KNITJOY V Calleja

KNITJOY MANUFACTURING v.
PURA FERRER-CALLEJA +
 1 December 1987 Decision of respondent Director of the Bureau of Labor Relations in BLR, which reversed the Order of Med-
Arbiter-Designate Rolando S. dela Cruz dated 4 September 1987 and ordered the holding of a certification election among the regular
rank-and-file monthly-paid employees of (KNITJOY), is assailed by the latter.
 The Med-Arbiter's order dismissed the petition of private respondent Knitjoy Monthly Employees Union (KMEU) for such certification
election and directed the parties "to work out (sic) towards the formation of a single union in the company."
Facts:
Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of Filipino Workers
(FFW). The bargaining unit covered only the regular rank-and-file employees of KNITJOY paid on a daily or
piece-rate basis. It did not include regular rank-and-file office and production employees paid on a monthly basis.
The CBA expired on 15 June 1987. Prior to its expiration, the FFW was split into two (2) factions -- the Johnny
Tan and the Aranza mendez factions. The latter eventually became the Confederation of Filipino Workers (CFW)
Also prior to the expiration of the CBA, the Trade Union of the Philippines and Allied Services (TUPAS) filed a
petition for the holding of a certification election among KNITJOY's regular rank-and-file employees paid on a
daily and piece-rate basis. Excluded were the regular rank-and-file employees paid on a monthly basis. In the
certification election conducted on 10 June 1987, CFW emerged as the winner; thereafter, negotiations for a new
CBA between CFW and KNITJOY commenced.
On 24 June 1987, during the pendency of the said negotiations, private respondent KMEU filed a petition for
certification election among KNITJOY's regular rank-and-file monthly paid employees with (DOLE).
The (KMEA-CCLU), another union existing in the said company, and petitioner CFW intervened therein.
The petition was dismissed in the Order of Med-Arbiter Rolando S. de la Cruz, the premises considered,
Dismissed, but the parties are instructed to work out (sic) towards the formation of a single union in the
company."[1]
KMEU filed a motion to reconsider this order, which was treated as an appeal by the (BLR).
On 1 December 1987, public respondent Pura Ferrer-Calleja, Director of the BLR, handed down a
Decision[2]reversing the order of Med-Arbiter de la Cruz.
"WHEREFORE, premises considered, the Appeal of Knitjoy Monthly Employees is hereby granted subject to the
exclusion of the monthly paid employees who are deemed managerial.
Let, therefore, the certification election proceed without delay, with the following as choices:
1. Knitjoy Monthly Employees Union (KMEU); and
2. No Union.
The company's latest payroll shall be the basis in determining the list of eligible voters.
Issues
1. Whether or not petitioner KNITJOY'S monthly-paid regular rank-and-file employees can constitute an
appropriate bargaining unit separate and distinct from the existing unit composed of daily or piece-rate paid
regular rank-and-file employees, and
2. Whether or not the inclusion in the coverage of the new CBA between KNITJOY and CFW of the monthly-
paid rank-and-file employees bars the holding of a certification election among the said monthly paid employees.
Decision
1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater
mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength
could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and
dissension, is not without exceptions.
The present Article 245 of the Labor Code expressly allows supervisory employees who are not performing
managerial functions to join, assist or form their separate union but bars them from membership in a labor
organization of the rank-and-file employees. It reads:
"ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.
-- Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own."
This provision obviously allows more than one union in a company.
Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, which seeks
to implement the policy, also recognizes exceptions. It reads:
"SEC. 2. Who may file. -- Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition.
The petition, when filed by a legitimate labor organization shall contain, among others:
xxx
(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; x
x x." (Emphasis supplied)
The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit,
plant unit, or a subdivision thereof; the recognition of these exceptions takes into account the policy to assure
employees of the fullest freedom in exercising their rights.[12] Otherwise stated, the one company-one union policy
must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-
organization and to enter into collective bargaining negotiations, among others, which the Constitution
guarantees.[13]
The right to form a union or association or to self-organization comprehends two (2) broad notions, to wit: (a) the
liberty or freedom, i.e., the absence of restraint which guarantees that the employee may act for himself without
being prevented by law, and (b) the power, by virtue of which an employee may, as he pleases, join or refrain
from joining an association.
In the latter case, KNITJOY and CFW are guilty of contumacious conduct. It goes without saying then that the
new CBA cannot validly include in its scope or coverage the monthly-paid rank-and-file employees of KNITJOY.
It does not bar the holding of a certification election to determine their sole bargaining agent and the negotiation
for and the execution of a subsequent CBA between KNITJOY and the eventual winner in said election. Section
4, Rule V, Book V of the Rules Implementing the Labor Code expressly provides:
"SEC. 4. Effects of early agreements. -- The representation case shall not, however, be adversely affected by a
collective bargaining agreement registered before or during the last 60 days of a subsisting
agreement orduring the pendency of the representation case." (Emphasis supplied)
The public respondent then committed no abuse of discretion in ordering a certification election among the
monthly-paid rank-and-file employees, except managerial employees, of KNITJOY. The choice however, should
not be, as correctly contended by CFW, limited to merely (a) KMEU and (b) no union. The records disclose that
the intervenors in the petition for certification are the KMEA-CCLU and CFW. They should be included as among
the choices in the certification election.
WHEREFORE, the instant petitions are DISMISSED.

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