allow it to go beyond what it is empowered to do.
CBA. Consequently, only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary As provided under the NCMB Manual of Procedures, only a certified or
arbitrators. (Emphasis and underscoring supplied.)[55] duly recognized bargaining representative and an employer may file a notice
of mediation, declare a strike or lockout or request preventive mediation. The
Collective Bargaining Agreement (CBA), on the other, recognizes that
If the individual members of the Union have no authority to file the case, DIHFEU-NFL is the exclusive bargaining representative of all permanent
does the federation to which the local union is affiliated have the standing to employees. The inclusion of the word NFL after the name of the local union
do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of merely stresses that the local union is NFL's affiliate. It does not, however,
Labor and Employment[56] is enlightening, thus: mean that the local union cannot stand on its own. The local union owes its
creation and continued existence to the will of its members and not to the
x x x A local union does not owe its existence to the federation with which it federation to which it belongs. The spring cannot rise higher than its source,
is affiliated. It is a separate and distinct voluntary association owing its so to speak.[58]
creation to the will of its members. Mere affiliation does not divest the
In its Memorandum, respondent contends that IHEU-NFL is a non-entity
local union of its own personality, neither does it give the mother
and that DIHFEU-NFL is the only recognized bargaining unit in their
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 establishment. While the resolution of the said argument is already moot and
latter. Hence, local unions are considered principals while the federation is academic given the discussion above, this Court shall address the same
deemed to be merely their agent. x x x[57] nevertheless.

Based on the foregoing, this Court agrees with approval with the disquisition While the November 16, 2006 Certification[59] of the DOLE clearly states
of the CA when it ruled that NFL had no authority to file the complaint in that IHEU-NFL is not a registered labor organization, this Court finds that
behalf of the individual employees, to wit: respondent is estopped from questioning the same as it did not raise the said
issue in the proceedings before the NCMB and the Voluntary Arbitrators. A
Anent the first issue, We hold that the voluntary arbitrator had no perusal of the records reveals that the main theory posed by respondent was
jurisdiction over the case. Waterfront contents that the Notice of Mediation whether or not the individual employees had the authority to file the
does not mention the name of the Union but merely referred to the National complaint notwithstanding the apparent non-participation of the union.
Federation of Labor (NFL) with which the Union is affiliated. In the Respondent never put in issue the fact that DIHFEU-NFL was not the same
subsequent pleadings, NFL's legal counsel even confirmed that the case was as IHEU-NFL. Consequently, it is already too late in the day to assert the
not filed by the union but by NFL and the individual employees named in the same.
SPAs which were not even dated nor notarized.
Anent the second issue raised by Cullo, the same is again without merit. the contents thereof. Moreover, it bears to point out that respondent's audited
financial statements covering the years 2001 to 2005 show that it still
Cullo contends that respondent was not really suffering from serious losses continues to suffer losses.[64]
as found by the CA. Cullo anchors his position on the denial by the Wage
Board of respondent's petition for exemption from Wage Order No. RTWPB- Finally, anent the last issue raised by Cullo, the same is without merit.
X1-08 on the ground that it is a distressed establishment.[60] In said denial,
the Board ruled: Cullo argues that the CA must have erred in concluding that Article 100 of
the Labor Code applies only to benefits already enjoyed at the time of the
A careful analysis of applicant's audited financial statements showed that promulgation of the Labor Code.
during the period ending December 31, 1999, it registered retained earnings
amounting to P8,661,260.00. Applicant's interim financial statements for Article 100 of the Labor Code provides:
the quarter ending June 30, 2000 cannot be considered, as the same was PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF
not audited. Accordingly, this Board finds that applicant is not qualified for BENEFITS- Nothing in this Book shall be construed to eliminate or in any
exemption as a distressed establishment pursuant to the aforecited criteria.[61] way diminish supplements, or other employee benefits being enjoyed at the
In its Decision, the CA held that upholding the validity of the MOA would time of the promulgation of this Code.
mean the continuance of the hotel's operation and financial viability, to wit: On this note, Apex Mining Company, Inc. v. NLRC[65] is instructive, to wit:
x x x We cannot close Our eyes to the impending financial distress that an Clearly, the prohibition against elimination or diminution of benefits set out
employer may suffer should the terms of employment under the said CBA in Article 100 of the Labor Code is specifically concerned with benefits
continue. already enjoyed at the time of the promulgation of the Labor Code. Article
If indeed We are to tilt the balance of justice to labor, then We would be 100 does not, in other words, purport to apply to situations arising after the
inclined to favor for the nonce petitioner Waterfront. To uphold the validity promulgation date of the Labor Code x x x.[66]
of the MOA would mean the continuance of the hotel's operation and Even assuming arguendo that Article 100 applies to the case at bar, this
financial viability. Otherwise, the eventual permanent closure of the hotel
Court agrees with respondent that the same does not prohibit a union from
would only result to prejudice of the employees, as a consequence thereof, offering and agreeing to reduce wages and benefits of the employees.
will necessarily lose their jobs.[62] In Rivera v. Espiritu,[67] this Court ruled that the right to free collective
In its petition before the CA, respondent submitted its audited financial bargaining, after all, includes the right to suspend it, thus:
statements[63] which show that for the years 1998, 1999, until September 30, A CBA is a contract executed upon request of either the employer or the
2000, its total operating losses amounted to P48,409,385.00. Based on the exclusive bargaining representative incorporating the agreement reached
foregoing, the CA was not without basis when it declared that respondent after negotiations with respect to wages, hours of work and all other terms
was suffering from impending financial distress. While the Wage Board and conditions of employment, including proposals for adjusting any
denied respondent's petition for exemption, this Court notes that the denial grievances or questions arising under such agreement. The primary purpose
was partly due to the fact that the June 2000 financial statements then of a CBA is the stabilization of labor-management relations in order to create
submitted by respondent were not audited. Cullo did not question nor a climate of a sound and stable industrial peace. In construing a CBA, the
discredit the accuracy and authenticity of respondent's audited financial courts must be practical and realistic and give due consideration to the
statements. This Court, therefore, has no reason to question the veracity of
context in which it is negotiated and the purpose which it is intended to the respondent employees in the case at bar. Moreover, it bears to stress that
serve. all the employees were assisted by Rojas, DIHFEU-NFL's president, who
even co-signed each contract.
The assailed PAL-PALEA agreement was the result of voluntary
collective bargaining negotiations undertaken in the light of the severe Stipulated in each Reconfirmation of Employment were the new salary and
financial situation faced by the employer, with the peculiar and unique benefits scheme. In addition, it bears to stress that specific provisions of the
intention of not merely promoting industrial peace at PAL, but new contract also made reference to the MOA. Thus, the individual members
preventing the latters closure. We find no conflict between said agreement of the union cannot feign knowledge of the execution of the MOA. Each
and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. contract was freely entered into and there is no indication that the same was
One is to promote industrial stability and predictability. Inasmuch as the attended by fraud, misrepresentation or duress. To this Court's mind, the
agreement sought to promote industrial peace at PAL during its signing of the individual Reconfirmation of Employment should, therefore,
rehabilitation, said agreement satisfies the first purpose of Article 253-A. The be deemed an implied ratification by the Union members of the MOA.
other is to assign specific timetables wherein negotiations become a matter of
right and requirement. Nothing in Article 253-A, prohibits the parties from In Planters Products, Inc. v. NLRC,[71] this Court refrained from declaring a
waiving or suspending the mandatory timetables and agreeing on the CBA invalid notwithstanding that the same was not ratified in view of the
remedies to enforce the same. fact that the employees had enjoyed benefits under it, thus:

In the instant case, it was PALEA, as the exclusive bargaining agent of Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the
PALs ground employees, that voluntarily entered into the CBA with PAL. It Implementing Rules, the parties to a collective [bargaining] agreement are
was also PALEA that voluntarily opted for the 10-year suspension of the required to furnish copies of the appropriate Regional Office with
CBA. Either case was the unions exercise of its right to collective accompanying proof of ratification by the majority of all the workers in a
bargaining. The right to free collective bargaining, after all, includes the bargaining unit. This was not done in the case at bar. But we do not declare
right to suspend it.[68] the 1984-1987 CBA invalid or void considering that the employees have
enjoyed benefits from it. They cannot receive benefits under provisions
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's favorable to them and later insist that the CBA is void simply because other
Constitution and By-Laws specifically provides that the results of the provisions turn out not to the liking of certain employees. x x x. Moreover,
collective bargaining negotiations shall be subject to ratification and approval the two CBAs prior to the 1984-1987 CBA were not also formally ratified,
by majority vote of the Union members at a meeting convened, or by yet the employees are basing their present claims on these CBAs. It is
plebiscite held for such special purpose.[69] Accordingly, it is undisputed that iniquitous to receive benefits from a CBA and later on disclaim its
the MOA was not subject to ratification by the general membership of the validity.[72]
Union. The question to be resolved then is, does the non-ratification of the
MOA in accordance with the Union's constitution prove fatal to the validity Applied to the case at bar, while the terms of the MOA undoubtedly reduced
thereof? the salaries and certain benefits previously enjoyed by the members of the
Union, it cannot escape this Court's attention that it was the execution of the
It must be remembered that after the MOA was signed, the members of the MOA which paved the way for the re-opening of the hotel, notwithstanding
Union individually signed contracts denominated as Reconfirmation of its financial distress. More importantly, the execution of the MOA allowed
Employment.[70] Cullo did not dispute the fact that of the 87 members of the respondents to keep their jobs. It would certainly be iniquitous for the
Union, who signed and accepted the Reconfirmation of Employment, 71 are members of the Union to sign new contracts prompting the re-opening of the
hotel only to later on renege on their agreement on the fact of the non- WHEREFORE, premises considered, the petition is DENIED. The
ratification of the MOA. Decision dated October 11, 2005, and the Resolution dated July 13, 2006 of
the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP
In addition, it bears to point out that Rojas did not act unilaterally when he No. 83831 and CA-G.R. SP No. 83657, are AFFIRMED.
negotiated with respondent's management. The Constitution and By-Laws of
DIHFEU-NFL clearly provide that the president is authorized to represent
the union on all occasions and in all matters in which representation of the
union may be agreed or required.[73] Furthermore, Rojas was properly SO ORDERED.
authorized under a Board of Directors Resolution[74] to negotiate with
respondent, the pertinent portions of which read:

SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a

meeting of the Board of Directors of the DIHFEU-NFL, on 28 Feb. 2001
with a quorum duly constituted, the following resolutions were unanimously
approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001

be approved ratified and adopted;

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the

DIHFEU-NFL, be hereby authorized to negotiate with Waterfront
Insular Hotel Davao and to work for the latter's acceptance of the
proposals contained in DIHFEU-NFL Manifesto; and

RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized

to sign any and all documents to implement, and carry into effect, his
foregoing authority.[75]

