G.R. No. 131235 November 16, 1999 UST FACULTY UNION (USTFU), GIL Y.

GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners, vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents. PANGANIBAN, J.: There is a right way to do the right thing at the right time for the right reasons, 1 and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the union's constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law. The Case The Petition for Certiorari before us assails the August 15, 1997 Resolution 2 of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of MedArbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows: WHEREFORE, premises considered, judgment is hereby rendered declaring the election of USTFU officers conducted on October 4, 1996 and its election results as null and void ab initio. Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist from acting and performing the duties and functions of the legitimate officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to [the] union's constitution and by-laws (CBL). The Temporary Restraining Order (TRO) issued by this Office on December 11, 1996 in connection with the instant petition, is hereby made and declared permanent. 3

Likewise challenged is the October 30, 1997 Resolution denied petitioners' Motion for Reconsideration. The Facts

of Director Bitonio, which

The factual antecedents of the case are summarized in the assailed Resolution as follows: Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998. On 21 September 1996, appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all USTFU members announcing a general assembly to be held on 05 October 1996. Among others, the general assembly was called to elect USTFU's next set of officers. Through the notice, the members were also informed of the constitution of a Committee on Elections (COMELEC) to oversee the elections. (Annex "B", petition) On 01 October 1996, some of herein appellants filed a separate petition with the Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was not constituted in accordance with USTFU's constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05 October 1996 election. On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents (See paragraph VI, Respondents' Comment and Motion to Dismiss), issued notices allowing all faculty members to hold a convocation on 04 October 1996 (See Annex "C" Petition; Annexes "4" to "10", Appeal). Denominated as [a] general faculty assembly, the convocation was supposed to discuss the "state of the unratified UST-USTFU CBA" and "status and election of USTFU officers" (Annex "11", Appeal) On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610001 issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996. Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as scheduled. The general assembly was attended by members of the USTFU and, as admitted by the appellants, also by "non-USTFU members [who] are members in good standing of the UST Academic Community Collective Bargaining Unit" (See paragraph

XI, Respondents' Comment and Motion to Dismiss). On this occasion, appellants were elected as USTFU's new set of officers by acclamation and clapping of hands (See paragraphs 40 to 50, Annex "12", Appeal). The election of the appellants came about upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and "the rules of the election be suspended and that the election be held [on] that day" (See paragraph 39, Idem.) On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the nullification of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFU's CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL. On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for "Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order." According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, "including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION" (Paragraph XVIII3, Respondents' Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees' scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFU's CBL and that one of the members of the COMELEC was not a registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to "insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate" (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of

College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996. On 03 December 1996, appellants and UST allegedly entered into another CBA covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants' Rejoinder to the Reply and Opposition). Consequently, appellees again moved for the issuance of a temporary restraining order to prevent appellants from making further representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the former's duties and functions and should be stopped from continuing such acts. On 11 December 1996, over appellants' insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU. In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of UST's academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees' petition for prohibition on the ground that this had become moot and academic. 5 Petitioners appealed the med-arbiter's Decision to the labor secretary, 6 who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code. 7 The Assailed Ruling Agreeing with the med-arbiter that the USTFU officers' purported election held on October 4, 1994 was void for having been conducted in violation of the union's Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners' contention that it was a legitimate exercise of their right to self-organization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU. Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly "elected" set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio:

This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law. To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to self-organization. To allow appellants to become USTFU officers on the strength of management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization. 8 Hence, this Petition.
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The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of the October 4, 1996 general assembly called by the UST administration. First Issue: Right to Self-Organization and Union Membership At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma 11 has held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in the instant case have been filed prior to the promulgation and finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of remanding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the present case seriatim. Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. 12 Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union. 13 Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. 14 Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union's constitution and bylaws. 15 An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the union's rules and regulations. When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union. On joining a labor union, the constitution and by-laws become a part of the member's contract of membership under which he agrees to become bound by the constitution and governing rules

The Issues The main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers "elected" during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions: 10 (1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.] (2) Whether the suspension of the provisions of the Constitution and By-Laws of the USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in "peaceful concerted activities" for the purpose of ousting the corrupt regime of the private respondents[.] (3) Whether the overwhelming ratification of the Collective Bargaining Agreement executed by the petitioners in behalf of the USTFU with the University of Santo Tomas has rendered moot and academic the issue as to the validity of the suspension of the Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty Assembly[.] The Courts Ruling

of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights. 16 Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latter's incumbency impelled the October 4, 1996 election of the new set of USTFU officers. They assert that such exercise was pursuant to their right to self-organization. Petitioners' frustration over the performance of private respondents, as well as their fears of a "fraudulent" election to be held under the latter's supervision, could not justify the method they chose to impose their will on the union. Director Bitonio aptly elucidated: 17 The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers' organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the union's CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule. Union Election vs. Certification Election A union election is held pursuant to the union's constitution and bylaws, and the right to vote in it is enjoyed only by union members. A union election should be distinguished from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective bargaining. 18 Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the affirmative case, by which particular labor organization. 19 In a certification election, all employees belonging to the appropriate bargaining unit can vote. 20 Therefore, a union member who likewise belongs to the appropriate

bargaining unit is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity. In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the USTFU's CBL for the election of officers was not followed. It could not have been a certification election either, because representation was not the issue, and the proper procedure for such election was not followed. The participation of non-union members in the election aggravated its irregularity. Second Issue: USTFU's Constitution and By Laws Violated The importance of a union's constitution and bylaws cannot be overemphasized. They embody a covenant between a union and its members and constitute the fundamental law governing the members' rights and obligations. 21 As such, the union's constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or public policy. We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996 election was tainted with irregularities because of the following reasons. First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas. 22 It was not convened in accordance with the provision on general membership meetings as found in the USTFU's CBL, which reads: ARTICLE VIII-MEETINGS OF THE UNION Sec. 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the Secretary-General at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the meetings shall be determined by the Board of Officers. 23 Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no legal fiat was such assembly transformed into a union activity by the participation of some union members. Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFU's CBL, which provide:

ARTICLE IX - UNION ELECTION Sec. 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The functions of the COMELEC include the following: a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special; b) Pass upon qualifications of candidates; c) Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and d) Proclaim duly elected officers. Sec. 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers. xxx xxx xxx
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members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio correctly observed: Further, appellants cannot be heard to say that the CBL was effectively suspended during the 04 October 1996 general assembly. A union CBL is a covenant between the union and its members and among members (Johnson and Johnson Labor UnionFFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention No. 87 speaks of a union's full freedom to draw up its constitution and rules, it includes freedom from interference by persons who are not members of the union. The democratic principle that governance is a matter for the governed to decide upon applies to the labor movement which, by law and constitutional mandate, must be assiduously insulated against intrusions coming from both the employer and complete strangers if the "protection to labor clause" of the constitution is to be guaranteed. By appellant's own evidence, the general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was attended by members and non-members alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFU's CBL was not a member of USTFU. Allowing a non-union member to initiate the suspension of a union's CBL, and non-union members to participate in a union election on the premise that the union's CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize. If there are members of the so-called "academic community collective bargaining unit" who are not USTFU members but who would nevertheless want to have a hand in USTFU's affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very clearly spelled out in Article IV of USTFU's CBL. Having become members, they could then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that "if a member of the union dislikes the provisions of the by-laws he may seek to have them amended or may withdraw from the union; otherwise he must abide by them." Under Article XVII of USTFU's CBL, there is also a specific provision for constitutional amendments. What is clear therefore is that USTFU's CBL provides for orderly procedures and remedies which appellants could have easily availed [themselves] of instead of resorting to an exercise of their so-called "residual power". 26 Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the union's CBL 27 and by the Labor Code. 28 They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFU's CBL and of due process. The end never justifies the means. We agree with the solicitor general's observation that "the act of suspending the constitution when the questioned election was held is an implied admission that the

Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the USTFU's CBL, as well as Article 241 (c) of the Labor Code. The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director Bitonio's finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations, 25 we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process undue haste, lack of adequate safeguards to ensure integrity of the voting, and the absence of the notice of the dates of balloting. Third Issue: Suspension of USTFU's CBL Petitioners contend that the October 4, 1996 assembly "suspended" the union's CBL. They aver that the suspension and the election that followed were in accordance with their "constituent and residual powers as members of the collective bargaining unit to choose their representatives for purposes of collective bargaining." Again they cite the numerous anomalies allegedly committed by the private respondents as USTFU officers. This argument does not persuade. First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly were

election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution . . .." 29 The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the new CBA, not the issue of union leadership a matter that should be decided only by union members in the proper forum at the proper time and after observance of proper procedures. Epilogue In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations imputed by the petitioners to the private respondents; these are not at issue in the present case. Petitioners can bring their grievances and resolve their differences with private respondents in timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt with accordingly in the proper forum after the observance of due process. WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs against petitioners. SO ORDERED. SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents. DECISION ROMERO, J.: This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91[1] entitled In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner. The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election. The antecedent facts are undisputed: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for District Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit. On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiters error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent companys Appeal and ordered the remand of the case to the MedArbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit. Upon petitioner-unions motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis. On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings. On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC[2] case. Said Order reads in part: x x x Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. In this case, S3 and S4 and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above courts ruling. Consequently, they are not allowed to participate in the certification election. WHEREFORE, the motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election.[3] Hence this petition. For resolution in this case are the following issues: 1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. On the first issue, this Court rules that said employees do not fall within the term confidential employees who may be prohibited from joining a union. There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245[4] of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not. Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.[5] The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employees and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations.[6] The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the confidential employee rule. The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests.[7] Management should not be required to handle labor relations matters through employees who are represented by the union with the company is required to deal and who in the normal performance of their duties may obtain advance information of the companys position with regard to contract negotiations, the disposition of grievances, or other labor relations matters.[8] There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez,[9] the Court held that if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the presence of managerial employees in Union membership. The same rationale was applied to confidential employees in Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more recent case of Philips Industrial Development, Inc. v. NLRC[11] which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them.[12] An important element of the confidential employee rule is the employees need to use labor relations information. Thus, in determining the confidentiality of certain

employees, a key questions frequently considered is the employees necessary access to confidential labor relations information.[13] It is the contention of respondent corporation that Supervisory employees 3 and 4 and the exempt employees come within the meaning of the term confidential employees primarily because they answered in the affirmative when asked Do you handle confidential data or documents? in the Position Questionnaires submitted by the Union.[14] In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to labor relations.[15] Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee.[16] If access to confidential labor relations information is to be a factor in the determination of an employees confidential status, such information must relate to the employers labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not clause an employee to be excluded from the bargaining unit representing employees of the union or association.[17] Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information[18] or technical trade secrets, will not render an employee a confidential employee.[19] Herein listed are the functions of supervisors 3 and higher: 1. To undertake decisions to discontinue/temporarily stop shift operations when situations require. 2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products. 3. To administer efficient system of evaluation of products in the outlets. 4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials. 5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.[20] It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employers internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board,[21] an employee may not be excluded from appropriate bargaining unit merely because he has access to

confidential information concerning employers internal business operations and which is not related to the field of labor relations. It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to all workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right bargain collectively through representatives of their choosing.[22] In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle confidential data as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union.[23] In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out. It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests. This Court finds the contention of the petitioner meritorious. An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.[24] A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining.[25] It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective bargaining unit.[26] It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the Mandate of the Constitution.[27] The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University of the Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative. WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.

SO ORDERED. BENGUET ELECTRIC COOPERATIVE, INC., petitioner, -versusHON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES LABOR UNION, respondents. E.L. Gayo & Associates for petitioner. CORTES, J.: On June 21, 1985 Beneco Worker's Labor Union-Association of Democratic Labor Organizations (hereinafter referred to as BWLU- ADLO) filed a petition for direct certification as the sole and exclusive bargaining representative of all the rank and file employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as BENECO) at Alapang, La Trinidad, Benguet alleging, inter alia, that BENECO has in its employ two hundred and fourteen (214) rank and file employees; that one hundred and ninety-eight (198) or 92.5% of these employees have supported the filing of the petition; that no certification election has been conducted for the last 12 months; that there is no existing collective bargaining representative of the rank and file

employees sought to represented by BWLU- ADLO; and, that there is no collective bargaining agreement in the cooperative. An opposition to the petition was filed by the Beneco Employees Labor Union (hereinafter referred to as BELU) contending that it was certified as the sole and exclusive bargaining representative of the subject workers pursuant to an order issued by the med-arbiter on October 20,1980; that pending resolution by the National Labor Relations Commission are two cases it filed against BENECO involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars any representation question. BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric cooperative engaged in providing electric services to its members and patron-consumers in the City of Baguio and Benguet Province; and, that the employees sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor organizations of their own choosing because they are members and joint owners of the cooperative. On September 2, 1985 the med-arbiter issued an order giving due course to the petition for certification election. However, the med-arbiter limited the election among the rank and file employees of petitioner who are non-members thereof and without any involvement in the actual ownership of the cooperative. Based on the evidence during the hearing the med-arbiter found that there are thirty-seven (37) employees who are not members and without any involvement in the actual ownership of the cooperative. The dispositive portion of the med-arbiter's order is as follows: WHEREFORE, premises considered, a certification election should be as it is hereby ordered to be conducted at the premises of Benguet, Electric Cooperative, Inc., at Alapang, La Trinidad, Benguet within twenty (20) days from receipt hereof among all the rank and file employees (non-members/consumers and without any involvement in the actual ownership of the cooperative) with the following choices: 1. BENECO WORKERS LABOR UNION-ADLO 2. BENECO EMPLOYEES LABOR UNION 3. NO UNION The payroll for the month of June 1985 shall be the basis in determining the qualified voters who may participate in the certification election to be conducted. SO ORDERED. [Rollo, pp. 22-23.] BELU and BENECO appealed from this order but the same was dismissed for lack of merit on March 25,1986. Whereupon BENECO filed with this Court a petition for certiorari with prayer for preliminary injunction and /or restraining order, docketed as G.R. No. 74209, which the Supreme Court dismissed for lack of merit in a minute resolution dated April 28, 1986.