Withal, while the scales of justice usually tilt in favor of labor, the peculiar
circumstances herein prevent this Court from applying the same in the instant
petition. Even if our laws endeavor to give life to the constitutional policy on
social justice and on the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and enforcement in
the interest of fair play.[76]
 COASTAL SUBIC BAY TERMINAL, INC. vs.DEPARTMENT OF electionbefore the Med-Arbiter. The rank-and-file unioninsists that it is
LABOR and EMPLOYMENT-OFFICE OF THE SECRETARY, alegitimate labororganization having been issued a charter certificate by
COASTAL SUBIC BAYTERMINAL, INC. SUPERVISORY theAssociated Labor Union (ALU), and the supervisory unionby the
Associated Professional, Supervisory, Office andTechnical Employees
UNIONAPSOTEU,and COASTAL SUBIC BAY TERMINAL, INC.
Union (APSOTEU). Privaterespondents also alleged that the
RANK-AND-FILEUNIONALU-TUCP, establishment in whichthey sought to operate was unorganized.
 Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI)opposed both
November 20, 2006|Quisumbing, J. | Union Chartering/Affiliation:
petitions for certification election allegingthat the rank-and-fileunion and
Requirements of Registration supervisory union werenot legitimate labor organizations, and that the
proposedbargaining units were not particularly described.
SUMMARY:Private respondents CSBTIRFU (rank-and-file union) and  Med-Arbiter:Dismissed, without prejudice torefiling, both petitions
CSBTISU (supervisors union) both filed petitions for certification election which had been consolidated. It held that the ALU and APSOTEU are
before the MA separately. The rank-and-file union insists that it is a one andthe same federation having a common set of officers. Thus,the
legitimate labor organization having been issued a charter certificate by the supervisory and the rank-and-fileunions were in effectaffiliated with only
ALU, while the supervisory union by the APSOTEU. Petitioner opposed the one federation.
petitions for certification election alleging that both unions were not  SOLE: Reversed the decision of the Med-Arbiter. It ruled thatCSBTISU
and CSBTIRFUhave separate legalpersonalities to file their separate
legitimate labor organizations and that the proposed bargaining units were
petitions for certificationelection. It held that APSOTEU is a
not particularly described. The MA dismissed the petition. The SOLE legitimatelabor organization because it was properly registeredpursuant
reversed the decision of the MA. The CA affirmed the decision of the SOLE. to the 1989Revised Rules and Regulations implementing RA No. 6715.It
The Court GRANTED the petition, AFFIRMING the decision of the MA, further ruled that ALU and APSOTEU are separate anddistinct labor
holding that the ALU and APSOTEU are one and the same federation having unions having separate certificates ofregistration from the DOLE. They
a common set of officers. Thus, the supervisory and the rank-and-file unions also have different setsof locals. The Secretary declared CSBTIRFUand
were in effect affiliated with only one federation. CSBTISUas legitimate labor organizations having been
charteredrespectively by ALU and APSOTEU after submitting allthe
DOCTRINE:The purpose of affiliation of the local unions into a common requirements with the BLR. Accordingly, the Secretary ordered the
holding ofseparate certification election.
enterprise is to increase the collective bargaining power in respect of the
o MR was DENIED.
terms and conditions of labor. When there is commingling of officers of a
 CA: Affirmed the decision ofthe SOLE, holding that there was no grave
rank-and-file union with a supervisory union, the constitutional policy on abuse ofdiscretion on the part of the Secretary; its findings aresupported
labor is circumvented. Labor organizations should ensure the freedom of by evidence on record; and thus should beaccorded with respect and
employees to organize themselves for the purpose of leveling the bargaining finality.
process but also to ensure the freedom of workingmen and to keep open the o MR was DENIED.
corridor of opportunity to enable them to do it for themselves.
RULING:WHEREFORE, the petition is GRANTED. The Court ofAppeals’
Decision dated August 31, 2001, in CA-G.R. SPNo. 54128 and the
FACTS: Resolution dated February 5, 2003 areSET ASIDE. The decision of the Med-
Arbiteris herebyAFFIRMED.
 July 8, 1998: Private respondents Coastal Subic BayTerminal, Inc. Rank-
and-FileUnion (CSBTIRFU)andCoastal Subic Bay Terminal, Inc.
Supervisory Union(CSBTISU) filed separate petitions for certification
WoN the supervisory and therank-and-fileunions can file separate  The records in this case showed that APSOTEU wasregistered on March
petitions for certification election. – YES. 1, 1991. Accordingly, the lawapplicable at that time was Section 2, Rule
II, Book V ofthe Implementing Rules, and not DO No. 9which took
 The issue on the status of the supervisory union CSBTISUdepends on the effect only on June 21, 1997. Thus, consideringfurther that APSOTEU’s
status of APSOTEU, its motherfederation. principal office is located inDiliman, Quezon City, and itsregistration
o Petitioner argues that APSOTEU improperlysecured its was filed with the NCR Regional Office, thecertificate of registration is
registration from the DOLE Regional Directorand not from the valid.
BLR; that it is the BLR that is authorizedto process applications  The petitioner misapplied Villar v. Inciong.In saidcase, there was no
and issue certificates of registrationin accordance with our ruling record in the BLR that AmigoEmployees Union was registered.
in Phil. Association of FreeLabor Unions v. Secretary of
Labor;that the certificates ofregistration issued by the DOLE
Regional Directorpursuant to the rules are questionable, and WoN the CA erred in its application of staredecisis when it upheld the
possibly evenvoid ab initio for being ultra vires; and that the CA Secretary’s ruling thatAPSOTEU is a legitimate labor organization and
erred when it ruled that the law applicable at thetime of itspersonality cannot be assailed unless in an independentaction for
APSOTEU’s registration was the 1989 RevisedImplementing cancellation of registration certificate. – NO.
Rules and Regulations of RA No. 6715.
o Petitioner insists that APSOTEU lacks legalpersonality, and its  Section 5, Rule V, Book V of the Implementing Rules provides that “the
chartered affiliate CSBTISUcannotattain the status of a labor organization orworkers’ association shall be deemed registered
legitimate labor organization to file apetition for certification and vested withlegal personality on the date of issuance of its certificate
election. It relies on Villar v.Inciong,where we held therein that ofregistration…” Thus, APSOTEU is a legitimate labor organization and
Amigo EmployeesUnion was not a duly registered independent hasauthority to issue charter to its affiliates and it may issue alocal
union absentany record of its registration with the Bureau. charter certificate to CSBTISUand correspondingly,CSBTISUis
 Article 235of the Labor Code providesthat applications for registration legitimate.
shall be acted upon by theBureau, which, as defined under the Labor
Code meansthe BLR and/or the LRD in theRegional Offices of the
Department of Labor.Section 2, Rule II, Book V of the 1989 WoN ALU, a rank-and-fileunion and APSOTEU, asupervisory union
RevisedImplementing Rules of the Labor Code and the Implementing one and the same because of thecommonalities between them. Are they
Rules specifically Section 1, Rule III ofBook V, as amended by DO No.
9, provide the rules on where to file the application for registration of any commingled? – NO.
federation, national or industry union or trade union center.
 The petitioner contends that applying by analogy, thedoctrine of piercing
o The DOLE issued DO No. 40-03,which tookeffect on March 15,
the veil of corporate fiction, APSOTEUand ALU are the same
2003, further amended Book V of theabove implementing
federation. Private respondentsdisagree.
rules,explicitly providing that applications for registration of
labororganizations shall be filed either with the Regional  As discussed above, once a labor union attainsthe status of a legitimate
Officeor with the BLR. labor organization, it continues assuch until its certificate of registration
o Even after the amendments, the rules did not divest theRegional is cancelled orrevoked in an independent action for
Office and the BLR of their jurisdiction overapplications for cancellation.Inaddition, the legal personality of a labor
registration by labor organizations. Theamendments to the organizationcannot be collaterally attacked.
implementing rules merely specifiedthat when the application o Thus, when thepersonality of the labor organization is
was filed with the RegionalOffice, the application would be questioned in thesame manner the veil of corporate fiction is
acted upon by the BLR. pierced, theaction partakes the nature of a collateral attack.
Hence, inthe absence of any independent action for cancellation
 ofregistration against either APSOTEU or ALU, and unlessand ofsupervisory unions. For as long as they are affiliated withthe
until their registrations are cancelled, each continuesto possess a APSOTEU and ALU, the supervisory and rank-and-fileunions both do
separate legal personality. The CSBTIRFUand CSBTISUare not meet the criteria to attain the status oflegitimate labor organizations,
therefore affiliated with distinct andseparate federations, despite and thus could notseparately petition for certification elections.
the commonalities ofAPSOTEU and ALU.  The purpose of affiliation of the local unions into acommon enterprise is
 Under the rules implementing the Labor Code, achartered local union to increase the collective bargainingpower in respect of the terms and
acquires legal personality throughthe charter certificate issued by a duly conditions of labor.When there is commingling of officers of a rank-and-
registeredfederation or national union, and reported to the fileunion with a supervisory union, the constitutional policy onlabor is
RegionalOffice in accordance with the rules implementing the circumvented. Labor organizations should ensurethe freedom of
LaborCode.A local union does not owe its existence to thefederation employees to organize themselves for thepurpose of leveling the
with which it is affiliated. It is a separate anddistinct voluntary bargaining process but also toensure the freedom ofworkingmen and to
association owing its creation to the willof its members. Mere affiliation keep open the corridor of opportunity toenable them to do it for
does not divest the localunion of its own personality, neither doesit give themselves.
the mother federation the license to actindependently of the local union.
It only gives rise to acontract of agency, where the former acts in
representationof the latter.Hence, local unions are considered NOTES:
principalsof the latter.Hence, local unions are considered principalswhile
the federation is deemed to be merely their agent.As such principals, the  Section 2, Rule II, Book V of the 1989 RevisedImplementing Rules. -
unions are entitled to exercise therights and privileges of a legitimate Where to file application; procedure.—Any nationallabor organization
labor organization,including the right to seek certification as the sole or labor federation or local union may file anapplication for registration
andexclusive bargaining agent in the appropriate employerunit. with the Bureau or the Regional Officewhere the applicant’s principal
 A word of caution though, under Article 245 of the offices is located. The Bureau orthe Regional Office shall immediately
LaborCode,supervisory employees are not eligible formembership in a process and approve ordeny the application. In case of approval, the
labor union of rank-and-fileemployees.The supervisory employees are Bureau or theRegional Office shall issue the registration certificate
allowed to form their ownunion but they are not allowed to join the rank- withinthirty (30) calendar days from receipt of the application,
and-fileunion because of potential conflicts of interest.Further, toavoid a togetherwith all the requirements for registration as hereinafterprovided.
situation where supervisors would merge with therank-and-fileor where  Section 1, Rule III of Book V, as amended by Department Order No. 9.
the supervisors’ labor union wouldrepresent conflicting interests, a local - Where to file applications.—The application forregistration of any
supervisors’ unionshould not be allowed to affiliate with the federation, national or industry union or tradeunion center shall be filed
nationalfederation of unions of rank-and-fileemployees where with the Bureau. Where the applicationis filed with the Regional Office,
thatfederation actively participates in the union activity withinthe the same shall be immediatelyforwarded to the Bureau within forty-
company.Thus, the limitation is not confined to a caseof supervisors eight(48) hours from filingthereof, together with all the documents
wanting to join a rank-and-file union. The prohibition extends to a supporting theregistration.
supervisors’local union applying for membership in a nationalfederation The applications for registration of an independent union shall
the members of which include local unions ofrank-and-fileemployees. befiled with and acted upon by the Regional Office where theapplicant’s
 In the instant case, the national federations that exist asseparate entities principal office is located ….
to which the rank-and-fileandsupervisory unions are separately affiliated  Section 5, Rule V, Book V of the Implementing Rules. - Effect of
with, do have acommon set of officers. In addition, APSOTEU, registration.—The labor organization orworkers’ association shall be
thesupervisory federation, actively participates in the CSBTISUwhile deemed registered and vested withlegal personality on the date of
ALU, the rank-and-file federation, activelyparticipates in the issuance of its certificate ofregistration. Such legal personality cannot
CSBTIRFU,giving occasion to possibleconflicts of interest among the thereafter be subject tocollateral attack, but maybe questioned only in an
common officers of thefederation of rank-and-fileand the federation independentpetition for cancellation in accordance with these Rules.
SMCEU-PTGWO v. SM Packaging Products Employees Union-PDMP SMBP.All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.
September 12, 2007 | Chico-NazarioJ. | Chartered Local  On 17 August 1999, petitioner filed with the DOLE-NCR a petition
seeking the cancellation of respondents registration and its dropping
SUMMARY:PDMP, a trade union center, issued a charter certificate to from the rolls of legitimate labor organizations. In its petition, petitioner
respondent. Respondent submitted the requisite documents to the BLR for accused respondent of committing:
acquiring legal personality. BLR then issued a Certificate of Creation of o Rraud and falsification
Local or Chapter. Petitioner filed a petitioner for cancellation of registration o Non-compliance with registration requirements in obtaining
its certificate of registration.
alleging that PDMP is not a legitimate labor organization but a trade union
o Violations of Articles 239(a), (b) and (c) and 234(c) of the
center. Also Petitioner alleges that PDMP, as a trade union center, cannot Labor Code.
charter. The Court said that a trade union center is a legitimate labor org but  Moreover, petitioner claimed that PDMP is not a legitimate labor
agreed with petitioner that a trade union center cannot charter. organization, but a trade union center, hence, it cannot directly create a
local or chapter.
DOCTRINE: The power granted to labor organizations to directly create a  Regional Director issued an Order dismissing the allegations of fraud and
chapter or local through chartering is given to a federation or national union, misrepresentation, and irregularity in the submission of documents by
then a trade union center is without authority to charter directly. respondent. Regional Director Lim further ruled that respondent is
allowed to directly create a local or chapter. However, he found that
respondent did not comply with the 20% membership requirement
and, thus, ordered the cancellation of its certificate of registration
FACTS: and removal from the rolls of legitimate labor organizations.
 Respondent appealed to the BLR. BLR: Granted appeal
 Petitioner is the incumbent bargaining agent for the bargaining unit o As a chartered local union, appellant is not required to
comprised of the regular monthly-paid rank and file employees of the submit the number of employees and names of all its
three divisions of San Miguel Corporation (SMC), namely, the San members comprising at least 20% of the employees in the
Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines bargaining unit where it seeks to operate. Thus, the
(SMBP), and the San Miguel Packaging Products (SMPP), in all offices revocation of its registration based on non-compliance with
and plants of SMC, including the Metal Closure and Lithography Plant in the 20% membership requirement does not have any basis in
Laguna. the rules.
 It had been the certified bargaining agent for 20 years from 1987 to 1997. o Further, although PDMP is considered as a trade union
 Respondent is registered as a chapter of Pambansang Diwa ng center, it is a holder of Registration issued by the BLR,
Manggagawang Pilipino (PDMP). PDMP [Trade Union Center] issued a which bestowed upon it the status of a legitimate labor
Charter Certificate to responden. organization with all the rights and privileges to act as
 In compliance with registration requirements, respondent submitted the representative of its members for purposes of collective
requisite documents to the BLR for the purpose of acquiring legal bargaining agreement. On this basis, PDMP can charter or
personality.Upon submission of its charter certificate and other create a local, in accordance with the provisions of
documents, respondent was issued Certificate of Creation of Local or Department Order No. 9.
Chapter PDMP-01 by the BLR  CA: Dismissed petition. Affirmed BLR.
 Thereafter, respondent filed with the Med-Arbiter of the DOLE Regional o The [herein respondent] is an affiliate of a registered
Officer in the National Capital Region (DOLE-NCR), three separate federation PDMP, having been issued a charter certificate.
petitions for certification election to represent SMPP, SMCSU, and Under the rules we have reviewed, there is no need for
SMPPEU to show a membership of 20% of the employees of
 the bargaining unit in order to be recognized as a legitimate as that of the federation or national union, this fact shall be
labor union. indicated accordingly.
 Hence, the petition. o 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.
RULING:WHEREFORE, the instant Petition is GRANTED. The Decision  The Implementing Rules stipulate that a local or chapter may be directly
dated 09 March 2005 of the Court of Appeals in CA-GR SP No. 66200 created by a federation or national union. A duly constituted local or
isREVERSED and SET ASIDE. The Certificate of Registration of San chapter created in accordance with the foregoing shall acquire legal
Miguel Packaging Products Employees UnionPambansang Diwa ng personality from the date of filing of the complete documents with the
BLR.The issuance of the certificate of registration by the BLR or the
Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-
DOLE Regional Office is not the operative act that vests legal
PDMP DROPPED from the rolls of legitimate labor organizations. personality upon a local or a chapter under Department Order No.
9. Such legal personality is acquired from the filing of the complete
WHETHER RESPONDENT IS REQUIRED TO SUBMIT THE documentary requirements enumerated in Section 1, Rule VI
NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS
COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE PETITIONER:
BARGAINING UNIT WHERE IT SEEKS TO OPERATE.– YES. Petitioner insists that Section 3 of the Implementing Rules, as amended
by Department Order No. 9, violated Article 234 of the Labor Code
 The procedure for registration of a local or chapter of a labor when it provided for less stringent requirements for the creation of a
organization is provided in Book V of the Implementing Rules of the chapter or local. The Court disagrees.
Labor Code, as amended by Department Order No. 9 which took effect
on 21 June 1997, and again by Department Order No. 40 dated 17 COURT:
February 2003. The Implementing Rules as amended by D.O. No. 9  Article 234 of the Labor Code provides that an independent labor
should govern the resolution of the petition at bar since respondents organization acquires legitimacy only upon its registration with the BLR
petition for certification election was filed with the BLR in 1999; and  The foregoing pertains to the registration of an independent labor
that of petitioner on 17 August 1999. organization, association or group of unions or workers.
 The applicable Implementing Rules enunciates a two-fold procedure for  However, the creation of a branch, local or chapter is treated
the creation of a chapter or a local. The first involves the affiliation of an differently. This Court, in the landmark case of Progressive Development
independent union with a federation or national union or industry Corporation v. Secretary, Department of Labor and
union. The second, finding application in the instant petition, Employment, declared that when an unregistered union becomes a
involves the direct creation of a local or a chapter through the branch, local or chapter, some of the aforementioned requirements for
process of chartering registration are no longer necessary or compulsory. Whereas an applicant
 A duly registered federation or national union may directly create a for registration of an independent union is mandated to submit, among
local or chapter by submitting to the DOLE Regional Office or to the other things, the number of employees and names of all its members
BLR two copies of the following: comprising at least 20% of the employees in the bargaining unit where it
o A charter certificate issued by the federation or national seeks to operate, as provided under Article 234 of the Labor Code and
union indicating the creation or establishment of the Section 2 of Rule III, Book V of the Implementing Rules, the same is no
local/chapter; longer required of a branch, local or chapter.
o The names of the local/chapters officers, their addresses, and  REASON: The intent of the law in imposing less requirements in the
the principal office of the local/chapter; and case of a branch or local of a registered federation or national union is to
o The local/chapters constitution and by-laws; Provided, That encourage the affiliation of a local union with a federation or national
where the local/chapters constitution and by-laws is the same
 union in order to increase the local unions bargaining powers respecting bargaining; or for participating in the formulation of social and
terms and conditions of labor. employment policies, standards, and programs, and is duly registered
with the DOLE in accordance with Rule III, Section 2 of the
Implementing Rules.
WHETHER RESPONDENT’S CERTIFICATE OF REGISTRATION
WAS OBTAINED THROUGH FRAUD—NO.
 The Implementing Rules stipulate that a labor organization shall be
 This Court emphasizes that a direct challenge to the legitimacy of a labor deemed registered and vested with legal personality on the date of
organization based on fraud and misrepresentation in securing its issuance of its certificate of registration. Once a certificate of
certificate of registration is a serious allegation which deserves careful registration is issued to a union, its legal personality cannot be
scrutiny. Allegations thereof should be compounded with supporting subject to collateral attack.It may be questioned only in an independent
circumstances and evidence. The records of the case are devoid of such petition for cancellation in accordance with Section 5 of Rule V, Book V
evidence. Furthermore, this Court is not a trier of facts, and this doctrine of the Implementing Rules.
applies with greater force in labor cases. Findings of fact of  PDMP was registered as a trade union center and issued Registration
administrative agencies and quasi-judicial bodies, such as the BLR, Certificate by the BLR. Until the certificate of registration of PDMP is
which have acquired expertise because their jurisdiction is confined to cancelled, its legal personality as a legitimate labor organization
specific matters, are generally accorded not only great respect but even subsists. Once a union acquires legitimate status as a labor organization,
finality. it continues to be recognized as such until its certificate of registration is
cancelled or revoked in an independent action for cancellation. It bears
WHETHER RESPONDENT IS A LEGITIMATE LABOR to emphasize that what is being directly challenged is the personality
ORGANIZATION (SINCE PDMP IS A TRADE UNION CENTER)— of respondent as a legitimate labor organization and not that of
NO. PDMP. This being a collateral attack, this Court is without
jurisdiction to entertain questions indirectly impugning the
 PETITIONER: Respondent was not validly and legitimately created, legitimacy of PDMP.
for PDMP cannot create a local or chapter as it is not a legitimate labor PDMP CANNOT DIRECTLY CREATE A LOCAL OR CHAPTER. IT
organization, it being a trade union center. BEING A TRADE UNION CENTER

COURT: Firstly, this line of reasoning attempts to predicate that a trade DO 9 –Defines Trade Union Center.
union center is not a legitimate labor organization. In the process, the IRR of DO 9—provides that a federation or a national union may
legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the directly create a local chapter. No similar provision for a trade union
same contention premises that a trade union center cannot directly create center.
a local or chapter through the process of chartering.  Culling from its definition as provided by Department Order No. 9,
 the legal personality of a legitimate labor organization, such as PDMP, A trade union center is any group of registered national unions or
cannot be subject to a collateral attack. The law is very clear on this federations organized for the mutual aid and protection of its members;
matter. for assisting such members in collective bargaining; or for participating
 A TRADE UNION CENTER MAY BE A LEGIT LABOR ORG. in the formulation of social and employment policies, standards, and
Article 212 (h) of the Labor Code, as amended, defines alegitimate labor programs, and is duly registered with the DOLE in accordance with Rule
organization as any labor organization duly registered with the DOLE, III, Section 2 of the Implementing Rules.
and includes any branch or local thereof  The same rule provides that the application for registration of an industry
 On the other hand, a trade union center is any group of registered or trade union center shall be supported by the following:
national unions or federations organized for the mutual aid and
protection of its members; for assisting such members in collective
 o The list of its member organizations and their respective  Article 234 now includes the term trade union center, but interestingly,
presidents and, in the case of an industry union, the industry the provision indicating the procedure for chartering or creating a local
where the union seeks to operate; or chapter, namely Article 234-A, still makes no mention of a trade union
o The resolution of membership of each member organization, center.
approved by the Board of Directors of such union;  Also worth emphasizing is that even in the most recent amendment of the
o The name and principal address of the applicant, the names implementing rules,there was no mention of a trade union center as being
of its officers and their addresses, the minutes of its among the labor organizations allowed to charter.
organizational meeting/s, and the list of member  This Court deems it proper to apply the Latin maxim expressio unius est
organizations and their representatives who attended such exclusio alterius. Under this maxim of statutory interpretation, the
meeting/s; and expression of one thing is the exclusion of another.When certain
o A copy of its constitution and by-laws and minutes of its persons or things are specified in a law, contract, or will, an
ratification by a majority of the presidents of the member intention to exclude all others from its operation may be inferred.
organizations, provided that where the ratification was done The rule is restrictive in the sense that it proceeds from the premise that
simultaneously with the organizational meeting, it shall be the legislating body would not have made specific enumerations in a
sufficient that the fact of ratification be included in the statute if it had the intention not to restrict its meaning and confine its
minutes of the organizational meeting. terms to those expressly mentioned.
 Evidently, while a national union or federation is a labor  Therefore, since under the pertinent status and applicable
organization with at least ten locals or chapters or affiliates, each of implementing rules, the power granted to labor organizations to
which must be a duly certified or recognized collective bargaining directly create a chapter or local through chartering is given to a
agent;a trade union center, on the other hand, is composed of a federation or national union, then a trade union center is without
group of registered national unions or federations. authority to charter directly.
 The Implementing Rules, as amended by Department Order No. 9,
provide that a duly registered federation or national union may directly
create a local or chapter.  The ruling of this Court in the instant case is not a departure from the
 Department Order No. 9 mentions two labor organizations either of policy of the law to foster the free and voluntary organization of a strong
which is allowed to directly create a local or chapter through chartering a and united labor movement,and thus assure the rights of workers to self-
duly registered federation or a national union. Department Order No. 9 organization.
defines a "chartered local" as a labor organization in the private sector  REASON WHY THE LC ENSURES STRICT COMPLIANCE
operating at the enterprise level that acquired legal personality through a WITH PROCEDURAL REQUIREMENTS FOR
charter certificate, issued by a duly registeredfederation or national REGISTRATION: It has been observed that the formation of a local or
union and reported to the Regional Office in accordance with Rule III, chapter becomes a handy tool for the circumvention of union registration
Section 2-E of these Rules. requirements. Absent the institution of safeguards, it becomes a
convenient device for a small group of employees to foist a not-so-
RA 9481—Enumerates requirements of registration for a trade union. It desirable federation or union on unsuspecting co-workers and pare the
also provides that a federation or national union may directly create a need for wholehearted voluntariness, which is basic to free unionism.As
local chapter. No similar provision for a trade union center. a legitimate labor organization is entitled to specific rights under the
 Republic Act No. 9481 or An Act Strengthening the Workers Labor Code and involved in activities directly affecting public interest, it
Constitutional Right to Self-Organization, Amending for the Purpose is necessary that the law afford utmost protection to the parties affected
Presidential Decree No. 442, As Amended, Otherwise Known as the  In sum, although PDMP as a trade union center is a legitimate labor
Labor Code of the Philippines lapsed into law on 25 May 2007 and organization, it has no power to directly create a local or chapter. Thus,
became effective on 14 June 2007.This law further amends the Labor SMPPEU-PDMP cannot be created under the more lenient requirements
Code provisions on Labor Relations. for chartering, but must have complied with the more stringent rules for
 creation and registration of an independent union, including the 20%  October 26, 1993: APSOTEU filed for a petition for certification election
membership requirement. to be the sole and exclusive bargaining agent of the supervisory
employees of the Sugbuanon Rural Bank.
o The supervisory employees sought to be represented by the union
SUGBUANON RURAL BANK v LAGUESMA were:
 the Cashier of the bank’s main office
February 2, 2000 | Quisumbing, J. | Requirements for Registration – National  Cashier of the bank’s Mandaue Branch
Union or Federation  Accountant of the Mandaue Branch
 Acting Chief of the Loans Department
SUMMARY:Association of Professional, Supervisory, Office and Technical  The Med-Arbiter gave due course to the petition and set the pre-election
Employees Union (APSOTEU) is a legitimate labor organization affiliated conference between SRBI and APSOTEU.
with the Trade Union Congress of the Philippines (TUCP). Representing the  SRBI filed a motion to dismiss the union’s PCE based on two grounds:
supervisory employees of Sugbuanon Rural Bank, Inc. (SRBI), it filed for a o Members of APSOTEU were managerial or confidential employees,
thus disqualified from forming, joining, or assisting any labor
petition for certification election. SRBI opposed the said motion on the
organization
grounds that the employees the union seeks to represent are managerial  The bank attached the job description of the employees to
employees who are prohibited from joining labor organizations, and the support this ground
union is actually represented by the Association of Labor Unions (ALU) o Association of Labor Unions – Trade Unions Congress of the
which is also representing the rank-and file employees of the same bank. The Philippines (ALU-TUCP) is representing the union, and since ALU
Med-Arbiter denied the bank’s motion. The Court held that the bank failed to is representing the rank-and-file employees of SRBI, there was a
show that the union members were managerial employees. Further, absent an violation of the principle of separation of unions (in other words,
APSOTEU cannot represent supervisory employees when it is
order cancelling the union’s registration, the conduct of a certification
represented by or under ALU which represents rank-and-file
election may still proceed notwithstanding the company’s contention of the employees)
registration’s validity. The Court further held that ALU and APSOTEU, even  APSOTU opposed the bank’s motion, stating that its members were not
though they are both affiliated with TUCP, are distinct and separate unions: managerial employees but supervisory employees who are allowed by
ALU is not representing APSOTEU and APSOTEU is not acting as ALU’s the law to form, join, or assist unions.
alter ego. ALU merely helped APSOTEU in the initial stages of its o The members attached their affidavits describing the nature of their
organization; the rank-and-file employees represented by ALU and the respective duties in support of this contention.
 The Med-Arbiter denied the bank’s motion to dismiss. On appeal, the
supervisory employees represented by APSOTEU do not belong in the same
DOLE Secretary affirmed the Med-Arbiter. The certification election
union. was then ordered.
 SRBI then filed a motion to suspend proceedings which was denied by
DOCTRINE: A local union maintains its separate personality despite
the Med-Arbiter. The subsequent MR was likewise denied, so SRBI
affiliation with a larger national federation. appealed the order of denial to the DOLE Secretary.
 SRBI likewise filed with the DOLE Regional Office a petition to cancel
FACTS: APSOTEU’s registration on the ground that its members were actually
managerial employees.
 Sugbuanon Rural Bank – Association of Professional, Supervisory,  Meanwhile, DOLE Undersecretary (acting on behalf of the Secretary),
Office, and Technical Employees Union (SRBI-APSOTEU) is a denied SRBI’s appeal:
legitimate labor organization affiliated with the Trade Unions Congress
of the Philippines (TUCP).
 o APSOTEU was a legitimate labor organization and is therefore  However, in this case, it was not shown that the said employees had
entitled to all the rights and privileges under the law, including the access to information specifically relating to the bank’s labor relation
right to file a petition for certification election. policies. While their duties are highly fiduciary and entails access to
o Unless there is a final order cancelling the union’s registration, it has bank’s confidential data, these data are not related to labor relations, thus
the legal right to represent its members for collective bargaining they cannot be considered as confidential employees prohibited from
purposes. forming, assisting, or joining a union.
o The question of whether or not the union members were managerial o Even Cashier Patricia Maluya, who serves as the secretary of the
or confidential should not be addressed in the proceedings involving bank’s Board of Directors, cannot be considered as a confidential
a PCE but threshed out in other appropriate proceedings. employee. There was not showing that her duties gave her access to
 Their MR being denied, hence the instant petition by SRBI. confidential information specifically relating to SRBI’s labor relation
policies.

RULING: Petition denied.

Whether a certification election may still be conducted notwithstanding
Whether the members of APSOTEU are managerial and confidential the pendency of the petition assailing the union’s registration - YES
employees, therefore prohibited by law from joining labor organizations
and engaging in union activities -- NO.  One of the rights of a legitimate labor organization is to be certified as
the exclusive representative of all employees in an appropriate
 Under the law, a managerial employee is one vested with the powers or bargaining unit for purposes of collective bargaining.
prerogatives to lay down and execute management policies and/or hire,  In this case, since APSOTEU complied will all the requirements to be a
transfer, suspend, lay-off, recall, discharge, assign or discipline legitimate labor organization, then it is within its rights to file a PCE in
employees. Meanwhile, a supervisory employee is the one who order to be recognized as the sole and exclusive bargaining agent. It
effectively recommends managerial actions if the exercise of such continues to enjoy the rights and privileges of a legitimate labor
authority is not merely routinary or clerical in nature but require the use organization until there is a cancellation of its registration. Nothing in the
of independent judgment. law prohibits the conduct of certification election if the management
 In the case at bar, SRBI failed to show that the union members in appeals on the issue of the validity of the union’s registration.
question were vested with the powers of a managerial employee. In fact,
the job description forms hey submitted show that the union members in
question may not transfer, lay-off or discipline any employees or lay Whether there was a violation of the separation of unions doctrine - NO
down and execute management policies.
o The jobs of the union members in question were mostly concerned  Under the separation of unions doctrine, a supervisory union cannot join,
with lending money to clients and borrowers, evaluating their form, or assist labor organization of rank-and-file employees. The law
capacity to pay, approving the loan and its amounts, scheduling the frowns on a union where the membership is composed of both
terms of repayment, and endorsing delinquent accounts to counsel supervisors and rank-and-file employees, for fear that conflicts of interest
for collection. may arise in the areas of discipline, collective bargaining, and strikes.
 Likewise, the union members cannot be considered confidential  In this case, however, none of the embers of APSOTEU came from the
employees. Confidential employees are those who (1) assist or act in a rank-and-file employees of the bank. Moreover, there is no evidence to
confidential capacity, in regard (2) to persons who formulate, determine, support the assertion that ALU, which is representing the rank-and-file
and effectuate management policies in the field of labor relations. The employees, is likewise representing APSOTEU. In fact, it was
confidentiality rule justifies exclusion of confidential employees because APSOTEU, not ALU nor TUCP (with which APSOTEU is affiliated),
in the normal course of their duties they become aware of management which filed the petition for certification election.
policies relating to labor relations.
 o What the records reveal is that APSOTEU was assisted by ALU
during the preliminary stages of its organization. It is not, in any
way, under the ALU.
 Thus, even if ALU and APSOTEU are both affiliated with TUCP, it
cannot be said that APSOTEU was the alter ego of ALU. A local union
maintains its separate personality despite affiliation with a larger
union.

NOTES:

 For those details which are not important but seems important.
 FILIPINO PIPE AND FOUNDRY CORPORATION v. NLRC  On April 8, 1986, petitioner company interposed before the Arbitration
Branch of the then Ministry of Labor and Employment, a petition to
November 16 1999| Purisima,.J| National Union or Federation declare the strike illegal with prayer for damages against FPWU-NLU,
NLU-TUCP and its national president, Atty. EulogioLerum.
SUMMARY:Respondent National Labor Union-Trade Union Congress of  Petitionercompany moved for the partial dismissal of the Complaint
the Philippines (NLU- TUCP), a national federation of labor unions, filed against forty-three (43) officers and members of FPWU-NLU, but
with the then Ministry of Labor and Employment, in behalf of its local maintained the action against the NLU-TUCP and Atty. Eulogio Lerum.
chapter, the Filipino Pipe Workers Union-National Labor Union  LA: Strike was illegal. Ordered NLU-TUCP to pay damages.
(FPWU-NLU, hereinafter referred to as Union), a notice of strike signed by  NLRC: Dismissed the case against NLU-TUCP and Atty. Lerum.
its national president, Atty. Eulogio R. Lerum, against the petitioner, Filipino
Pipe and Foundry Corporation. During the initial conciliation conference, RULING:WHEREFORE, for lack of merit, the Petition is DISMISSED, and
however, a strike was held. Petitioner filed a complaint to declare the strike the Decision of the National Labor Relations Commission in NLRC NCR
illegal and for damages against FPWU-NLU (the union), NLU-TUCP (the CA No. 003806-92 AFFIRMED. No pronouncement as to costs.
federation), and Atty. Lerum (president of federation). The LA said that the
Federation was liable. NLRC said that federation and Atty. Lerum was not SO ORDERED.

liable. The SC agreed that the federation and Atty. Lerumwas not liable
because the federation merely acted as the agent of the union. Whether the liability on account of the illegal strike should be borne by
NLU-TUCP (federation) and Atty. Lerum—NO.
DOCTRINE: The mother federation is a mere agent and the local
chapter/union was the principal, notwithstanding the failure of the local  Petitioner: FPWU-NLU, a local union, cannot act as the principal of
respondent NLU-TUCP, a mother federation, because it is not a
union to comply with the procedural requirements that would make it a
legitimate labor organization
legitimate labor organization.  In Progressive Development Corporation vs. Secretary, Department of
Labor and Employment, the Court explained the nature of the
FACTS: relationship between a mother union/federation and a local union. A
mother union, acting for and in behalf of its affiliate, had the status of an
 Respondent National Labor Union-Trade Union Congress of the agent while the local union remained the basic unit of the association,
Philippines (NLU- TUCP), a national federation of labor unions, filed free to serve the common interest of all its members subject only to the
with the then Ministry of Labor and Employment, in behalf of its local restraints imposed by the constitution and by-laws of the association. The
chapter, the Filipino Pipe Workers Union-National Labor Union same is true even if the local union is not a legitimate labor organization.
(FPWU-NLU, hereinafter referred to as Union), a notice of strike signed In that case, the Court ruled that the mother federation was a mere
by its national president, Atty. Eulogio R. Lerum, against the petitioner, agent and the local chapter/union was the principal, notwithstanding
Filipino Pipe and Foundry Corporation, alleging as grounds therefor the failure of the local union to comply with the procedural
union busting and non-implementation of the Collective Bargaining requirements that would make it a legitimate labor organization.
Agreement.  Whether FPWU, the local chapter, complied with the procedural
 The initial conciliation conference was set to March 3, 1986. requirements that would make it a legitimate labor organization is
 In the early morning of March 3, 1986, however, without waiting for the immaterial. It would not affect its status as the principal and basic unit of
outcome of the conciliation conference scheduled on said date, the the association. The requirement laid down in the Progressive
FPWU-NLU staged the strike in question which lasted until June 13, Development case, that the local union must be a legitimate labor
1986, when a return to work agreement was reached by the union and organization, pertains to the conditions before a union may file a petition
petitioner company. for certification election and to be certified as sole and exclusive
 bargaining agent. In the present case, there is no dispute that o include in the salary of the strikers the P3.00 wage
FPWU-NLU is the sole and exclusive bargaining representative of the increase11 effective March 1, 1986. 

rank and file employees of petitioner company. The union’s status as a o compute their backwages covering the period from
legitimate labor organization is therefore of no moment in the resolution December 1, 1980 to February 28, 1986, including vacation
of the controversy here. As the local union, it is considered as the leave and sick leave. 