The ordered certification election was held on October 1, 1986. Prior to the conduct thereof BENECO's counsel verbally manifested that "the cooperative is protesting that employees who are members-consumers are being allowed to vote when . . . they are not eligible to be members of any labor union for purposes of collective bargaining; much less, to vote in this certification election." [Rollo, p. 28]. Petitioner submitted a certification showing that only four (4) employees are not members of BENECO and insisted that only these employees are eligible to vote in the certification election. Canvass of the votes showed that BELU garnered forty-nine (49) of the eighty-three (83) "valid" votes cast. Thereafter BENECO formalized its verbal manifestation by filing a Protest. Finding, among others, that the issue as to whether or not member-consumers who are employees of BENECO could form, assist or join a labor union has been answered in the affirmative by the Supreme Court in G.R. No. 74209, the med-arbiter dismissed the protest on February 17, 1987. On June 23, 1987, Bureau of Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter's order and certified BELU as the sole and exclusive bargaining agent of all the rank and file employees of BENECO. Alleging that the BLR director committed grave abuse of discretion amounting to lack or excess of jurisdiction BENECO filed the instant petition for certiorari. In his Comment the Solicitor General agreed with BENECO's stance and prayed that the petition be given due course. In view of this respondent director herself was required by the Court to file a Comment. On April 19, 1989 the Court gave due course to the petition and required the parties to submit their respective memoranda. The main issue in this case is whether or not respondent director committed grave abuse of discretion in certifying respondent BELU as the sole and exclusive bargaining representtative of the rank and file employees of BENECO. Under Article 256 of the Labor Code [Pres. Decree 442] to have a valid certification election, "at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit." Petitioner BENECO asserts that the certification election held on October 1, 1986 was null and void since members-employees of petitioner cooperative who are not eligible to form and join a labor union for purposes of collective bargaining were allowed to vote therein. Respondent director and private respondent BELU on the other hand submit that members of a cooperative who are also rank and file employees are eligible to form, assist or join a labor union [Comment of Respondent Director, p. 4; Rollo, p. 125; Comment of BELU, pp. 9-10; Rollo pp. 99-100]. The Court finds the present petition meritorious. The issue of whether or not employees of a cooperative are qualified to form or join a labor organization for purposes of collective bargaining has already been resolved and clarified in the case of Cooperative Rural Bank of Davao City, Inc. vs. Ferrer Calleja, et al. [G.R. No. 7795, September 26,1988] and reiterated in the cases of Batangas-Electric Cooperative Labor Union v. Young, et al. [G.R. Nos. 62386, 70880 and 74560 November 9, 1988] and San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor and Employment, et al. [G.R. No. 77231, May 31, 1989] wherein the Court had stated that the right to collective bargaining is not available to an employee of a cooperative who at the same time is a member and co-owner thereof.

With respect, however, to employees who are neither members nor co-owners of the cooperative they are entitled to exercise the rights to self-organization, collective bargaining and negotiation as mandated by the 1987 Constitution and applicable statutes. Respondent director argues that to deny the members of petitioner cooperative the right to form, assist or join a labor union of their own choice for purposes of collective bargaining would amount to a patent violation of their right to selforganization. She points out that: Albeit a person assumes a dual capacity as rank and file employee and as member of a certain cooperative does not militate, as in the instant case, against his/her exercise of the right to selforganization and to collective bargaining guaranteed by the Constitution and Labor Code because, while so doing, he/she is acting in his/her capacity as rank and file employee thereof. It may be added that while the employees concerned became members of petitioner cooperative, their status employment as rank and filers who are hired for fixed compensation had not changed. They still do not actually participate in the management of the cooperative as said function is entrusted to the Board of Directors and to the elected or appointed officers thereof. They are not vested with the powers and prerogatives to lay down and execute managerial policies; to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees; and/or to effectively recommend such managerial functions [Comment of Respondent Director, p. 4; Rollo, p. 125.] Private respondent BELU concurs with the above contention of respondent director and, additionally, claims that since membership in petitioner cooperative is only nominal, the rank and file employees who are members thereof should not be deprived of their right to self-organization. The above contentions are untenable. Contrary to respondents' claim, the fact that the members-employees of petitioner do not participate in the actual management of the cooperative does not make them eligible to form, assist or join a labor organization for the purpose of collective bargaining with petitioner. The Court's ruling in the Davao City case that members of cooperative cannot join a labor union for purposes of collective bargaining was based on the fact that as members of the cooperative they are co-owners thereof. As such, they cannot invoke the right to collective bargaining for "certainly an owner cannot bargain with himself or his coowners." [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, et al., supra]. It is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining. Respondent union further claims that if nominal ownership in a cooperative is "enough to take away the constitutional protections afforded to labor, then there would be no hindrance for employers to grant, on a scheme of generous profit sharing, stock bonuses to their employees and thereafter claim that since their employees are not stockholders [of the corporation], albeit in a minimal and involuntary manner, they are now also co-owners and thus disqualified to form

unions." To allow this, BELU argues, would be "to allow the floodgates of destruction to be opened upon the rights of labor which the Constitution endeavors to protect and which welfare it promises to promote." [Comment of BELU, p. 10; Rollo, p. 100]. The above contention of respondent union is based on the erroneous presumption that membership in a cooperative is the same as ownership of stocks in ordinary corporations. While cooperatives may exercise some of the rights and privileges given to ordinary corporations provided under existing laws, such cooperatives enjoy other privileges not granted to the latter [See Sections 4, 5, 6, and 8, Pres. Decree No. 175; Cooperative Rural Bank of Davao City v. Ferrer-Calleja, supra]. Similarly, members of cooperatives have rights and obligations different from those of stockholders of ordinary corporations. It was precisely because of the special nature of cooperatives, that the Court held in the Davao City case that members-employees thereof cannot form or join a labor union for purposes of collective bargaining. The Court held that: A cooperative ... is by its nature different from an ordinary business concern being run either by persons, partnerships, or corporations. Its owners and/or members are the ones who run and operate the business while the others are its employees. As above stated, irrespective of the number of shares owned by each member they are entitled to cast one vote each in deciding upon the affairs of the cooperative. Their share capital earn limited interest. They enjoy special privileges as-exemption from income tax and sales taxes, preferential right to supply their products to State agencies and even exemption from the minimum wage laws. An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners. It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V. Balleras made a specific finding that there are only thirty-seven (37) employees of petitioner who are not members of the cooperative and who are, therefore, the only employees of petitioner cooperative eligible to form or join a labor union for purposes of collective bargaining [Annex "A" of the Petition, p. 12; Rollo, p. 22]. However, the minutes of the certification election [Annex "C" of the Petition: Rollo, p. 28] show that a total of eighty-three (83) employees were allowed to vote and of these, forty-nine (49) voted for respondent union. Thus, even if We agree with respondent union's contention that the thirty seven (37) employees who were originally non-members of the cooperative can still vote in the certification election since they were only "forced and compelled to join the cooperative on pain of disciplinary action," the certification election held on October 1, 1986 is still null and void since even those who were already members of the cooperative at the time of the issuance of the med-arbiter's order, and therefore cannot claim that they were forced to join the union were allowed to vote in the election. Article 256 of the Labor Code provides, among others, that: To have a valid, election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit . . . [Italics supplied.]