principal; the entity which staged the illegal strike and the one  A thorough sifting of the pertinent records discloses that the alleged
responsible for the resulting damages allegedly sustained by union busting was not substantiated and the supposed
petitioner company. non-implementation of the collective bargaining agreement was
 Evidently, direct and primary responsibility for the damages allegedly groundless because the demands of FPWU- NLU, at the time the notice
caused by the illegal strike sued upon fall on the local union FPWU, of strike was filed and at the time the union actually struck, were the
being the principal, and not on reassisted the latter in filing the notice of subject of a pending application for a writ of execution filed by the union
strike. Being just an agent, the notice of strike filed by Atty. in Case No. AB-7933-80 (NCR-CA-8-674-80), which application was
EulogioLerum, the national president of NLU-TUCP, is deemed to granted on April 4, 1986 by the Labor Arbiter.12 Verily, the strike staged
have been filed by its principal, the FPWU-NLU. Having thus by FPWU-NLU was baseless since it was still premature then for the
dismissed the claim for damages against the principal, FPWU-NLU, the union to insist on the implementation of the adverted provision of the
action for damages against its agent, respondent NLU-TUCP, and Atty. collective bargaining agreement, which was the subject of a pending writ
Lerum, has no more leg to stand on and should also be dismissed. of execution.
 Furthermore, the petitioner company is now estopped from reneging on  Then too, the failure of the union to serve petitioner company a copy of
the recognition it extended to the FPWU-NLU as the bargaining the notice of strike is a clear violation of Section 3 of the aforestated
representative of its rank and file workers, by belatedly attacking its Rules. The constitutional precepts of due process mandate that the other
status which petitioner company had voluntarily recognized. It should be party be notified of the adverse action of the opposing party. So also, the
noted that even as early as 1981, when the collective bargaining same Section provides for a mandatory thirty (30) day cooling-offperiod
agreement sought to be implemented by the union was entered into, the which the union ignored when it struck on March 3, 1986, before the
latter was already the bargaining representative of the employees 30th day from the time the notice of strike was filed on February 10,
concerned. It is not, therefore, true that it was respondent NLU-TUCP 1986.
which formed FPWU. At most, the entry into the picture of the private  What is more, the same strike blatantly disregarded the prohibition on the
respondent on March 23, 1983, merely affirmed the status of FPWU as doing of any act which may impede or disrupt the conciliation
the recognized bargaining representative of the rank and file employees proceedings, when the union staged the strike in the early morning of
of petitioner company. March 3, 1986, the very same
 day the conciliation conference was scheduled by the former Ministry of
Labor.
(OTHER ISSUES)  In light of the foregoing, it is beyond cavil that subject strike staged by
the union was illegal.
Whether strike was illegal – YES

 Applying Sections 1, 3, 6 of Rule XXII, Book V, of the Rules

Implementing the Labor Code, the Court is of the finding and conclusion
that the strike staged by FPWU-NLU was illegal for want of any legal
basis.
 Contrary to the grounds advanced by the union in the notice of strike, it
turned out during the March 3, 1986 conciliation conference that the
purpose of the strike was to pressure the petitioner company to:
 HOLY CHILD CATHOLIC SCHOOL v. HON. STO. TOMAS FACTS:

July 23, 2013| Peralta, J.| Supervisor/Rank and File Union Affiliation  May 31, 2002 – Pinag-IsangTinig at LakasngAnakpawis – Holy Child
Catholic School Teachers and Employees Labor Union – PIGLAS
SUMMARY:HCCS-TELU (Union) filed a petition for certification election. (HCCS-TELU/Union, Private respondent), filed a petition for
HCCS opposed, contending that the members of the union do not belong to certification election alleging that PIGLAS is a legitimate labor
the same class and is not only a mixture of managerial, supervisory, and organization duly registered with the DOLE representing the Union.
HCCS is a private educational institution and has approximately 120
rank-and-file employees, but also a combination of teaching and non-
teachers and employees comprising the proposed appropriate bargaining
teaching personnel. The Union argued that DO 9 provided for specific unit. HCCS is unorganized and there is no CBA or a duly certified
instances in which a petition filed by a legitimate organization shall be bargaining agent or a labor organization certified as the SEBA of the
dismissed by the Med-Arbiter and that “mixture of employees” is not one of proposed bargaining unit within 1 year prior to the filing of the petition.
those enumerated. The Med-Arbiter denied the PCE because the unit sought  Among the documents submitted were the certificate of affiliation with
to be represented is inappropriate. The SOLE reversed and ruled that PIGLAS-KristiyanongAlyansangMabayangObrero (PIGLAS-KAMAO)
although there are differences in the nature of work, hours and conditions of issued by the BLR, charter certificate issued by PIGLAS-KAMAO, and
work, etc., these are not substantial enough to warrant the dismissal of the certificate of registration of HCCS-TELU as a legitimate labor
organization issued by the DOLE.
petition. “Inappropriateness of the bargaining unit sought to be represented”
 HCCS (Petitioner) noted that it is a parochial school with the following
is not a ground for dismissal of the petition. Pursuant to the UP case,the employees: 98 teaching personnel, 25 non-teaching academic employees,
SOLE ordered the conduct of two certification elections, one for the teaching 33 non-teaching academic workers (156 in total). Of the employees who
staff and another for the non-teaching staff. CA and SC affirmed. The Court signed to support the petition, 14 already resigned and 6 signed twice.
reviewed the history of the provisions pertaining to the mingling of Members of the union do not belong to the same class and is not only
supervisory and rank-and-file employees.RA 6715 restored the prohibition a mixture of managerial, supervisory, and rank-and-file employees
against the questioned mingling in one labor organization as provided in Sec. (3 VPs, 1 Dept. Head/Supervisor, 11 Coordinators), but also a
combination of teaching and non-teaching personnel (27 are non-
18. Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying teaching personnel). For not being accord with Art. 245 (Ineligibility of
the exact effect any violation of the prohibition would bring about on the Managerial Employees), the Union is an illegitimate labor organization
legitimacy of a labor organization.The invalidity of membership of one of the lacking in personality to file a petition for certification election, citing
organizers does not make the union illegal, where the requirements of the law Toyota Motor Philippines Corp. v. Toyota Motor Philippines Corp.
for the organization thereof are, nevertheless, satisfied and met. Labor Union, and that an inappropriate bargaining unit for want of
community or mutuality of interest as held in DLSU Medical Center and
DOCTRINE:While there is a prohibition against the mingling of College of Medicine v. Laguesma.
supervisory and rank-and-file employees in one labor organization, the Labor  Union: HCCS failed to substantiate its claims. Assuming it were true,
Code does not provide for the effects thereof. After a labor organization has Sec. 11 (II), Rule XI of DO No. 9, Series of 1997, provided for specific
instances in which a petition filed by a legitimate organization shall be
been registered, it may exercise all the rights and privileges of a legitimate
dismissed by the Med-Arbiter and that “mixture of employees” is not one
labor organization. Any mingling between supervisory and rank-and-file of those enumerated. Questions pertaining to qualifications of employees
employees in its membership cannot affect its legitimacy for that is not may be threshed out in the inclusion-exclusion proceedings prior to the
among the grounds for cancellation of its registration, unless such mingling conduct of the certification election pursuant to Sec. 2, Rule XII of said
was brought about by misrepresentation, false statement or fraud under DO. The will of the employees should be respected as they had
Article 239 of the Labor Code. manifested their desire to be represented by only one bargaining unit.
Even if the teachers may receive additional pay for an advisory class and
 for additional loads, HCCS’s academic and non-academic personnel Issuance of a TRO was also filed alleging that Hon. Dacanay of the
have similar working conditions. It cited Laguna College v. CIR and the Industrial Relations Division of the DOLE was set to implement the
case of a union in West negros College in Bacolod City, which allegedly SOLE decision. CA issued TRO. CA denied the manifestation and
represented both academic and non-academic employees. motion for the immediate lifting of the injunction filed by the Union.
 Med-Arbiter: Denied petition for certification election because the unit  CA dismissed the petition and ruled that the Toyota ruling pertaining to
sought to be represented is inappropriate. Vice-Principals, Department Heads, and Coordinators being neither
o Applied the community or mutuality of interest test.The basic test supervisory nor managerial employees is inapplicable. CA agreed that
is whether or not it is fundamentally the combination which will best the nature of the work does not coincide with each other. Nevertheless,
assure to all employees the exercise of their collective bargaining the SOLE did not commit grave abuse of discretion in not dismissing the
rights. The test may result in the formation of an employer unit or in petition for certification election. MR denied.
the fragmentation of an employer unit.
o Here, the employees may be categorized into 2 general classes: 1) the
teaching staff and 2) the non-teaching staff. It would seem obvious RULING:Petition denied.
that the first would find very little in common with the second as
regards responsibilities and function, working conditions, Whether a petition for certification election is dismissible on the ground
compensation rates, social life and interests, sills and intellectual that the labor organization’s membership allegedly consists of
pursuits, etc. There are plain and patent realities which cannot be supervisory and rank-and-file employees –NO.
ignored and dictate the separation of these two categories for
purposes of collective bargaining (citing UP v. Ferrer-Calleja).  HCCS: The duties of the Vice-principals, department heads, and
 SOLE: Reversed. Although there are differences in the nature of work, coordinators include the evaluation and assessment of the effectiveness
hours and conditions of work, etc., these are not substantial enough to and capability of the teachers under them and that such is made without
warrant the dismissal of the petition. “Inappropriateness of the the participation of the Higher Administration (HA) of the school. The
bargaining unit sought to be represented” is not a ground for dismissal of fact that the recommendation undergoes the approval of the HA does not
the petition. In the cited UP case, the SC did not order the dismissal of take away the independent nature of their judgment. It would be difficult
the petition but ordered the conduct of a certification election, limiting for such employees to objectively assess the performances of teachers
same among the non-academic personnel of UP. While the SC ordered a under them if they would be allowed to be members of the same labor
separate bargaining unit for the UP Academic personnel, it did not order union.
them to organize a separate labor organization among themselves.  Union: Sec. 9 and 12 of RA 9481was used to contend that HCCS has no
Currently, the All UP Workers Union continue to exist with a combined standing to oppose the petition for certification election aka the By-
membership of academic and non-academic personnel although separate Stander Rule. An Employer is not a party-in-interest in a certification
bargaining agreements is sought for the two bargaining units. election i.e. does not have the requisite right to protect even by way of
o The SOLE directed the conduct of two certification elections, one for TRO or injunction.
each category, subject to the usual pre-election conferences and  SC: Did not agree with Union. RA 9481 took effect only on June 14,
inclusion-exclusion proceedings, with the following choices: 2007 and is applicable only to labor representation cases filed on or after
 A. Certification Election Among Teaching Personnel:1. Holy said date. The law and rules in force at the time of filing of PCE May
Child Catholic School Teachers and Employees Labor Union; and 2002 are RA 6715 and the Labor Code and the IRR of RA 6715 as
2. No Union amended by DO. No.9.
 B. Certification Election Among Non-TeachingPersonnel: 1. Holy  In Republic v. Kawashima Textile, the Court discussed the applicability
Child Catholic School Teachers and Employees Labor Union; and of the Toyota ruling in the context of RA 6715 and DO 9.
2. No Union. o Nothing in RA 875 (particularly Sec. 3 regarding the segregation of
 MR denied. HCCS filed before the CA a Petition for Certiorari with unions of supervisors and the employees under them) tells of how the
TRO and Preliminary Injunction. A subsequent Motion for Immediate questioned mingling can affect the legitimacy of the labor
 organization. When the issue came before the Court in Lopez v. registered labor organization from exercising its right to file a
Chronicle Publication Employees Association, the Court ruled that petition for certification election.
the absence of any provision on the effect of the disqualification o In Toyota, the Court held: an organization which carries a mixture of
of one of its organizers upon the legality of the union, may be rank-and-file and supervisory employees cannot possess any of the
construed to confine the effect of such ineligibility only upon the rights of a legitimate labor organization, including the right to file a
membership of the supervisors. In other words, the invalidity of petition for certification election for the purpose of collective
membership of one of the organizers does not make the union bargaining. It becomes necessary, therefore, anterior to the granting
illegal, where the requirements of the law for the organization of an order allowing a certification election, to inquire into the
thereof are, nevertheless, satisfied and met. composition of any labor organization whenever the status of the
o The labor Code was enacted without reproducing Sec. 3 of RA 875. labor organization is challenged on the basis of Article 245 of the
Sec. 11 of Rule II merely provides: Members of supervisory unions Labor Code.
who do not fall within the definition of managerial employees shall o In Dunlop,in which the labor organization that filed a petition for
become eligible to join or assist the rank and file organization. In certification election was one for supervisory employees, but in
Bulletin v. Sanchez, the Court ruled that supervisory employees who which the membership included rank-and-file employees, the Court
do not fall under the category of managerial employees may join or reiterated that such labor organization had no legal right to file a
assist in the formation of a labor organization for rank-and-file certification election to represent a bargaining unit composed of
employees, but they may not form their own labor organization. supervisors for as long as it counted rank-and-file employees among
o EO 111 continued to recognize the right of supervisory employees, its members.
who do not fall under the category of managerial employees, to join a o However, the Court emphasized that the rules that applied in the
rank-and-file labor organization. Toyota and Dunlop cases were the 1989 Rules (i.e. not yet
o RA 6715 restored the prohibition against the questioned amended by DO 9).
mingling in one labor organization as provided in Sec. 181. o On June 21, 1997, the Rules was amended by DO 9, specifically the
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted requirement under Sec. 2c: that the petition for certification election
specifying the exact effect any violation of the prohibition would indicate that the bargaining unit of rank-and-file employees has not
bring about on the legitimacy of a labor organization.It was the been mingled with supervisory employees—was removed. Instead,
IRR of RA 6715 which supplied the deficiency by introducing what it requires is a plain description of the bargaining unit.
amendments to Rule II2 and Rule V, Sec 2(c)3.By that provision, any o In the Tagaytaycase, the Court abandoned the view in Toyota and
questioned mingling will prevent an otherwise legitimate and duly 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
1 Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as follows: not provide for the effects thereof.After a labor organization has been
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. registered, it may exercise all the rights and privileges of a legitimate
Supervisory employees shall not be eligible for membership in a labor organization of the labor organization. Any mingling between supervisory and
rank-and-file employees but may join, assist or form separate labor organizations of their own. rank-and-file employees in its membership cannot affect its
2 Sec. 1. Who may join unions.—x xxSupervisory employees and security guards shall not be
legitimacy for that is not among the grounds for cancellation of its
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 registration, unless such mingling was brought about by
supervisory employees who are included in an existing rank-and-file bargaining unit, upon the misrepresentation, false statement or fraud under Article 239 of the
effectivity of Republic Act No. 6715, shall remain in that unit x xx. Labor Code.
3 Sec. 2. Who may file.—Any legitimate labor organization or the employer, when requested to
o In SMC Mandaue, the Court explained that the Rules does not
bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others: require a local or chapter to provide a list of its members and it
Xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances would be improper for the DOLE to deny recognition on account of
otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file any question pertaining to its individual members.
employees shall not include supervisory employees and/or security guards.
 o In Air Philippines Corp. v. BLR, the Court held that that inclusion in  The purpose of a certification election is precisely to ascertain the
a union of disqualified employees isnot among the grounds for majority of the employees’ choice of an appropriate bargaining unit.
cancellation, unless such is due to misrepresentation, false statement  The Court then stressed that as a rule, only questions of law may be
or fraud. raised in a Rule 45 petition.
o Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.
 In the case at bar, since the petition for certification election was filed in CONCURRING OPINION:Brion, J.
2002, DO 9 is applicable. Following the doctrine laid down in
Kawashima and SMCC-Super, petitioner cannot collaterally attack the  Discussed in passing the cited cases in the majority opinion and observed
legitimacy of the Union by prating for the dismissal of the petition. that the law indeed has omitted to include mixed membership as a
Moreover, the determination of whether union membership comprises ground for the cancellation of a labor organization’s registration. He also
managerial and/or supervisory employees is a factual issue that is best reiterated that the legal personality of the union cannot be collaterally
left for resolution in the inclusion-exclusion proceedings, which has not attacked.The SOLE and CA correctly ruled that two collective
yet happened and is still premature to pass upon. bargaining units should represent the teaching and non-teaching
personnel.He also explained Rule 45 guidelines.
 The Labor Code does not specifically define an appropriate bargaining
Whether the petition for certification election should have been unit but provides under Art. 2554 what an exclusive bargaining
dismissed on the ground that the Union is not qualified to file such representative should be.Section 1, Rule I, Book V of the Labor Code’s
petition for its failure to qualify as a legitimate labor organization – NO. Implementing Rules states that a bargaining unit “refers to a group of
employees sharing mutual interests within a given employer unit,
 In case of alleged inclusion of disqualified employees in a union, the comprised of all or less than all of the entire body of employees in the
proper procedure for an employer like petitioner is to directly file a employer unit or any specific occupational or geographical grouping
petition for cancellation of the union’s certificate of registration due to within such employer unit.”
misrepresentation, false statement or fraud under the circumstances  Cited a lot of cases. Bottom-line: Law and jurisprudence provide that the
enumerated in Article 239 of the Labor Code, as amended. To reiterate, commonality or mutuality of interest is the most fundamental standard of
private respondent, having been validly issued a certificate of an appropriate bargaining unit. This standard requires that the employees
registration, should be considered as having acquired juridical in an asserted bargaining unit be similarly situated in their terms and
personality which may not be attacked collaterally. conditions of employment relations. This commonality or mutuality may
 In determining the proper collective bargaining unit and what unit would be appreciated with greatercertainty if their areas of differences with
be appropriate to bethe collective bargaining agency, the Court, in the other groups of employees are considered.
seminal case of Democratic Labor Association v. Cebu Stevedoring  The adage that there is strength in numbers in a single collective
Company, Inc., mentioned several factors that should be considered: (1) bargaining unit is significant when the employees are similarly situated,
will of employees (Globe Doctrine); (2) affinity and unity of employees’ that is, they have the same or similar areas of interests and differences
interest, such as substantial similarity of work and duties, or similarity of from others in their employment relations. However, strength in numbers
compensation and working conditions; (3) prior collective bargaining as a consideration must take a back seat to the ultimate standard of the
history; and (4) employment status, such as temporary, seasonal and
probationary employees. However, the test of the grouping is community 4Art.255.Exclusivebargaining representation and workers’ participation in policy and
or mutuality of interest, because “the basic test of an asserted bargaining
decision-making.— The labor organization designated or selected by the majority of the
unit’s acceptability is whether or not it is fundamentally the combination employees in an appropriate collective bargaining unit shall be the exclusive representative of the
which will best assure to all employees the exercise of their collective employees in such unit for the purpose of collective bargaining. However, an individual employee
bargaining rights.” or group of employees shall have the right at any time to present grievances to their employer.
 employees’ right to self­organization based on commonality or mutuality
of interest; simply put, a collective bargaining unit whose membership is
characterized by diversity of interests cannot fully maximize the exercise
of its collective bargaining rights. The commonality and mutuality of
interest as a determining force of what constitutes a collective bargaining
unit must be understood along these lines, taking into account, of course,
the facts established in a particular case.
 While the 120 employees have similar working condition in some areas,
substantial dissimilarities are also present in their interests, in the work
and duties they performed, and in their working conditions.One obvious
distinction is the nature of the work and duties performed. The teaching
personnel directly implement the school’s curriculum and the school’s
discipline to their students, while the non-teaching personnel perform
administrative, clerical, custodial, and maintenance duties. The teaching
personnel are more concerned with promoting and ensuring a healthy
learning environment for students, while non-teaching personnel are
involved in the management and running of the school.
 The foregoing considerations convinced the SOLE that because of the
dominance of the distinctions (appreciated as questions of facts based on
her labor relations expertise) – the collective bargaining interests of the
employees would be best served if two separate bargaining units would
be recognized, namely, the teaching and the non-teaching unites. Thus,
the SOLE did not commit grave abuse of discretion as the decision was
based on the facts of the case and on the applicable law and
jurisprudence.
 DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE for certification election were managerial employees; and (2) that the
OF MEDICINE (DLSUMCCM), vs. HON. BIENVENIDO E. FFW-DLSUMCCMSUC was composed of both supervisory and rank-
LAGUESMA, Undersecretary of Labor and Employment; ROLANDO and-file employees in the company, in violation of Art. 245 of the LC,
which provides that supervisory employees shall not be eligible for
S. DE LA CRUZ, Med-Arbiter Regional Office No. IV, DE LA SALLE
membership in a labor organization of the rank-and-file employees but
UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE may join, assist or form separate labor organizations of their own
SUPERVISORY UNION-FEDERATION OF FREE WORKERS (FFW- because the FFW had similarly issued a charter certificate to its rank-
DLSUMCCMSUC) and-file employees.
 Med-Arbiter ruling: Petition for certification election is granted because:
August 12, 1998 | Mendoza, J. | Supervisor/Rank-and-File Union Affiliation (1) DLSUMCCM failed to provide the med-arbiter copies of the job
descriptions of the concerned employees, and consequently failed to
SUMMARY: The union of supervisory employees of DLSUMCCM was prove its allegation that some of the signatories to the petition were
granted a charter certificate by FFW, a national federation of labor unions, of managerial employees; and (2) the union of the rank-and-file employees
which the union of rank-and-file employees of DLSUMCCM was also a and the union of the supervisory employees are considered separate
local. DLSUMCCM was contending that unions formed independently by bargaining units and local chapters of FFW. They are, for all intents and
supervisory and rank-and-file employees of a company cannot affiliate with purposes, separate with each other and their affiliation with FFW would
not make them members of the same labor union.
the same national federation. The Court held that the union of supervisory
 DLSUMCCM appealed to the SOLE. Undersecretary Laguesma denied
employees was not precluded from joining the same federation as that of the the appeal, ruling that (1) DLSUMCCM's evidence re: alleged
union of rank-and-file employees absent a showing of two conditions (see managerial status of several employees, was insufficient; and (2) unions
doctrine) as enunciated in Adamson & Adamson, Inc. v. CIR. Because formed independently by supervisory and rank-and-file employees of a
DLSUMCCM failed to prove the existence of the first condition, there was company may legally affiliate with the same national federation.
therefore nothing improper about the union of its supervisory employees and  Subsequently, DLSUMCCM filed a petition for certiorari before the SC,
union of its rank-and-file employees joining the same federation. contending that Undersecretary Laguesma gravely abused his discretion.