In this case it cannot be determined whether or not respondent union was duly elected by the eligible voters of the bargaining unit since even employees who are ineligible to join a labor union within the cooperative because of their membership therein were allowed to vote in the certification election. Considering the foregoing, the Court finds that respondent director committed grave abuse of discretion in certifying respondent union as the sole and exclusive bargaining representative of the rank and file employees of petitioner cooperative. WHEREFORE, the petition is hereby GRANTED and the assailed resolution of respondent director is ANNULLED. The certification election conducted on October 1, 1986, is SET ASIDE. The Regional Office No. 1 of San Fernando, La Union is hereby directed to immediately conduct new certification election proceedings among the rank and file employees of the petitioner who are not members of the cooperative. SO ORDERED. G.R. No. 85750 September 28, 1990 INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner vs HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents. G.R. No. 89331 September 28, 1990 KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE, petitioner, vs SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE, INC., respondents. Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750. Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331. Jimenez & Associates for IRRI. Alfredo L. Bentulan for private respondent in 85750. MELENCIO-HERRERA, J.: Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of Philippine labor laws.I Facts and Issues

A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case. As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule confronted the international community. In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government and the United Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual resettlement to other countries was to be established in Bataan (Annex "A", Rollo, pp. 22-32). ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As an international organization rendering voluntary and humanitarian services in the Philippines, its activities are parallel to those of the International Committee for Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1]. On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a Petition for Certification Election among the rank and file members employed by ICMC The latter opposed the petition on the ground that it is an international organization registered with the United Nations and, hence, enjoys diplomatic immunity. On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction. On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision and ordered the immediate conduct of a certification election. At that time, ICMC's request for recognition as a specialized agency was still pending with the Department of Foreign Affairs (DEFORAF). Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra. ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly granted but the same was denied by respondent BLR Director who, again, ordered the immediate conduct of a preelection conference. ICMC's two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated ICMC's diplomatic immunity. Thus, on 24 November 1988, ICMC filed the present Petition for C ertiorari with Preliminary Injunction assailing the BLR Order. On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification election.

On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of Appeals, filed a Motion for Intervention alleging that, as the highest executive department with the competence and authority to act on matters involving diplomatic immunity and privileges, and tasked with the conduct of Philippine diplomatic and consular relations with foreign governments and UN organizations, it has a legal interest in the outcome of this case. Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention. On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by the parties, which has been complied with. As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC extends to immunity from the application of Philippine labor laws. ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares that the Philippines adopts the generally accepted principles of international law as part of the law of the land. Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the DEFORAF determination that the BLR Order for a certification election among the ICMC employees is violative of the diplomatic immunity of said organization. Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, i bid. In addition, she contends that a certification election is not a litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit against ICMC its property, funds or assets, but is the sole concern of the workers themselves. B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case). Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case pending with the Second Division, upon manifestation by the Solicitor General that both cases involve similar issues. The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller Foundations signed a Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic, tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting "basic research on the rice plant, on all phases of rice production, management,

distribution and utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-growing areas through improvement in quality and quantity of rice." Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities of an international organization. The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI. On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the Department of Labor and Employment (DOLE). IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization and granting it immunity from all civil, criminal and administrative proceedings under Philippine laws. On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and dismissed the Petition for Direct Certification. On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's Order and authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director relied on Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration sought by IRRI was denied. On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed the Petition for Certification Election, and held that the grant of specialized agency status by the Philippine Government to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in part as follows: Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and immunities of an international organization is clear and explicit. It provides in categorical terms that: Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar as immunity has been expressly waived by the Director-General of the Institution or his authorized representative. Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena, orders, decisions or proceedings ordered by any court or administrative or quasi-judicial agency are enforceable as against the Institute. In the case at bar there was no such waiver made by the Director-General of the Institute. Indeed, the Institute, at the very first opportunity already

vehemently questioned the jurisdiction of this Department by filing an ex-parte motion to dismiss the case. Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of Labor in upholding IRRI's diplomatic immunity. The Third Division, to which the case was originally assigned, required the respondents to comment on the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not adopting as his own" the decision of the BLR Director in the ICMC Case as well as the Comment of the Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14 August 1990. Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused from filing a comment "it appearing that in the earlier case of International Catholic Migration Commission v. Hon. Pura Calleja , G.R. No. 85750. the Office of the Solicitor General had sustained the stand of Director Calleja on the very same issue now before it, which position has been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The Court acceded to the Solicitor General's prayer. The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in dismissing the Petition for Certification Election filed by Kapisanan. Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional right to form trade unions for the purpose of collective bargaining as enshrined in the 1987 Constitution. A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of a certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final and unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal. On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the Bureau of Labor Relations in cases involving certification election orders. III Findings in Both Cases. There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI. Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have a status "similar to that of a specialized agency."

Article III, Sections 4 and 5 of the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly provides: Art. III, Section 4. The specialized agencies, their property and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of legal process except insofar as in any particular case they have expressly waived their immunity. It is, however, understood that no waiver of immunity shall extend to any measure of execution. Sec. 5. The premises of the specialized agencies shall be inviolable. The property and assets of the specialized agencies, wherever located and by whomsoever held shall be immune from search, requisition, confiscation, expropriation and any other form of interference, whether by executive, administrative, judicial or legislative action. (Emphasis supplied). IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus: Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar as that immunity has been expressly waived by the Director-General of the Institute or his authorized representatives. Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification Election within ICMC violates the diplomatic immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this particular instance." The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and IRRI enjoy immunities accorded to international organizations, which determination has been held to be a political question conclusive upon the Courts in order not to embarrass a political department of Government. It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity is essentially a political question and courts should refuse to look beyond a determination by the executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government as in the case at bar, it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the government . . . or other officer acting under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the government in conducting

foreign relations, it is accepted doctrine that in such cases the judicial department of (this) government follows the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction. 3 A brief look into the nature of international organizations and specialized agencies is in order. The term "international organization" is generally used to describe an organization set up by agreement between two or more states. 4 Under contemporary international law, such organizations are endowed with some degree of international legal personality 5 such that they are capable of exercising specific rights, duties and powers. 6 They are organized mainly as a means for conducting general international business in which the member states have an interest. 7 The United Nations, for instance, is an international organization dedicated to the propagation of world peace. "Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles 57 8 and 63 9 of the Charter of the United Nations: The Charter, while it invests the United Nations with the general task of promoting progress and international cooperation in economic, social, health, cultural, educational and related matters, contemplates that these tasks will be mainly fulfilled not by organs of the United Nations itself but by autonomous international organizations established by inter-governmental agreements outside the United Nations. There are now many such international agencies having functions in many different fields, e.g. in posts, telecommunications, railways, canals, rivers, sea transport, civil aviation, meteorology, atomic energy, finance, trade, education and culture, health and refugees. Some are virtually world-wide in their membership, some are regional or otherwise limited in their membership. The Charter provides that those agencies which have "wide international responsibilities" are to be brought into relationship with the United Nations by agreements entered into between them and the Economic and Social Council, are then to be known as "specialized agencies." 10 The rapid growth of international organizations under contemporary international law has paved the way for the development of the concept of international immunities. It is now usual for the constitutions of international organizations to contain provisions conferring certain immunities on the organizations themselves, representatives of their member states and persons acting on behalf of the organizations. A series of conventions, agreements and protocols defining the immunities of various international organizations in relation to their members generally are now widely in force; . . . 11 There are basically three propositions underlying the grant of international immunities to international organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which protects them against control or interference by any one government in the performance of functions for the effective discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned

are represented; 2) no country should derive any national financial advantage by levying fiscal charges on common international funds; and 3) the international organization should, as a collectivity of States members, be accorded the facilities for the conduct of its official business customarily extended to each other by its individual member States. 12 The theory behind all three propositions is said to be essentially institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned. The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member States of the organization, and to ensure the unhampered performance of their functions. ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan. For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded. Thus: Art. IV. Cooperation with Government Authorities . 1. The Commission shall cooperate at all times with the appropriate authorities of the Government to ensure the observance of Philippine laws, rules and regulations, facilitate the proper administration of justice and prevent the occurrences of any abuse of the privileges and immunities granted its officials and alien employees in Article III of this Agreement to the Commission. 2. In the event that the Government determines that there has been an abuse of the privileges and immunities granted under this Agreement, consultations shall be held between the Government and the Commission to determine whether any such abuse has occurred and, if so, the Government shall withdraw the privileges and immunities granted the Commission and its officials. Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been organized a forum for better managementemployee relationship as evidenced by the formation of the Council of IRRI

Employees and Management (CIEM) wherein "both management and employees were and still are represented for purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The existence of this Union factually and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges and immunities of an international organization, deprives its employees of the right to self-organization. The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It could tugger off a series of events in the collective bargaining process together with related incidents and/or concerted activities, which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and administrative proceedings." The eventuality of Court litigation is neither remote and from which international organizations are precisely shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international Organizations. "The immunity covers the organization concerned, its property and its assets. It is equally applicable to proceedings in personam and proceedings in rem." 18 We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls attention to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a six-month probationary employment), the Court is now estopped from passing upon the question of DOLE jurisdiction petition over ICMC. We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC in that case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was tacitly recognized as enjoying such immunity. Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration filed by IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in certification election cases either from the order or the results of the election itself, was already in effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law provides: Art. 259. Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided within 15 calendar days (Emphasis supplied).

En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the executive branch of government have been rectified and the resultant embarrassment to the Philippine Government in the eyes of the international community now, hopefully, effaced. WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations for certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT. In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the Secretary of Labor and Employment in dismissing the Petition for Certification Election. No pronouncement as to costs. G.R. No. 107610 November 25, 1994 CRUZVALE, INC., petitioner, vs. HON. BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER ANGELI M. TUYAY AND UNION OF FILIPINO WORKERS (UFW), respondents. Soo, Gutierrez, Leogardo & Lee for petitioner. QUIASON, J.: This is a petition for certiorari under Rule 65 of the Revised Rules of Court, with prayer for a writ of preliminary injunction or temporary restraining order, to reverse and set aside the Decision dated September 25, 1992 of respondent Undersecretary of Labor and Employment and his Order dated October 13, 1992 in OS-MA-A-11-33491. I On July 23, 1991, private respondent, a labor union, filed with the Department of Labor and Employment (DOLE), Regional Office No. IV, a petition for certification election among the regular rank-and-file workers of petitioner, docketed as Case No. RO-400-9107-RU-0107. On August 27, 1991, petitioner filed its comment to the petition for certification election. It sought the denial of the petition on the following grounds: (a) That no charter certificate evidencing the organization of a local union therein was attached to the petition or submitted to the DOLE at the time the petition was filed; (b) That the respondent Union has not presented any proof that it is a legitimate labor organization; and

(c) That the Regional Office No. IV of the DOLE has no jurisdiction over the petition since petitioner Company's place of business is located at Cubao, Quezon City, which is outside the jurisdiction of the said Regional Office. Consequently, it is the National Capital Region or NCR of the DOLE which has jurisdiction over said petition (Rollo, p. 7). On September 27, 1991, respondent Med-Arbiter rendered a decision in favor of private respondent, pertinent portion of which reads as follows: Anent the first issue on the status of the petitioner, it is established that the petitioner is a legitimate organization with Dole Registration Certificate No. 11106 LC (FED) and has a local chapter in the respondent's company located at Cainta, Rizal. The existence of a local union is likewise undisputed as the same is evidenced by Charter Certificate No. 82 issued to it by the petitioner, United Filipino Workers, and submitted to this Office which automatically forms part of the records of this case. As regards the second and third issues on whether or not the herein petition is duly filed or not, the allegation of the respondent that the same is defective in form and substance since no charter certificate and signatories were attached thereto at the time of filing of this petition is unmeritorious and without legal basis. The respondent is an unorganized establishment which is governed by Article 257 of the Labor Code, as amended by R.A. No. 6715, which read as follows: Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization (Rollo, pp. 74-75). Petitioner appealed the said order to the DOLE. The latter, thru respondent Undersecretary, upheld the order of respondent Med-Arbiter. Not satisfied with the decision of the DOLE, petitioner filed the instant petition and assigned the following errors: 1 RESPONDENT UNDERSECRETARY GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OF JURISDICTION IN AFFIRMING A PATENTLY NULL AND VOID DECISION OF THE MED-ARBITER HOLDING THAT THE PETITION FOR CERTIFICATION ELECTION WAS FILED BY A LEGITIMATE LABOR ORGANIZATION. 2