DOCTRINE: Unions formed independently by supervisory and rank-and- RULING: Petition is dismissed.
file employees of a company may legally affiliate with the same national
federation, except if: (1) the rank-and-file employees are directly under the
authority of supervisory employees, and (2) the national federation is actively Whether unions formed independently by supervisory and rank-and-file
involved in union activities in the company. employees of a company may validly affiliate with the same national
federation. – GENERALLY, YES. BUT THERE IS AN EXCEPTION
FACTS: TO THIS.
 In 1991, the Federation of Free Workers (FFW), a national federation of  GENERAL RULE: Unions formed independently by supervisory and
labor unions, issued a certificate to FFW-DLSUMCCMSUC, comprised rank-and-file employees of a company may validly affiliate with the
of supervisory employees of DLSUMCCM, recognizing it as a local same national federation. The affiliation of two local unions in a
chapter. The FFW then filed on behalf of FFW-DLSUMCCMSUC a company with the same national federation is not by itself a negation of
petition for certification election. their independence since in relation to the employer, the local unions are
 This petition was opposed by DLSUMCCM on two grounds: (1) several considered as the principals, while the federation is deemed to be merely
employees (e.g., purchasing officers, personnel officers, property their agent.
officers, cashiers, heads of various sections, etc.) who signed the petition
 Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.: The
locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of locals into
the national unionwas in furtherance of the same end. These associations
are consensual entities capable of entering into such legal relations with
their members. The essential purpose was the affiliation of the local
unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association, free to serve
their own and the common interest of all, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement
which brought it to existence.
 EXCEPTION TO THE GENERAL RULE: As held in Adamson &
Adamson, Inc. v. CIR, a local supervisors union should NOT be allowed
to affiliate with a national federation of unions of rank-and-file
employees if: (1) the rank-and-file employees are directly under the
authority of supervisory employees, and (2) the national federation is
actively involved in union activities in the company.
 In the present case, the general rule applies. Although FFW-
DLSUMCCMSUC and another union composed of rank-and-file
employees are indeed affiliated with the same federation, DLSUMCCM
has not presented any evidence showing that the rank-and-file employees
composing the other union are directly under the authority of the
supervisory employees. Also, while FFW's act of filing the petition for
certification election on behalf of FFW-DLSUMCCMSUC shows active
involvement by the FFW in union activities at the company, it is by itself
insufficient to justify a finding of violation of Art. 245 (now 255) since
there is no proof that the supervisors who compose the local union have
direct authority over the rank-and-file employees composing the other
local union which is also affiliated with the FFW.

NOTES:
 ATLAS LITHOGRAPHIC SERVICES, INC. v.USEC.BIENVENIDO supervisory employees for collective bargaining purposes because the
LAGUESMA&KAMPIL-KATIPUNAN private respondent also represents the rank-and-file employees' union.
 Med-Arbiter: ordered the certification election (choices: 1. KAMPIL-
January 6, 1992| Gutierrez, Jr., J. | Supervisor/Rank and File Union KATIPUNAN or 2. No Union).
Affiliation  DOLE: affirmed the MA; petitioner’s MR denied.
RULING:Petition is hereby GRANTED. The private respondent is
SUMMARY:The supervisory, administrative personnel, production, disqualified from affiliating with a national federation of labor organizations
accounting and confidential employees of ALSI affiliated with KAMPIL, a which includes the petitioner's rank-and-file employees.
national labor organization.KAMPIL filed on behalf of the supervisors' union
a petition for certification election. ALSI opposed KAMPIL’s petition Whethera local union of supervisory employees may be allowed to
claiming that under Art. 245 of the Labor Code, KAMPIL cannot represent affiliate with a national federation of labor organizations of rank-and-
the supervisory employees for collective bargaining purposes because it also file employees– NO.
represents the rank-and-file employees' union. The Court held that a local
 Petitioner:KAMPIL-KATIPUNAN already represents its rank-and-file
union of supervisory employees is not allowed to affiliate with a national employees. To allow the supervisors of those employees to affiliate with
federation of labor organizations of rank-and-file employees. the private respondent is tantamount to allowing the circumvention of the
principle of the separation of unions under Art. 245. The intent of the law
DOCTRINE:Supervisors are not prohibited from forming their own union. is to prevent a single labor organization from representing different
What the law prohibits is their membership in a labor organization of classes of employees with conflicting interests.
rank-and-file employees or their joining a national federation of rankand-file  Public respondent: despite affiliation with a national federation, the local
employees that includes the very local union which they are not allowed to union does not lose its personality which is separate, and distinct from
directly join. the national federation. RA 67156 contemplates the principle laid down
by this Court in Adamson & Adamson, Inc. v. CIR interpreting Section 3
FACTS: of RA 875 (the Industrial Peace Act) on the right of a supervisor's union
to affiliate. The private respondent asserts that the legislature must have
 The supervisory, administrative personnel, production, accounting and noted the Adamson ruling then prevailing when it conceived the
confidential employees of petitioner Atlas Lithographic Services, Inc. reinstatement in the present Labor Code of a similar provision on the
(ALSI) affiliated with private respondent KaisahanngManggagawang right of supervisors to organize.
Pilipino (KAMPIL), a national labor organization.
 The local union adopted the name Atlas Lithographic Services, Inc. Discussion of the changes in the law:
Supervisory, Administrative, Personnel Production, Accounting and
Confidential Employees Association or ALSI-SAPPACEA-KAMPIL of the rank-and-file employees but may join, assist or form separate labor organizations of their
(supervisors' union). own. (Now Art. 255. But take note that it now includes the last line which states: “The rank-and-
file union and the supervisors’ union operating within the same establishment may join the same
 Private respondent KAMPIL-KATIPUNAN filed on behalf of the federation or national union.”)
supervisors' union a petition for certification election so that it could be 6An Act To Extend Protection To Labor, Strengthen The Constitutional Rights Of Workers To

the sole and exclusive bargaining agent of the supervisory employees. Self-Organization, Collective Bargaining And Peaceful Concerted Activities, Foster Industrial
 Petitioners opposed private respondent's petition claiming that under Art. Peace And Harmony, Promote The Preferential Use Of Voluntary Modes Of Settling Labor
2455 of the Labor Code the private respondent cannot represent the Disputes, And Reorganize The National Labor Relations Commission, Amending For These
Purposes Certain Provisions Of Presidential Decree No. 442, As Amended, Otherwise Known As
5Art. 245. Ineligibility of managerial employees to join any labor organization; right of The Labor Code Of The Philippines, Appropriating Funds Therefore And For Other Purposes
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
 RA 875: employees were classified into three groups: (1) managerial  The peculiar role of supervisors is such that while they are not managers,
employees; (2) supervisors; and (3) rank-and-file employees. when they recommend action implementing management policy or ask
Supervisors, who were considered employees in relation to their for the discipline or dismissal of subordinates, they identify with the
employer could join a union but not a union of rank-and-file employees. interests of the employer and may act contrary to the interests of the
 1974Labor Code (PD 442): employees were classified into managerial rank-and-file. A conflict of interest may arise in the areas of discipline,
and rankand-file employees. Neither the category of supervisors nor their collective bargaining and strikes. Members of the supervisory union
right to organize under the old statute were recognized. In Bulletin might refuse to carry out disciplinary measures against their co-member
Publishing Corporation vs. Sanchez, the Court interpreted the rank-and-file employees.
superseding labor law to have removed from supervisors the right to  In the area of bargaining, their interests cannot be considered identical.
unionize among themselves. “xxx supervisory employees of petitioner The needs of one are different from those of the other. In the event of a
firm may not, under the law, form a supervisors union, separate and strike, the national federation might influence the supervisors' union to
distinct from the existing bargaining unit, composed of the rank-and-file conduct a sympathy strike on the sole basis of affiliation.
employees of the Bulletin Publishing Corporation. It is evident that most  The factual issues in the Adamson case are different from the present
of the private respondents are considered managerial employees. Also, it case. First, the rank-and-file employees in the Adamson case are not
is distinctly stated in Sec. 11, Rule II, of the Omnibus Rules directly under the supervisors who comprise the supervisors' union. In
Implementing the Labor Code, that supervisory unions are presently no the case at bar, the rank-and-file employees are directly under the
longer recognized nor allowed to exist and operate as such." supervisors organized by one and the same federation.
 Sec. 11, Rule II, Book V of the Omnibus Rules implementing PD 442:  The contemplation of the law in Sec. 3 of RA 875 is to prohibit
the supervisory unions existing since the effectivity of the New Code in supervisors from joining a labor organization of employees under their
January 1, 1975 ceased to operate as such and the members who did not supervision. Sec. 3 of the Industrial Peace Act provides: "Sec. 3—
qualify as managerial employees under this definition in Article 212 (k) Employees' Right to Self-Organization. Employees shall have the right to
therein became eligible to form, to join or assist a rank-and-file union. self-organization and to form, join or assist labor organizations of their
 RA 6715: employees were reclassified into three groups, namely: (1) the own choosing for the purpose of collective bargaining through
managerial employees; (2) supervisors; and (3) the rank-and-file representatives of their own choosing and to engage in concerted
employees. Under the present law, the category of supervisory activities for the purpose of collective bargaining and other mutual aid or
employees is once again recognized. Hence, Art. 212(m) states: "(m) x protection. Individuals employed as supervisors shall not be eligible for
xx Supervisory employees are those who, in the interest of the employer, membership in a labor organization of employees under their
effectively recommend such managerial actions if the exercise of such supervision but may form separate organizations of their own.”
authority is not merely routinary or clerical in nature but requires the use  This was not the consideration in the Adamson case because as
of independent judgment. xxx.” mentioned earlier, the rank-and-file employees in the Adamson case were
*** not under the supervision of the supervisors involved.
 Court: The rationale for the amendment is the government's recognition  The Court construes Art. 245 to mean that, as in Sec. 3 of the Industrial
of the right of supervisors to organize with the qualification that they Peace Act, supervisors shall not be given an occasion to bargain together
shall not join or assist in the organization of rank-and-file employees. with the rank-and-file against the interests of the employer regarding
The interests of supervisors and the rank-and-file employees are separate terms and conditions of work.
and distinct. The functions of supervisors, being recommendatory in  Second, the national union in the Adamson case did not actively
nature, are more identified with the interests of the employer. The represent its local chapters. In the present case, the local union is actively
performance of those functions may run counter to the interests of the represented by the national federation. If the intent of the law is to avoid
rank-and-file. a situation where supervisors would merge with the rank-and-file or
 Senate Journal: while supervisors are considered as rank-and-file where the supervisors' labor organization would represent conflicting
employees, they cannot join the union and they would have to form their interests, then a local supervisors' union should not be allowed to affiliate
own supervisors' union pursuant to Rep. Act 875.
 with the national federation of union of rank-and-file employees where
that federation actively participates in union activity in the company.
 Petitioner further contends that the term labor organization includes a
federation considering that Art. 212 (g) mentions 'any union or
association of employees.' Respondent, however, argues that the phrase
refers to a local union only in which case, the prohibition in Art. 245 is
inapplicable to the case at bar.
 The limitation is not confined to a case of supervisors wanting to join a
rank-and-file local union. The prohibition extends to a supervisors' local
union applying for membership in a national federation the members of
which include local unions of rank-and-file employees.
 Finally, respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization. No violation of
such a guarantee to the employee. Supervisors are not prohibited from
forming their own union. What the law prohibits is their membership in a
labor organization of rank-and-file employees or their joining a national
federation of rankand-file employees that includes the very local union
which they are not allowed to directly join.