RESPONDENT UNDERSECRETARY GRAVELY ABUSED HIS DISCRETION AND COMMITTED A SERIOUS LEGAL ERROR IN LIMITING THE CERTIFICATION ELECTION TO PETITIONER'S EMPLOYEES AT CAINTA, THEREBY DISENFRANCHISING THE OTHER REGULAR RANK-AND-FILE EMPLOYEES OF PETITIONER COMPANY AND INSPITE OF A FINAL ORDER CALLING FOR A CERTIFICATION ELECTION TO BE PARTICIPATED IN BY ALL REGULAR RANK-ANDFILE EMPLOYEES. 3 RESPONDENT UNDERSECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN HE AMENDED OUT OF HIS OWN WILL AND DERIVED A PROVISION OF THE IMPLEMENTING RULES WITHOUT ANY BASIS OR AUTHORITY IN THE LABOR CODE, AS AMENDED. II As to the first assigned error, petitioner avers that private respondent is not a legitimate labor organization, "considering that its local or chapter, at the time said petition was filed, did not undergo the rudiments of registration required under Section 3, Rule II, Book V of the Implementing Rules and Regulations of the Labor Code and the pronouncements made by this Court in Progressive Development Corporation v. Secretary, Department of Labor and Employment (205 SCRA 802) . . ." (Rollo, pp. 13-14). The Med-Arbiter found that private respondent was issued Certificate of Registration No. 11106 and Charter Certificate No. 82. Findings of fact of labor officials are generally conclusive and binding upon this Court when supported by substantial evidence (Five J Taxi v. National Labor Relations Commission, 212 SCRA 225 [1992]). Progressive Development Corporation, (supra.) is inappropriate to the case at bench. Thereat, the union failed to show that it had complied with the statutory requirements of Section 3, Rule II, Book V of the Omnibus Rules Implementing the Labor Code. The copy of the constitution and by-laws and list of officers submitted to the Bureau of Labor Relations by the union were not certified under oath by the union secretary. As to the second assigned error, petitioner claims that respondent Undersecretary should not have limited the certification election to petitioner's employees at the garment factory in Cainta but should have also covered those employed in the cinema business. We agree with the following observation made by respondent Undersecretary in his Decision dated September 25, 1992: As regards the question on the composition of the bargaining unit, we stress once more that the call for the conduct of election covers all the regular rank-and-file employees of Cruzvale, Inc. at its garment manufacturing corporation. The use of the pronoun

"all" in our decision dated 16 December 1991 refers to all aforementioned employees at the garment manufacturing operation based on the finding that they were the ones sought to be represented by the petitioner as clearly reflected on the face of the petition and as embodied in the Order of the Med-Arbiter dated 24 April 1992 which was affirmed by this Office on appeal. Moreover, as stated in the questioned Decision the employees at the Cinema operation and those at the garment manufacturing operation do not share commonality of interest as the former clearly perform work entirely different from that of the latter . Thus, their separation into two (2) distinct bargaining units is proper. This is in accordance with the decision of the Supreme Court in the case of Belyca Corporation v. Dir. Pura Ferrer-Calleja, et al., G.R. No. 77395, 26 November 1988 (Rollo, p. 42; Emphasis supplied). As to the third assigned error, petitioner contends that the petition for certification election should have been filed with the regional office which has jurisdiction over the principal office of the employer in accordance with Section 1, Rule V, Book V of the Omnibus Rules Implementing the Labor Code (Rollo, p. 27). Said section provides: Where to file. A petition for certification election shall be filed with the Regional Office which has jurisdiction over the principal office of the Employer. The petition shall be in writing and under oath (Emphasis supplied). The word "jurisdiction" as used in said provision refers to the venue where the petition for certification must be filed. Unlike jurisdiction, which implies the power of the court to decide a case, venue merely refers to the place where the action shall be brought (Sulo ng Bayan, Inc. v. Araneta, Inc., 72 SCRA 347 [1976]). Venue touches more the convenience of the parties rather than the substance of the case (Consolidated Bank v. Intermediate Appellate Court, 198 SCRA 34 [1991]). Section 1, Rule V, Book V of the Omnibus Rules Implementing the Labor Code refers only to cases where the place of work of the employees and the place of the principal office of the employer are within the same territorial jurisdiction of the Regional Office where the petition for certification election is filed. The said provision does not apply to the filing of petitions for certification election where the place of work of the employees and the place of principal office of the employer are located within the territorial jurisdictions of different regional offices. We assume that in the drafting of the Omnibus Rules, the Secretary of Labor and Employment took into consideration the fact that there are many companies with factories located in places different from places where the corporate offices are located. The worker, being the economically-disadvantaged party whether as complainant, petitioner or respondent, as the case may be, the nearest governmental machinery to settle a labor dispute must be placed at his immediate disposal and the employer must in no case be allowed a choice in favor of another competent agency sitting in another place to the inconvenience of the worker (Nestle Philippines, Inc. v. National Labor Relations Commission, 209 SCRA 834 [1992]).

Petitioner has not shown how it will be prejudiced by the hearing on the petition for certification election before the Regional Office No. IV, which has its offices in Quezon City, the same city where the principal place of business of petitioner is located. Petitioner is, therefore, being unreasonable in demanding that the petition for certification election be filed with the National Capital Region Office, which holds offices in Manila. Unlike in the Rules governing the procedure before Regional Offices, the New Rules of Procedure of the National Labor Relations Commission prescribes that all cases in which labor arbiters have jurisdiction should be filed in the branch office which has territorial jurisdiction over the "workplace of the complainant/petitioner" (Rule IV, Sec. 1[a]). The NLRC Rules defines the workplace as follows: For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. . . . The Omnibus Rules Implementing the Labor Code has no provision as to when an objection to improper venue may be raised. The Med-Arbiter ruled that where the employer had appeared twice at the hearing of the petition for certification election without questioning the venue, said employer was barred from raising the issue in the subsequent proceedings. He observed: . . . This practice of deliberately delaying the legal proceedings cannot be countenanced any further, otherwise, the ends of justice will forever be defeated. We don't see any reason for the respondent to delay as it did, the proceedings of the case only to assail later on the jurisdiction of the office. This issue could have been brought up or objected to during the initial hearing (Rollo, p. 77). The stance of the Med-Arbiter, that the question of the venue in representation cases should be raised at the first hearing, was accepted by respondent Undersecretary. We are not prepared to say that said administrative Officials have gravely abused their discretion. WHEREFORE, the petition is DISMISSED and the temporary restraining order is LIFTED. G.R. Nos. 94929-30 March 18, 1992 PORT WORKERS UNION OF THE PHILIPPINES (PWUP), petitioner, vs. THE HONORABLE UNDERSECRETARY OF LABOR AND EMPLOYMENT BIENVENIDO E. LAGUESMA, ATTY. ANASTACIO L. BACTIN, MED-ARBITER NCR-DOLE, Public Respondents; INTERNATIONAL CONTAINER TERMINAL SERVICES, INC., (ICTSI) and ASSOCIATED PORT CHECKERS AND WORKERS UNION (APCWU), Private Respondents; SANDIGAN NG MANGGAGAWA SA DAUNGAN (SAMADA) and PORT EMPLOYEES ASSOCIATION AND LABOR UNION (PEALU), Nominal Private Respondents, respondents.