NOTES:

In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents' pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a
collective bargaining agreement. Petitioner expressed a loss of interest in
pursuing this action. Petitioner is, of course, free to grant whatever
concessions it wishes to give to its employees unilaterally or through
negotiations but we cannot allow the resulting validation of an erroneous
ruling and policy of the Department of Labor and Employment (DOLE) to
remain on the basis of the petitioner's loss of interest. The December 14,1990
order and the November 21,1990 resolution of DOLE are contrary to law and
must be declared as such.
 Philippine Skylanders, Inc. v. NLRC  In November 1993, the Philippine Skylanders Employees Association
(PSEA), a local labor union affiliated with the Philippine Association of
January 31, 2002| Bellosillo, J. | Union Chartering/ Affiliation—Nature and Free Labor Unions (PAFLU), won in the certification election conducted
Purpose among the rank-and-file employees of Philippine Skylanders, Inc. (PSI). Its
rival union Philippine Skylanders Employees Association- WATU (PSEA-
SUMMARY:Philippine Skylanders Employees Association (PSEA), a local WATU) immediately protested the result of the election before the
labor union affiliated with the Philippine Association of Free Labor Unions Secretary of Labor.
(PAFLU), won in the certification election conducted in Philippine  Several months later, pending the settlement of the controversy, PSEA sent
PAFLU a notice of disaffiliation citing as reason PAFLU’s supposed
Skylanders. Its rival local labor union immediately protested the results of
deliberate and habitual dereliction of duty towards its members. Attached to
the election. During the pendency of the complaint, PSEA sent PAFLU a the notice was a copy of the resolution adopted and signed by the officers
notice of disaffiliation. PSEA subsequently affiliated itself with National and members of PSEA authorizing their local union to disaffiliate from its
Congress of Workers. SC held that the disaffiliation of PSEA from PAFLU is mother federation.
valid.  PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association
DOCTRINE: The right of a local union to disaffiliate from its mother (PSEA-NCW), and to maintain continuity within the organization, allowed
federation is not a novel thesis. In the landmark case of Liberty Cotton Mills the former officers of PSEA-PAFLU to continue occupying their positions
Workers Union v. Liberty Cotton Mills, Inc., we upheld the right of local as elected officers in the newly forged PSEA-NCW.
unions to separate from their mother federation on the ground that as separate  PSEA-NCW entered into a CBA with PSI which was immediately
registered with the DOLE.
and voluntary associations, local unions do not owe their creation and
 Meanwhile, apparently oblivious to PSEA’s shift of allegiance, PAFLU
existence to the national federation to which they are affiliated but instead, to Sec. Gen. Serafin Ayroso wrote Mariles Romulo requesting a copy of PSI’s
the will of their members. The sole essence of affiliation is to increase, by audited financial statement.
collective action, the common bargaining power of local unions for the  PSI through its personnel manager Francisco Dakila denied the request
effective enhancement and protection of their interests. Admittedly, there are citing as reason PSEA’s disaffiliation from PAFLU and its subsequent
times when without succor and support local unions may find it hard, affiliation with NCW.
unaided by other support groups, to secure justice for themselves.  PAFLU through Serafin Ayroso filed a complaint for ULP against PSI
 PSI’s refusal to bargain collectively
Policy considerations dictate that in weighing the claims of a local union as  PSI was interfering with its employees’ union activities
against those of a national federation, those of the former must be preferred.  Two days later, Ayroso also filed another complaint in behalf of PAFLU
Parenthetically though, the desired of the mother federation to protect its for ULP against Francisco Dakila
locals are not altogether to be shunned. It will however be to err greatly  Dakila was present in PSEA’s organizational meeting thereby
confirming his illicit participation in union activities
against the Constitution if the desired of the federation would be favored
 Members of the local union had unwittingly fallen into the
over those of its members. That, at any rate, is the policy of the law. For it manipulative machinations of PSI and were lured into endorsing
were otherwise, instead of protection, there would be disregard and neglect a collective bargaining agreement which was detrimental to their
of the lowly working men. interests.
 PSI moved for dismissal of the complaint on the ground that the issue of
FACTS: disaffiliation was an inter-union conflict which lay beyond the jurisdiction
of the Labor Arbiter.
 PSEA-NCW, on the other hand, argues that since PSEA was no longer disaffiliate from the federation nor were there any conditions imposed
affiliated with PAFLU, Ayroso or PAFLU had no legal personality to file for a valid breakaway. As such, the pendency of an election protest
the instant complaint. In support of this asseration, PSEA-NCW submitted involving both the mother federation and the local union did not
in evidence a Katunayan signed by 111 of 120 rank and file employees of constitute a bar to a valid disaffiliation.
PSI disauthorizing Ayroso or PAFLU from instituting any action in their  Neither was it disputed by PAFLUthat 111 signatories out of 120
behalf. members of the local union, or an equivalent of 92.5% of the total union
 LA: PSEA’s disaffiliation from PAFLU was invalid and the officers of the membership supported the claim of disaffiliation and had in fact
former are guilty of ULP disauthorized PAFLU from instituting any complaint on their behalf.
 NLRC upheld the decision of the Labor Arbiter and conjectured that since  The mere act of disaffiliation did not divest PSEA of its own personality;
an election protest questioning PSEA-PAFLU’s certification as the SEBA neither did it give PAFLU the license to act independently of the local
was pending resolution before the Secretary of Labor, PSEA could not union. Recreant to its mission, PAFLU cannot simply ignore the
validly separate from PAFLU, join another national federation and demands of the local chapter and decide for its welfare. PAFLU might
subsequently enter into a CBA with its employer-company. have forgotten that as an agent it could only act in representation of and
in accordance with the interests of the local union. The complaint then
for unfair labor practice lodged by PAFLU against PSI, PSEA and their
RULING: respective officers, having been filed by a party which has no legal
personality to institute the complaint, should have been dismissed at the
Whether or not PSEA, an independent and separate local union, may first instance for failure to state a cause of action.
validly disaffiliate from PAFLU pending the settlement of an election  Policy considerations dictate that in weighing the claims of a local union
protest questioning its status as the sole and exclusive bargaining agent as against those of a national federation, those of the former must be
of PSI’s rank and file employee —YES preferred. Parenthetically though, the desired of the mother federation to
protect its locals are not altogether to be shunned. It will however be to
 The right of a local union to disaffiliate from its mother federation is not err greatly against the Constitution if the desired of the federation would
a novel thesis. In the landmark case of Liberty Cotton Mills Workers be favored over those of its members. That, at any rate, is the policy of
Union v. Liberty Cotton Mills, Inc., we upheld the right of local unions to the law. For it were otherwise, instead of protection, there would be
separate from their mother federation on the ground that as separate and disregard and neglect of the lowly working men.
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.
NOTES:
Admittedly, there are times when without succor and support local
unions may find it hard, unaided by other support groups, to secure
 Let it be noted that the issue of disaffiliation is an inter-union conflict the
justice for themselves.
jurisdiction of which properly lies with the BLR and not with the LA.
 Yet the local unions remain the basic unit of association, free to serve Nonetheless, with due recognition of this fact, the Court deems it proper
their own interests subject to the restraints imposed by the constitution to settle the controversy at this instance since to remand the case to the
and by-laws of the national federation, and free also to renounce the BLR would only mean intolerable delay for the parties.
affiliation upon the terms laid down in the agreement which brought
such affiliation into existence.
 As applied in the case at bar, there is nothing shown in the records nor is
it claimed by PAFLU that the local union was expressly forbidden to
 MALAYANG SAMAHAN NG MGA MANGGAGAWA NG officers with the DOLE NCR but this was dismissed by the Med-Arbiter
GREENFIELD V RAMOS for failure to substantiate allegations.
 On April 17, 1988, the local union held a general membership meeting at
February28, 2000 | Purisima, J. | Labor Union/Mass Disaffiliation: Nature of the Caruncho Complex in Pasig. Several union members failed to attend
Right and Legality the meeting, prompting the Executive Board to create a committee tasked
to investigate the non-attendance of several union members in the said
SUMMARY:Local union officer were expelled from Union by the assembly, pursuant to Sections 4 and 5, Article V of the Constitution and
Federation for committing acts of disloyalty. LA, to support finding of By-Laws of the union. The local union wrote respondent company a
letter requesting it to deduct the union fines (worth 50 pesos) from the
disloyalty, used as basis the act of petitioners in disaffiliating and setting up a
wages/salaries of those union members who failed to attend the general
new federation. The Court pointed out that this was a normal retaliatory membership meeting. the Secretary General of the national federation,
action considering that this happened AFTER they were expelled from the GodofredoPaceño, Jr. disapproved the resolution of the local union
Union. Besides, said act of disaffiliation cannot be considered an act of imposing the P50.00 fine. The union officers protested such action by the
disloyalty which may cause their expulsion because this was not prohibited Federation in a Reply dated July 4, 1988.
according to their Constitution and By-Laws. In the absence of specific  On July 11, 1988, the Federation wrote respondent company a letter
provisions in the federation's constitution prohibiting disaffiliation or the advising the latter not to deduct the fifty-peso fine from the salaries of
the union members stating that when the local union issues resolutions
declaration of autonomy of a local union, a local may dissociate with its
affecting a number of members, these must first be cleared with the
parent union. federation. The Company then sent a letter to local union stating that it
cannot deduct 50 pesos from the wages and said that the union should
DOCTRINE: A local union has the right to disaffiliate from its mother refer the matter to the proper government office for resolution in order to
union or declare its autonomy. A local union, being a separate and voluntary avoid placing the company in the middle of the issue.
association, is free to serve the interests of all its members including the  The imposition of P50.00 fine became the subject of bitter disagreement
freedom to disaffiliate or declare its autonomy from the federation to which it between the Federation and the local union culminating in the latter's
belongs when circumstances warrant, in accordance with the constitutional declaration of general autonomy from the former through Resolution No.
guarantee of freedom of association. 10 passed by the local executive board and ratified by the general
membership on July 16, 1988.In retaliation, the national federation asked
FACTS: respondent company to stop the remittance of the local union's share in
the education funds effective August 1988. This was objected to by the
 The petitioner, MalayangSamahanngmgaManggagawasa M. Greenfield, local union which demanded that the education fund be remitted to it in
Inc., (B) (MSMG), hereinafter referred to as the "local union", is an full.
affiliate of the private respondent, United Lumber and General Workers  The company was thus constrained to file a Complaint for Interpleader
of the Philippines (ULGWP), referred to as the "federation". with a Petition for Declaratory Relief with the Med-Arbitration Branch
 On September 12, 1986, a local union election was held under the of the Department of Labor and Employment. The Med-Arbiter ruled in
auspices of the ULGWP wherein the herein petitioner, Beda Magdalena favor of the local union stating that (1) employees shall be represented by
Villanueva, and the other union officers were proclaimed as winners. the local union, (2) education fund should be given in full and used for
Months later, a petition for impeachment was filed with the federation by said purpose and, (3) treasurer of local union shall collect 50 pesos
the losing candidates. The federation conducted an audit of the local penalty.
union funds. The investigation did not yield any unfavorable result and  Director however modified the decision stating that 5,000 pesos of
the local union officers were cleared of the charges of anomaly in the education fund should be given to Federation while the other half shall
custody, handling and disposition of the union funds. The 14 defeated be given to local union.
candidates filed a Petition for Impeachment/Expulsion of the local union
 Several unions filed a petition for auditing and examination of the election and filed a petition for the registration of UWP as a national
education funds of the Federation which was granted by the Med- federation.
Arbiter. Subsequently, the officials of Federation called a Special  On March 8, 1989, the petitioners filed a Notice of Strike with the
National Executive Board Meeting at Nasipit, Agusandel Norte where a NCMB, DOLE, Manila. The grounds were: a) Discrimination, (b)
Resolution was passed placing the local union under trusteeship and Interference in union activities, (c) Mass dismissal of union officers and
appointing respondent Cesar Clarete as administrator.Claretewrote the shop stewards, (d) Threats, coercion and intimidation and (e) Union
respondent company informing the latter of its designation of a certain busting. A strike vote referendum was conducted and out of 2, 103 union
Alfredo Kalingking as local union president and "disauthorizing" the members who cast their votes, 2,086 members voted to declare a strike.
incumbent union officers from representing the employees. This action  The 30 dismissed union officers filed an urgent motion before the SOLE
by the national federation was protested by the petitioners in a letter to to suspend the effects of their termination. However, SOLE Drilon
respondent company dated November 11, 1988. The petitioner union dismissed this saying that it was a purely intra-union dispute.
officers received identical letters from the administrator requiring them  On March 13 and 14, 1989, a total of 78 union shop stewards were
to explain within 72 hours why they should not be removed from their placed under preventive suspension by respondent company. This
office and expelled from union membership. prompted the union members to again stage a walk-out and resulted in
 Petitioners’ reply contained the following statements: (a) Questioning the the official declaration of strike at around 3:30 in the afternoon of March
validity of the alleged National Executive Board Resolution placing their 14, 1989. The strike was attended with violence, force and intimidation
union under trusteeship; (b) Justifying the action of their union in on both sides resulting to physical injuries to several employees, both
declaring a general autonomy from ULGWP due to the latter's inability striking and non-striking, and damage to company properties.The
to give proper educational, organizational and legal services to its employees who participated in the strike and allegedly figured in the
affiliates and the pendency of the audit of the federation funds; (c) violent incident were placed under preventive suspension by respondent
Advising that their union did not commit any act of disloyalty as it has company. The company also sent return-to-work notices to the home
remained an affiliate of ULGWP;(d) Giving ULGWP a period of five (5) addresses of the striking employees thrice successively, on March 27,
days to cease and desist from further committing acts of coercion, April 8 and April 31, 1989, respectively. However, respondent company
intimidation and harassment. admitted that only 261 employees were eventually accepted back to
 However, the 30 officers were expelled by Federation from the Local work. Those who did not respond to the return-to-work notice were sent
Union (for committing acts of disloyalty and/or acts inimical to the termination letters dated May 17, 1989.
interest of ULGWP and violative to its Constitution and By-laws  Petitioners then filed a verified complaint with the Arbitration Branch
particularly Article V, Section 6, 9, and 12, Article XIII, Section 8) and charging private respondents of unfair labor practice which consists of
the Federation wrote to the respondent company to terminate them union busting, illegal dismissal, illegal suspension, interference in union
pursuant to union security clause. The federation filed a notice of strike activities, discrimination, threats, intimidation, coercion, violence, and
so under threat of strike, company was forced to terminate said 30 oppression. But after the filing of the complaint, the lease contracts on
employees. On that same day, the expelled union officers assigned in the the respondent company's office and factory at Merville Subdivision,
first shift were physically or bodily brought out of the company premises Parañaque expired and were not renewed. Upon demand of the owners of
by the company's security guards. Likewise, those assigned to the second the premises, the company was compelled to vacate its office and
shift were not allowed to report for work. This provoked some of the factory. For failure to find a suitable place in Manila, company was
members of the local union to demonstrate their protest for the dismissal constrained to transfer to Tacloban and it issued an announcement to
of the said union officers. Some union members left their work posts and employees who still wished to continue employment in Tacloban to
walked out of the company premises. The Federation, on the other hand, enlist before a certain date.
withdrew their notice of strike.  LA dismissed the complaint because termination was according to union
 On February 26, 1989, the petitioners declared as vacant all the security clause and petitioner union officers were justifiably expelled
responsible positions of ULGWP, filled these vacancies through an from the federation for committing acts of disloyalty when it "undertook
to disaffiliate from the federation by charging ULGWP with failure to
 provide any legal, educational or organizational support to the local. . . . administrative investigation; that the federation cannot recommend the
and declared autonomy, wherein they prohibit the federation from dismissal of the union officers because it was not a principal party to the
interfering in any internal and external affairs of the local union." collective bargaining agreement between the company and the union; that
 NLRC affirmed LA decision stating that if petitioners had any recourse public respondents acted with grave abuse of discretion when they declared
in law, it would be against the federation and not the company.
petitioners' dismissals as valid and the union strike as illegal and in not
 This is a petition for certiorari.
declaring that respondents were guilty of unfair labor practice.

RULING:WHEREFORE, the Petition is GRANTED; the decision of the Private respondents: the thirty dismissed employees who were former
National Labor Relations Commission in Case No. NCR-00-09-04199-89 is officers of the federation have no cause of action against the company, the
REVERSED and SET ASIDE; and the respondent company is hereby termination of their employment having been made upon the demand of the
ordered to immediately reinstate the petitioners to their respective positions. federation pursuant to the union security clause of the CBA; the expelled
Should reinstatement be not feasible, respondent company shall pay officers of the local union were accorded due process of law prior to their
separation pay of one month salary for every year of service. Since expulsion from their federation; that the strike conducted by the petitioners
petitioners were terminated without the requisite written notice at least 30 was illegal for noncompliance with the requirements; that the employees who
days prior to their termination, following the recent ruling in the case participated in the illegal strike and in the commission of violence thereof
ofRuben Serrano vs. National Labor Relations Commission and Isetann were validly terminated from work; they were deemed to have abandoned
Department Store, the respondent company is hereby ordered to pay full their employment when they did not respond to the three return to work
backwages to petitioner-employees while the Federation is also ordered to notices sent to them; that petitioner has no legal personality to file and
pay full backwages to petitioner-union officers who were dismissed upon its prosecute the case for and on behalf of the individual employees as the right
instigation. Since the dismissal of petitioners was without cause, backwages to do so is personal to the latter; and that, the officers of respondent company
shall be computed from the time the herein petitioner employees and union cannot be liable because as mere corporate officers, they acted within the
officers were dismissed until their actual reinstatement. Should reinstatement scope of their authority.
be not feasible, their backwages shall be computed from the time petitioners LA and NLRC: Notwithstanding the lack of a prior administrative
were terminated until the finality of this decision.Costs against the investigation by respondent company, under the union security clause
respondent company. provision in the CBA, the company cannot look into the legality or illegality
of the recommendation to dismiss by the union and the obligation to dismiss
is ministerial on the part of the company.
Whether or not respondent company was justified in dismissing
petitioner employees merely upon the labor federation's demand for the  NLRC is wrong because notwithstanding the union security clause, this
does not erode the necessity of due process. Sanctity and inviolability of
enforcement of the union security clause embodied in their collective
contracts cannot prevail over right to due process.
bargaining agreement – YES BUT NO DUE PROCESS so still illegal  Carino v NLRC: While the company, under a maintenance of
membership provision of the collective bargaining agreement, is bound
Petitioners: Their dismissal from work was effected in an arbitrary, hasty,
to dismiss any employee expelled by the union for disloyalty upon its
capricious and illegal manner because it was undertaken by the respondent written request, this undertaking should not be done hastily and
company without any prior administrative investigation; that, had respondent summarily. The company acts in bad faith in dismissing a worker
company conducted prior independent investigation it would have found that without giving him the benefit of a hearing.
their expulsion from the union was unlawful similarly for lack of prior
 Relying merely upon the federation's allegations, respondent company  A local union has the right to disaffiliate from its mother union or declare
terminated petitioners from employment when a separate inquiry could its autonomy. A local union, being a separate and voluntary association,
have revealed if the federation had acted arbitrarily and capriciously in is free to serve the interests of all its members including the freedom to
expelling the union officers. Respondent company's allegation that disaffiliate or declare its autonomy from the federation to which it
petitioners were accorded due process is belied by the termination letters belongs when circumstances warrant, in accordance with the
received by the petitioners which state that the dismissal shall be constitutional guarantee of freedom of association.
immediately effective.  Purpose of affiliation with a mother union or a federation: to increase by
 Public respondent also erred in stating that the right of action of collective action the bargaining power in respect of the terms and
employees is against the federation and not the company. While it is true conditions of labor. Yet the locals remained the basic units of
that the issue of expulsion of the local union officers is originally association, free to serve their own and the common interest of all,
between the local union and the federation, hence, intra-union in subject to the restraints imposed by the Constitution and By-Laws of the
character, the issue was later on converted into a termination dispute Association, and free also to renounce the affiliation for mutual welfare
when the company dismissed the petitioners from work without the upon the terms laid down in the agreement which brought it into
benefit of a separate notice and hearing. As a matter of fact, the records existence.
reveal that the termination was effective on the same day that the  Thus, a local union which has affiliated itself with a federation is free to
termination notice was served on the petitioners. sever such affiliation anytime and such disaffiliation cannot be
 Notwithstanding the fact that the dismissal was at the instance of the considered disloyalty. In the absence of specific provisions in the
federation and that it undertook to hold the company free from any federation's constitution prohibiting disaffiliation or the declaration of
liability resulting from such a dismissal, the company may still be held autonomy of a local union, a local may dissociate with its parent union.
liable if it was remiss in its duty to accord the would-be dismissed Evidence does not show that there is such a provision. The reliance of
employees their right to be heard on the matter. Federation on the provision declaring autonomy of local union is
misplaced because it actually bolsters what the union is exercising: right
to disaffiliate. Thus, there is no disloyalty to speak of. There cannot be
Whether petitioners are right that federation is NOT a party to the CBA any valid dismissal because Article II, Section 4 of the union security
– NO clause in the CBA limits the dismissal to only three (3) grounds, to wit:
failure to maintain membership in the union (1) for non-payment of
 Med-Arbiter had already ruled that: MSMG (Local union) was not yet union dues, (2) for resignation; and (3) for violation of the union's
registered labor organization at the time of the signing of the CBA. Constitution and By-Laws.
Hence, the union referred to in the CBA is the ULGWP (Federation).  The act of establishing a different federation, which LA used as support
for ‘disloyalty’, entirely separate from the federation which expelled
them, is but a normal retaliatory reaction to their expulsion.
Whether the federation had reasonable grounds to expel the petitioner  The strike was legal. The presumption of legality prevails because the
union officers – NO  IMPORTANT ISSUE ground was unfair labor practices considering that petitioners believed in
good faith that dismissal was illegal.
 This is within the BLR’s jurisdiction since this is an intra-union conflict  Federation officers and company officers are not declared liable because
but the Court decided on it because remanding it to the BLR will cause the union security clause is valid. However, dismissal is still illegal for
delay. violation of due process.
 In its decision, the Labor Arbiter declared that the act of disaffiliation
and declaration of autonomy by the local union was part of its "plan to
take over the respondent federation." This is purely conjecture and NOTES:
speculation on the part of public respondent, totally unsupported by the
evidence.  Article II of the CBA (Union Security Clause)
Sec. 4. Dismissal.Any such employee mentioned in Section 2 hereof, who
fails to maintain his membership in the UNION for non-payment of UNION
dues, for resignation and for violation of UNION's Constitution and By-Laws
and any new employee as defined in Section 2 of this Article shall upon
written notice of such failure to join or to maintain membership in the
UNION and upon written recommendation to the COMPANY by the
UNION, be dismissed from the employment by the
COMPANY; provided, however, that the UNION shall hold the COMPANY
free and blameless from any and all liabilities that may arise should the
dismissed employee question, in any manner, his dismissal; provided,
further that the matter of the employee's dismissal under this Article may be
submitted as a grievance under Article XIII and, provided, finally, that no
such written recommendation shall be made upon the COMPANY nor shall
COMPANY be compelled to act upon any such recommendation within the
period of sixty (60) days prior to the expiry date of this Agreement
conformably to law.

 Article IX
Sec. 4. Program Fund — The Company shall provide the amount of
P10,000.00 a month for a continuing labor education program which shall be
remitted to the Federation . . .
 NATIONAL UNION OF BANK EMPLOYEES v. PHILNABANK  Later, NUBE-PEC was certified as the sole and exclusive bargaining
EMPLOYEES ASSOCIATION and PHILIPPINE NATIONAL BANK agent of the PNB rank-and-file employees. A CBA was signed between
NUBE-PEC and PNB which provided that:
August 12, 2013 | Peralta, J. | Local Union Disaffiliation/Mass Disaffiliation o PNB shall deduct the monthly membership fee and other assessments
imposed by the union from the salary of each union member, and
SUMMARY:PNB used to be government-owned. When it became a private agency fee (equivalent to the monthly membership dues) from the
corporation, PEMA (a public sector union representing PNBs rank-and-file salary of the R&F Employees within the bargaining unit who are not
employees) affiliated with NUBE, changing its name to NUBE-PEC. NUBE- union members.
o Moreover, during the effectivity of the CBA, NUBE, being the
PEC was certified as the SEBA of the PNB rank-and-file employees.
Federation union, agreed that PNB shall remit P15.00 of the P65.00
However, since the majority of the union members of NUBE-PEC was not union dues per month collected by PNB from every employee, and
satisfied anymore with the poor services of NUBE, the NUBE-PEC officers that PNB shall directly credit the amount to NUBE’s current account
decided to adopt a Resolution disaffiliating itself from NUBE. NUBE with PNB.
assailed the validity of the disaffiliation of NUBE-PEC. The Court upheld its  Following the expiration of the CBA, PEMA-FFW filed a PCE among
validity saying that… the R&F Employees of PNB to be participated in by PEMA-FFW and
NUBE-PEC
DOCTRINE: A local union may disaffiliate at any time from its mother  While the PCE was still pending, 2 significant events transpired – the
federation, absent any showing that the same is prohibited under its independent union registration of NUBE-PEC and its disaffiliation with
constitution or rule. Such, however, does not result in it losing its legal NUBE.
 With a legal personality derived only from a charter issued by NUBE,
personality altogether. A local labor union is a separate and distinct unit
NUBE-PEC decided to apply for a separate registration with the DOLE.
primarily designed to secure and maintain an equality of bargaining power It was registered as an independent labor organization
between the employer and their employee-members. A local union does not  Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution
owe its existence to the federation with which it is affiliated. It is a separate disaffiliating itself from NUBE for the following reasons:
and distinct voluntary association owing its creation to the will of its o NUBE has miserably failed to extend and provide satisfactory
members. The mere act of affiliation does not divest the local union of its services and support in the form of legal services, training assistance,
own personality, neither does it give the mother federation the license to act educational seminars, and the like
o this failure to provide adequate essential services and support to
independently of the local union. It only gives rise to a contract of agency
union members have caused the latter to be resentful to NUBE and to
where the former acts in representation of the latter. demand for the Union’s disaffiliation from the former
o NUBE displayed its lack of regard for the interests and aspirations of
FACTS: the union members by blocking the latter’s desire for the early
commencement of CBA negotiations with the PNB management
 PNB used to be a government-owned and controlled banking institution. o strained relationship between NUBE and the Union is no longer
Its rank-and-file EEs, being government personnel, were represented for conducive to a fruitful partnership between them and could even
collective negotiation by the Philnabank Employees Association threaten industrial peace between the Union and the management of
(PEMA), a public sector union PNB.
 The SEC approved PNB’s new Articles of Incoroporation and By-laws o the current officers of the Union have no choice but to listen to the
and its changed status as a private corporation. PEMA affiliated with clamor of the overwhelming majority of union members for the
petitioner National Union of Bank Employees (NUBE), which is a labor Union to disaffiliate from NUBE.
federation composed of unions in the banking industry, adopting the  The duly notarized Resolution was signed by the officers and was
name NUBE-PNB Employees Chapter (NUBE-PEC). ratified by about 81% of the total union membership
 NUBE-PEC filed a motion before the Med-Arb Unit of DOLE, praying  Aggrieved, PEMA filed before the CA a petition for the issuance of a
that, in view of its independent registration as a labor union and TRO or writ of preliminary injunction (WPI).
disaffiliation from NUBE, its name as appearing in the official ballots of  |CA| denied the application for WPI and the MR as well.
the certification election be changed to PEMA OR in the alternative,  However, petitioner again filed an Urgent Motion for the Issuance of a
both parties be allowed to use the name “PEMA” but with PEMA-FFW TRO against the Resolution of DOLE Acting Secretary Imson,
and NUBE-PEC be denominated as “PEMA-Bustria Group” and  |CA|devlared the validity of PEMAs disaffiliation from NUBE and
“PEMA-Serrana Group”, respectively directed PNB to return to the employees concerned the amounts deducted
 On the same date, PEMA set a letter to the PNB management informing and held in trust for NUBE starting July 2003 and to stop further
its disaffiliation from NUBE and requesting to stop the check-off of the deductions in favor of NUBE.
P15.00 due for NUBE. o As to the impropriety of denying PEMAs motion for intervention:
 PNB informed NUBE of PEMA’s letter and its decision to continue the Among the rights of the [PEMA] as an affiliate of a federation is to
deduction of the P15.00 fees, but stop its remittance to NUBE. PNB also disaffiliate from it. Any case in which this is an issue is then one in
notified NUBE that the amounts collected would be held in a trust which the union has a significant legal interest and as to which it
account pending the resolution of the issue on PEMA’s disaffiliation. must be heard, irrespective of any residual rights of the members
 NUBE replied that: it remains as the exclusive bargaining representative after a decision that might deny a disaffiliation. It is a non-sequitur to
of the PNB R&F employees; by signing the Resolution, the chapter make the intervention of the union in this case dependent on the
officers have abandoned NUBE-PEC and joined another union and question of whether its members can pursue their own agenda under
therefore abdicated their respective positions and resigned as such; in the same constraints.
joining another union, the chapter officers committed an act of disloyalty  NUBE filed a motion for reconsideration, but it was denied;hence, this
to NUBE-PEC and the general membership; and that PNB should cease petition.
and desist from dealing with the officerswho are expelled from
NUBE-PEC. With regard to the issue of non-remittance of the union
dues, NUBE enjoined PNB to comply with the union check-off provision RULING:Petition DENIED
of the CBA; otherwise, it would elevate the matter to the grievance
machinery in accordance with the CBA. Whether there was a valid disaffiliation - YES
 Despite NUBE’s response, PNB stood firm on its decision. Alleging
ULP for non-implementation of the grievance machinery and procedure,  The right of the local union to exercise the right to disaffiliate from its
NUBE brought thematter to the NCMB for preventive mediation.In time, mother union is well settled in this jurisdiction.
PNB and NUBE agreed to refer the case to the Office of the DOLE  MSMG-UWP v. Hon. Ramos: A local union has the right to disaffiliate
Secretary forvoluntary arbitration. They executed a Submission from its mother union or declare its autonomy. A local union, being a
Agreement. separate and voluntary association, is free to serve the interests of all
 Meantime, the DOLE denied PEMA’s motion to change its name in the its membersincluding the freedom to disaffiliate or declare its
official ballots. The certification election was finally held on October 17, autonomy from the federation which it belongs when circumstances
2003.The results indicated that NUBE-PEC won warrant, in accordance with the constitutional guarantee of freedom
 PEMA filed before the voluntary arbitrator an Urgent Motion for of association. The purpose of affiliation by a local union with a mother
Intervention, alleging that it stands to be substantially affected by union or a federation is to increase by collective action the bargaining
whatever judgment that may be issued, because one of the issues for power in respect of the terms and conditions of labor. Yet the locals
resolution is the validity of its disaffiliation from NUBE. remained the basic units of association, free to serve their own and
 |DOLE Acting Secretary Imson|denied PEMAs motion for intervention the common interest of all, subject to the restraints imposed by the
and ordered PNB to release all union dues withheld and to continue Constitution and By-Laws of the Association, and free also to
remitting the same to NUBE. 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 Whether PEMA’s disaffiliation is invalid for non-observance of the
anytime and such disaffiliation cannot be considered disloyalty. In procedure that union members should make such determination
the absence of specific provisions in the federation’s constitution through secret ballot conformably with Article 241(d) of the Labor Code
prohibiting disaffiliation or the declaration of autonomy of a local union,
– NO.
a local may dissociate with its parent union.
 Philippine Skylanders, Inc. v. National Labor Relations Commission: we  Conspicuously, other than citing the opinion of a “recognized labor law
upheld the right of local unions to separate from their mother federation authority,” NUBE failed to quote a specific provision of the law or rule
on the ground that as separate and voluntary associations, local unions mandating that a local union’s disaffiliation from a federation must
do not owe their creation and existence to the national federation to comply with Article 241 (d) in order to be valid and effective.
which they are affiliated but, instead, to the will of their  Granting arguendo that Article 241 (d) is applicable, PEMA’s
members…Admittedly, there are times when without succor and support
disaffiliation from NUBE is still valid.
local unions may find it hard, unaided by other support groups, to secure
 First, noncompliance with the procedure on disaffiliation, being premised
justice for themselves.
on purely technical grounds cannot rise above the employees’
Yet the local unions remain the basic units of association, free to
fundamental right to self-organization and to form and join labor
serve their own interests subject the restraints imposed by the
organizations of their own choosing for the purpose of collective
constitution and by-laws of the national federation, and free also to
bargaining.
renounce the affiliation upon the terms laid down in the agreement which
brought such affiliation into existence.  Second, the Article nonetheless provides that when the nature of the
Such dictum has been punctiliously followed since then. organization renders such secret ballot impractical, the union officers
may make the decision in behalf of the general membership. In this case,
 Cirtek Employees Labor Union-FFW v. Cirtek Electronics, Inc.: A local
NUBE did not even dare to contest PEMA’s representation that “PNB
union may disaffiliate at any time from its mother federation, absent
employees are scattered from Aparri to Jolo, manning more than 300
any showing that the same is prohibited under its constitution or
branches in various towns and cities of the country,” hence, to gather the
rule. Such, however, does not result in it losing its legal personality
general membership of the union in a general membership to vote
altogether.A local labor union is a separate and distinct unitprimarily
through secret balloting is virtually impossible.” It is understandable,
designed to secure and maintain an equality of bargaining power between
therefore, why PEMA’s board of directors merely opted to submit for
the employer and their employee-members. A local union does not owe
ratification of the majority their resolution to disaffiliate from NUBE.
its existence to the federation with which it is affiliated. It is a
 Third, and most importantly, NUBE did not dispute the existence of the
separate and distinct voluntary association owing its creation to the
will of its members. The mere act of affiliation does not divest the local persons or their due execution of the document showing their
union of its own personality, neither does it give the mother federation unequivocal support for the disaffiliation of PEMA from NUBE. Note
the license to act independently of the local union. It only gives rise to a must be taken of the fact that the list of PEMA members (identifying
contract of agency where the former acts in representation of the latter. themselves as “PEMA­Serrana Group”) who agreed with the board
resolution was attached as Annex “H” of PEMA’s petition before the CA
 In the absence of enforceable provisions in the federation’s constitution,
and covered pages 115 to 440 of the CA Rollo. While fully displaying
by-laws and charter preventing disaffiliation of a local union, a local may
the employees’ printed name, identification number, branch, position,
sever its relationship with its parent. In the case at bar, there is nothing
and signature, the list was left unchallenged by NUBE. No evidence was
shown in the records nor is it claimed by NUBE that PEMA was
presented that the union members’ ratification was obtained by mistake
expressly forbidden to disaffiliate from the federation nor were there any
or through fraud, force or intimidation. Surely, this is not a case where
conditions imposed for a valid breakaway. This being so, PEMA is not
one or two members of the local union decided to disaffiliate from the
precluded to disaffiliate from NUBE after acquiring the status of an
mother federation, but one where more than a majority of the local union
independent labor organization duly registered before the DOLE.
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
 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.
 PHILIPPINE LABOR ALLIANCE COUCIL v. BLR FACTS:

January 31, 1977|Fernando J. | Certification elections  The case started with an allegation that there was a renewal of the
collective bargaining agreement with a union shop clause on March
SUMMARY: PLAC was the bargaining agent of Orion Manila Inc. PLAC 9,1974 between petitioner union and respondent company to last for
alleges that 1) On March 9, 1974, there was a renewal of the CBA with a another period of three (3) years incorporating therein new economic
union shop clause to last for 3 years (at the time, it was the unchallenged benefits to expire on December 31, 1977.
bargaining agent of Orion) 2) the new CBA was duly ratified on May 27,  Claim: at that time, it was the only bargaining agent of the respondent
company unchallenged by any labor organization.
1974 by more than 1.5k members (unanimous vote) 3) after renewal and
 Then came the assertion that on May 27, 1974, with due notice to all the
ratification, BLR certified the new CBA, there was no pending request for members of the petitioner union, and with more than 1,500 of them
union recognition by any other labor organization 4) On June 20, FFW present, such collective bargaining agreement was ratified by a
sought a certification election alleging that its members represent more than unanimous vote.
60% of the 1.5k members (around 800+).  It was then certified by the former NLRC on June 4, 1974.
o Allegedly, there was no pending request for union recognition by
any other labor organization with management.
PLAC opposed the certification election because of the newly certified CBA.  Thereafter, on June 20, 1974, respondent Federation of Free Workers,
SOLE dismissed the Certification Election on the same ground. setting forth that its members represent more than 60% out of 1,500
members, more or less, rank-and-file employees of respondent company,
sought a certification election.
 Petitioner union opposed because the collective bargaining agreement
FFW filed a complaint with BLR because 848 employees disaffiliated with entered into with the respondent company had already been certified.
PLAC and affiliated with FFW and that the CBA was entered into to thwart  NLRC: dismissed certification because of the existence of a certified
such disaffiliation. Thus, it was asking for the declaration of the nullity of the CBA
CBA. BLR set aside the certification of CBA and ordered a certification  SOLE: Affirmed
election to follow since it found out that the CBA was not ratified by the  FFW filed a complaint with the BLR, the present Labor Code having
employees—a blatant non-observance of a requirement to certification. It become effective, alleging: 848 employees (in a resolution attached to
reasoned out that the certification election would be the most expedient the complaint) disaffiliated with PLAC and affiliated with them
 They characterized the certified agreement as having been entered into
method or settling the dispute (to determine which one is the exclusive
allegedly to thwart such disaffiliation and seeking a declaration of
bargaining representative). PLAC now claims that BLR acted in violation of the nullity thereof.
the Labor Code and of due process. The Court held that while the CBA was a  Med-Arbiter: dismissed the complaint
bar to certification elections, it was decertified by the BLR (which has the  BLR (upon MR): issued an order setting aside the certification of the
power to do so) CBA and ordering a certification election within 20 days from receipt
of the order, upon the following declaration:
DOCTRINE: Mass disaffiliation is implicit in the freedom of association. o "In the instant case, it is not disputed that the collective
This liberty is needed if the institution of collective bargaining as an aspect bargaining agreement certified by the National Labor Relations
of industrial democracy is to succeed. Once the fact of disaffiliation is Commission was not ratified by the majority of the employees
demonstrated beyond doubt, certification elections are the most expeditious within the bargaining unit. This is defective. It is blatant non-
way to determine the exclusive bargaining representative observance of the basic requirement necessary to certification. ...
 o With respect to the complaint of the confirmation of a business enterprise, managment and labor, establishing a
disaffiliation of the members of respondent Philippine Labor regime of self-rule. As was pointed out by Chief Justice
Alliance Council, the same should be resolved in the most Castro in Rivera v. San Miguel Brewery Corporation, Inc.,
"a collective bargaining agreement is the law of the plant."
expedient and simple method of determining the exclusive
 Mactan Workers Union v. Aboitiz:
bargaining representative—the holding of a certification
o 'The terms and conditions of a collective bargaining contract
election" constitute the law between the parties.' What could be aptly
stressed then, as was done in CompaniaMaritima v.
RULING: Petition DISMISSED CompaniaMaritima Labor Union, is "the primacy to which
the decision reached by the employees themselves is
Whether or not BLR, in ordering decertification of CBA with PLAC entitled."
(and followed by a certification election) committed a transgression of o 'That is in the soundest tradition of industrial democracy. For
the Labor Code—NO collective bargaining implies that instead of a unilateral
imposition by management, the terms and conditions of
 It is indisputable that the present controversy would not have arisen if employment should be the subject of negotiation between it
there were no mass disaffiliation from petitioning Union. and labor. Thus the two parties indispensable to the economy
 Such a phenomenon is nothing new in the Philippine labor movement. are supposed to take care of their respective interests.
Nor is it open to any legal objection. It is implicit in the freedom of Moreover, the very notion of industrial self-rule negates the
association explicitly ordained by the Constitution. There is then the assumption that what is good for either party should be left
incontrovertible right of any individual to join an organization of his to the will of the other. On the contrary, there is an
choice. That option belongs to him. awareness that labor can be trusted to promote its welfare
 He may be, as a matter of fact, more in need of it if the institution of through the bargaining process. To it then must be left the
collective bargaining as an aspect of industrial democracy is to choice of its agent for such purpose.' To paraphrase an
succeed. observation of the recently retired Chief Justice Makalintal
 No obstacle that may possibly thwart the desirable objective of in Seno v. Mendoza, it is essential that there be an agreement
militancy in labor's struggle for better terms and conditions is then to to govern the relations between labor marked by confusion,
be placed on his way. with resulting breaches of the law by either party. There is, it
 Once the fact of disaffiliation has been demonstrated beyond doubt, as would appear, a decidedly unsympathetic approach to the
in this case, a certification election is the most expeditious way of institution of collective bargaining at war with what has so
determining which labor organization is to be the exclusive often and so consistently decided by this Tribunal."
bargaining representative.  A different conclusion could have been reached had there been no
 The Court cited Philippine Association of Free Labor Unions v. decertification The contract-bar rule could then be invoked by
Bureau of Labor Relations: petitioner.
o "Petitioner thus appears to be woefully lacking in awareness  Confederation of Citizens Labor Unions v. National Labor Relations
of the significance of a certification election for the Commission:
collective bargaining process. It is the fairest and most o "a principle in labor law that a collective bargaining
effective way of determining which labor organization can agreement of reasonable duration is, in the interest of the
truly represent the working force. It is a fundamental stability of industrial relations, a bar to certification
postulate that the will of the majority, if given expression in elections."
an honest election with freedom on the part of the voters to  Even then, as was pointed out in the just-cited Philippine Association
make their choice, is controlling. No better device can assure of Free Labor Unions decision, it "is not to be applied with rigidity.
the institution of industrial democracy with the two parties to ... The element of flexibility in its operation cannot be ignored."
 In this controversy, however, such a principle is not applicable. The purposely to defeat the right of the covered employees to choose
collective bargaining agreement entered into by petitioner with their bargaining representative at the proper time appointed by
management on March 9, 1974 was decertified in the challenged law.
order of April 8, 1975.  There was no urgency for the premature renegotiations considering
 The power to decertify by respondent Bureau is not disputed. It that the new agreement provides for a 50-centavo salary increase
was the exercise thereof that is now assailed. If done arbitrarily, there effective yet on January 1, 1976."
is valid ground for complaint.
 The due process clause is a guarantee against any actuation of that sort.
It stands for fairness and justice, That standard was not ignored. Whether or not the holding of a certification elections was an
 The petition was not able to prove any allegation of the violation of appropriate mode of solving the dispute—YES
due process—either procedural or substantive
o (Procedural) Petitioner was heard by respondent Bureau  With the decertification of the collective agreement, the representation
before the order of decertification was issued on April 8, issue comes back to the fore.
1975.  Good policy and equity demand that when an agreement is renegotiated
o The denial of its motion for reconsideration came also after before the appointed 60-day period, its certification must still give way to
it had an opportunity to present its side any representation issue that may be raised within 60-day period so that
o (Substantive) It was not proven that BLR acted with the right of employees to choose a bargaining unit agent and the right, of
arbitrariness or capriciousness unions to be chosen shall be preserved.
 In the order of April 8, 1975, it was specifically pointed out;  According to the Court, a certification election can still be held even if
o "In the instant case, it is not disputed that the collective the collective agreement were certified, considering the peculiar facts of
bargaining agreement certified by the National Labor the case.
Relations Commission was not ratified by the majority of the
employees within the bargaining unit. This is defective. It is
blatant non-observance of the basic requirement necessary to
certification.
o To allow it to remain uncorrected would allow BARREDO, J., concurring:
circumvention of what the law specifically ordained. We
cannot countenance irregularities of the highest order to exist With the observation that nothing herein modifies the general rule that while
in our very own eyes to be perpetuated. a bargaining wish may be changed, the effectivity and enforceability with a
 With respect to the complaint of the confirmation of disaffiliation of valid collective bargaining contract cannot be affected thereby.
the members of respondent Philippine Labor Alliance counsel the
same should be resolved in the most expedient and simple method of
determining the exclusive bargaining representative — the holding
of a certification election."
 In the order denying the motion for reconsideration dated July 31,
1975, it was first noted: "On January 20, 1975, FFW and 848 Orion
employees filed with the Bureau a petition for the annulment of the
1974 collective bargaining agreement and for the confirmation of the
disaffiliation of the 848 employees from PLAC and their affiliation
with FFW.
 The petition alleged among others, that the new agreement was
concluded about ten months before the expiry date of the old
 ANGLO v. SAMANA-BAY  In representation of SAMANA BAY, ANGLO entered into a CBA with
CORPORATIONS(Manila Bay Spinning Mills and J.P. Coats Manila
July 5, 1996 | Francisco, J. | Period of Disaffiliation Bay, Inc.)
 Later, SAMANA BAY decided to disaffiliate from ANGLO in view of
SUMMARY:SAMANA BAY is an affiliate of ANGLO. ANGLO, in the latter’s dereliction of its duty to promote and advance the welfare of
representation of SAMANA BAY entered into a CBA with SAMANA BAY and the alleged cases of corruption involving the
CORPORATIONS. While the CBA was still existing, SAMANA BAY federation officers. This was unanimously confirmed by the members of
decided to disaffiliate from ANGLO in view of the latter’s dereliction of its SAMANA BAY.
duty to promote and advance the welfare of SAMANA BAY and the alleged  SAMANA BAY filed a petition to stop remittance of federation dues
to ANGLO with the BLR on the ground that the corporations, despite
cases of corruption involving the federation officers. This was unanimously having been furnished copies of the union resolution relating to said
confirmed by the members of SAMANA BAY. SAMANA BAY then filed a disaffiliation, refused to honor the same.
petition to stop remittance of federation dues to ANGLO with the BLR.  ANGLO counter-acted by unseating all officers and board members of
ANGLO argued that the disaffiliation was invalid because the procedural SAMANA BAY and appointing, in their stead, a new set of officers who
requirements were not followed and it was made in violation of PD 1391 were duly recognized by CORPORATIONS.
since a collective bargaining agreement is still existing and the freedom  MA – Disaffiliation was void but ouster of officers was illegal.
period has not yet set in. MA held that the disaffiliation was void. SOLE held  SOLE – Modified the order of MA: Disaffiliation was valid.
that it was valid. SC affirmed the SOLE ruling that non-compliance with the
RULING:Petition is dismissed.
procedure on disaffiliation, being premised on purely technical grounds
cannot rise above the fundamental right of self-organization and that
jurisprudence provides an exception to PD 1391.
Whether the disaffiliation was valid – YES.
DOCTRINE: GR: A labor union may disaffiliate from the mother union to
form a local or independent union only during the 60-day freedom period  Petitioner: Disaffiliation was invalid because the procedural
immediately preceding the expiration of the CBA. EXC: Even before the requirements were not followed and it was made in violation of PD 1391
onset of the freedom period, disaffiliation may be carried out when there is a since a collective bargaining agreement is still existing and the freedom
period has not yet set in.
shift of allegiance on the part of the majority of the members of the union. |
 Non-compliance with the procedure on disaffiliation, being premised
Effect of disaffiliation: The mere act of affiliation does not divest the local on purely technical grounds cannot rise above the fundamental right
union of its own personality, neither does it give the mother federation the of self-organization.
license to act independently of the local union. It only gives rise to a contract o All employees enjoy the right to self-organization and to
of agency where the former acts in representation of the latter. form and join labor organizations of their own choosing
for the purpose of collective bargaining.
FACTS: o In interpreting the protection to labor and social justice
provisions of the Constitution and the labor laws, rules
 Respondent SAMANA BAY (Samahan Ng Mga Mangagawang or regulations, we have always adopted the liberal
Nagkakaisa sa Manila Bay Spinning Mills and J.P. Coats) is an affiliate approach which favors the exercise of labor rights. This
of petitioner ANGLO (Alliance of Nationalist and Genuine Labor Court is not ready to bend this principle to yield to a
Organization). mere procedural defect. (Note: it wasn’t mentioned in
the case which procedural requirements were not met.)
 o The resolution of the general membership ratifying the
disaffiliation action initiated by the Board, substantially
satisfies the procedural requirements for disaffiliation.
No doubt was raised on the support of the majority of
the union members on the decision to disaffiliate. This is
clearly supported by evidence.
 Jurisprudence provides an exception to PD 1391.
o PD 1391: No petition for certification election, for
intervention and disaffiliation shall be entertained or
given due course except within the 60-day freedom
period immediately preceeding the expiration of a CBA.
o Generally, a labor union may disaffiliate from the
mother union to form a local or independent union only
during the 60-day freedom period immediately
preceding the expiration of the CBA.
o However, even before the onset of the freedom period,
disaffiliation may be carried out when there is a shift of
allegiance on the part of the majority of the members of
the union. (From footnote: Associated Workers
Union-PTGWO vs. NLRC)

Whether ANGLO can validly oust all officers and board members of
SAMANA BAY – NO.

 Petitioner: They were validly ousted as they have ceased to be officers

of ANGLO at the time of disaffiliation.
 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.
 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.
 By SAMANA BAY’s disaffiliation from ANGLO, the vinculum that
previously bound the two entities was completely severed. ANGLO was
divested of any and all power to act in representation of SAMANA
BAY.
 Thus, any act performed by ANGLO affecting the interests and affairs of
SAMANA BAY, including the ouster of herein individual private
respondents, is rendered without force and effect.