CRUZ, J.: There was muffled excitement among the workers of the International Container Terminal Services, Inc. (ICTSI) because its collective bargaining agreement with private respondents Associate Port Checkers and Workers Union (APCWU), the incumbent union, was due to expire on April 14, 1990. Other unions were seeking to represent the laborers in the negotiation of the next CBA and were already plotting their moves. The first challenge to APCWU was hurled on March 14, 1990, when the Sandigan ng Manggagawa sa Daungan (SAMADA) filed a petition for certification election. The consent signatures of at least 25% of the employees in the bargaining unit were submitted on March 26, 1990, or eleven days after the petition. On April 2, 1990, herein petitioner Port Workers Union of the Philippines (PWUP) filed a petition for intervention. Still another petition for certification election was filed by the Port Employees Association and Labor Union (PEALU), on April 6, 1990. The consent signatures were submitted on May 11, 1990, or thirty-five days after the filing of the petition. The petitions of SAMADA and PEALU were consolidated for joint decision. On April 26, 1990, APCWU filed a motion to dismiss them on the ground that they did not comply with the requirement set forth in Section 6, Rule V, Book V of the Implementing Rules, quoted in part as follows: In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned through a verified petition by a legitimate labor organization, the Med-Arbiter shall immediately order the certification election by secret ballot if the petition is filed during the last sixty (60) days of the collective bargaining agreement and supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The twenty-five percent (25%) requirement shall be satisfied upon the filing of the petition, otherwise the petition shall be dismissed. (Emphasis supplied.) Specifically, APCWU faulted both petitions for non-compliance with the requirement for the 25% consent signatures at the time of filing. This contention was upheld by the Med-Arbiter in an order dated June 5, 1990, dismissing the consolidated petitions. 1 PWUP appealed to the Secretary of Labor on June 28, 1990, arguing that Article 256 of the Labor Code did not require the written consent to be submitted simultaneously with the petition for certification election. The principal petitioners did not appeal. On August 21, 1990, DOLE Undersecretary Bienvenido Laguesma affirmed the order of the Med-Arbiter and dismissed PWUP's appeal. 2 Thereafter, ICTSI and APCWU resumed negotiations for a new collective bargaining agreement, which was concluded on September 28, 1990. This was ratified on

October 7, 1990, by a majority of the workers in the bargaining unit, i.e., 910 out of the 1,223 members, and subsequently registered with the DOLE. PWUP is now before us, claiming grave abuse of discretion on the part of the public respondent in the application of Article 256 of the Labor Code. The article provides in part as follows: Art. 256. Representation issue in organized establishments. In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and Employment within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five (25%) percent of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. . . . The petitioner argues that under this article, the Med-Arbiter should automatically order election by secret ballot when the petition is supported by at least 25% of all employees in the bargaining unit. SAMADA and PEALU substantially complied with the law when they submitted the required consent signatures several days after filing the petition. The petitioner complains that the dismissal of the petitions for certification election, including its own petition for intervention, had the effect of indirectly certifying APCWU as the sole and exclusive bargaining representative of the ICTSI employees. Private respondent ICTSI maintains that the dismissal was based on Article 256 of the Labor Code as implemented by Section 6, Rule V, Book V of the Implementing Rules, quoted above. Moreover, under Section 10, Rule V, Book V of the Implementing Rules, decisions of the Secretary in certification election cases shall be final and unappealable. ICTSI also cites the following ruling of this Court in Tupas v. Inciong:
3

We find no merit in the petition. As observed by the Solicitor General, while the petition of TUPAS for a certification election may have the written support of 30 per cent of all the workers of the bargaining unit, it is also an undisputed fact that UMI (the rival union of TUPAS) has a clear majority of the said workers, as shown by the fact that 499 workers out of the total working force of 641 have not only ratified the collective bargaining agreement concluded between UMI and LUSTEVECO, but also affirmed their membership in UMI so that there is no more need for holding a certification election. (Emphasis supplied.) For its part, APCWU questions PWUP's personality in these proceedings in view of the lack of consent signatures in its petition, and argues as well that the petitioner has no authority to represent SAMADA or PEALU, which had not appealed. The private respondent also invokes Tupas and maintains that the ratification of the new CBA by the majority of the workers was an affirmation of their membership in the union that negotiated that agreement.

In his own Comment, the Solicitor General agrees with the petitioner that there has been substantial compliance with the requirements of the law. He submits that Article 256 should be liberally interpreted pursuant to Article 4 of the Labor Code, stating as follows: Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code including its implementing rules and regulations, shall be resolved in favor of labor. The Court has deliberated on the arguments of the parties in their respective pleadings and finds for the petitioner. We have held that pursuant to the constitutional provision guaranteeing workers the right to self-organization and collective bargaining, "the constant and unwavering policy of this Court" has been "to require a certification election as the best means of ascertaining which labor organization should be the collective bargaining representative." 4 The certification election is the most democratic and expeditious method by which the laborers can freely determine the union that shall act as their representative in their dealings with the establishment where they are working. 5 As we stressed in Belyca Corporation vs. Ferrer-Calleja , 6 the holding of a certification election is a statutory policy that should not be circumvented. This Court also held in Western Agusan Workers Union-Local 101 of the United Lumber and General Workers of the Philippines vs. Trajano: 7 . . . it has long been settled that the policy of the Labor Code is indisputably partial to the holding of a certification election so as to arrive in a manner definitive and certain concerning the choice of the labor organization to represent the workers in a collective bargaining unit. Conformably to said basic concept, this Court recognized that the Bureau of Labor Relations in the exercise of sound discretion, may order a certification election notwithstanding the failure to meet the 30% requirement. (Scout Ramon V. Albano Memorial College v. Noriel, 85 SCRA 494 [1978]; Vicmico Industrial Wokers Asso. v. Noriel, 131 SCRA 569 [1984]) In line with the policy, we feel that the administrative rule requiring the simultaneous submission of the 25% consent signatures upon the filing of petition for certification election should not be strictly applied to frustrate the determination of the legitimate representative of the workers. Significantly, the requirement in the rule is not found in Article 256, the law it seeks to implement. This is all the more reason why the regulation should at best be given only a directory effect. Accordingly, we hold that the mere filing of a petition for certification election within the freedom period is sufficient basis for the issuance of an order for the holding of a certification election, 8 subject to the submission of the consent signatures within a reasonable period from such filing. This interpretation is consonant with Philippine Association of Free Labor Unions v. Bureau of Labor Relations, 9 where we declared:

. . . even conceding that the statutory requirement of 30% of the labor force asking for a certification election had not been strictly complied with, respondent Director is still empowered to order that it be held precisely for the purpose of ascertaining which (of the contending labor organizations) shall be the exclusive collective bargaining representative. (National Mines and Allied Workers Union v. Luna, et al., 83 SCRA 607) It is not denied that the petition to intervene filed by PWUP did not carry the 25% consent signatures, but that the requirement is in fact not applicable to a petition in intervention. We so held in PAFLU v. Ferrer-Calleja thus: 10 It is crystal clear from the said provisions that the requisite written consent of at least 20% of the workers in the bargaining unit applies to petitioners for certification election only and not to motions for intervention. . . . As long as the motion for intervention has been properly and timely filed and the intervention would not cause any injustice to anyone, it should not be denied and this is so even if the eventual purpose of the Motion for Intervention is to participate in the Certification Election. After all, the original applicant had already met the 20% requirement. The contention that the petitioners had no right to represent the principal petitioners which had not appealed the dismissal order is also not acceptable. We repeat that the certification election is not litigation but a mere investigation of a non-adversary character where the rules of procedure are not strictly applied. 11 Technical rules and objections should not hamper the correct ascertainment of the labor union that has the support of confidence of the majority of the workers and is thus entitled to represent them in their dealings with management. The above-quoted decision affirms the right of PWUP to call for the holding of the election although it was initially only an intervenor. That recognition should not be defeated by the circumstance that the other petitioning unions have not seen fit to appeal the dismissal of their petitions even if such dismissal was questionable and is in fact being reversed here. The petition for intervention was viable at the time it was filed because the principal petitions had complied with the requirement for the consent signatures as specified by Article 256. Hence, its intervention should not be disallowed simply because of the withdrawal or failure to appeal of SAMADA and PEALU. It is correct to say that as a matter of strict procedure, a petition for intervention should be deemed automatically dismissed where the principal petition itself fails. However, that technical rule should be allowed to prevent a correct determination of the real representative of the workers in line with their constitutional rights to selforganization and collective bargaining. Regarding the invocation of Inciong by the private respondents, the Court has modified that decision in Associated Labor Unions vs. Calleja , 12 where we held: Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the collective bargaining agreement renders the certification election moot and academic."

This contention finds no basis in law. The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely entered into apparently in an attempt to avoid the holding of a certification election. Deviation from the contract-bar rule is justified only where the need for industrial stability is clearly shown to be imperative. 13 Subject to this singular exception, contracts where the identity of the authorized representative of the workers is in doubt must be rejected in favor of a more certain indication of the will of the workers. As we stated in Philippine Association of Free Labor Union vs. Estrella , 14 any stability that does not establish the type of industrial peace contemplated by the law must be subordinated to the employees' freedom to choose their real representative. The private respondents contend that the overwhelming ratification of the CBA is an affirmation of their membership in the bargaining agent, rendering the representation issue moot and academic and conclusively barring the holding of a certification election thereon. That conclusion does not follow. Even Tupas did not say that the mere ratification of the CBA by the majority of the workers signified their affirmation of membership in the negotiating union. That case required, first, ratification of the CBA, the second, affirmation of membership in the negotiating union. The second requirement has not been established in the case at bar as the record does not show that the majority of the workers, besides ratifying the new CBA, have also formally affiliated with APCWU. Section 4, Rule V, Book V of the Omnibus Rules implementing the Labor Code provides that the representation case shall not be adversely affected by a collective agreement submitted before or during the last 60 days of a subsisting agreement or during the pendency of the representation case. As the new CBA was entered into at the time when the representation case was still pending, it follows that it cannot be recognized as the final agreement between the ICTSI and its workers. On the allegation that the decision of the Secretary of Labor on certification election is final and inappealable, this Court held in San Miguel Corp. v. Secretary of Labor 15 that: It is generally understood that as to administrative agencies exercising quasi-judicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute. (73, C.J.S. 506, note 56). . . . judicial review is proper in case of lack of jurisdiction, grave abuse of discretion. error of law, fraud or collusion (Timbancaya v. Vicente, 82 O.G. 9424; Macatangay v. Secretary of Public Works and Communication, 63 O.G. 11236; Ortua v. Singson Encarnacion, 59 Phil. 440). There was indeed grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondents when they dismissed the petitions for certification election because the consent signatures had not been submitted simultaneously with the petition. The issue of majority representation thus remains

open and awaits settlement. Following the rulings above-quoted, we hereby declare that the newly-concluded CBA cannot constitute a bar to the holding of a certification election. It is possible that the APCWU will prevail in the certification election, in which event the new CBA it concluded with ICTSI will be upheld and recognized. It is also possible that another union will be chosen, in which event it will have to enter into its own negotiations with ICTSI that may result in the adoption of a new CBA. In the meantime, however, the old CBA having expired, it is necessary to lay down the rules regulating the relations of the workers with the management. For this reason, the Court hereby orders that the new CBA concluded by ICTSI and APCWU shall remain effective between the parties, subject to the result and effects of the certification election to be called. The certification election is the best method of determining the will of the workers on the crucial question of who shall represent them in their negotiations with the management for a collective bargaining agreement that will best protect and promote their interests. It is essential that there be no collusion against this objective between an unscrupulous management and a union covertly supporting it while professing its loyalty to labor, or at least that the hopes of labor be not frustrated because of its representation by a union that does not enjoy its approval and support. It is therefore sound policy that any doubt regarding the real representation of the workers be resolved in favor of the holding of the certification election. This is preferable to the suppression of the voice of the workers through the prissy observance of technical rules that will exalt procedure over substantial justice. WHEREFORE, the petition is GRANTED. The challenged order dated August 21, 1990, is REVERSED and SET ASIDE and the public respondent is DIRECTED to schedule and hold certification election among the workers of the International Container Terminal Services, Inc., this to be done with all possible dispatch. No costs. SO ORDERED. G.R. No. 75810 September 9, 1991 KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner, vs. HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS MFG., CO., INC., respondents. Esteban M. Mendoza for petitioner. R E S O LU T I O N NARVASA, J.:p The propriety of holding a certification election is the issue in the special civil action of certiorari at bar. By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor Unions (NAFLU) was declared the exclusive

bargaining representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON). More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for certification election among the employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of the workers at VIRON. NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no collective bargaining agreement had been executed between it and VIRON. NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for election in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as follows: SEC. 3. When to file. In the absence of a collective bargaining agreement submitted in accordance with Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification election may be held within one year from the date of issuance of declaration of a final certification election result. Neither may a representation question be entertained if, before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement. Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This disposition is justified in the Resolution as follows: ... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU slept on its right to bargain collectively with the employer. If a closer look was made on the history of labor management relations in the company, it could be readily seen that the delay in the negotiations for and conclusion of a collective agreement the object of the one-year period could be attributed first, on the exhaustion of all legal remedies in the representation question twice initiated in the company before the

filing of the present petition and second, to management who had been resisting the representations of NAFLU in collective bargaining. The one-year period therefore, should not be applied literally to the present dispute, especially considering that intervenor had to undergo a strike to bring management to the negotiation table. ... KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action. It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of issuance of declaration of a final certification election result' in this case, from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON can have no application to the case at bar. That one-year period-known as the "certification year" during which the certified union is required to negotiate with the employer, and certification election is prohibited 2 has long since expired. Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because, before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent, had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout , in accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted. Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain collectively; 3 but there is no proof that it had taken any action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON. The stark, incontrovertible fact is that from February 27, 1981 when NAFLU was proclaimed the exclusive bargaining representative of all VIRON employees to April 11, 1985 when KAMPIL filed its petition for certification election or a period of more than four (4) years, no collective bargaining agreement was ever executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice. The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for violation of terms and conditions of employment, which was settled by the parties' agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has since been certified for compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however, these activities took place after the

initiation of the certification election case by KAMPIL, and it was grave abuse of discretion to have regarded them as precluding the holding of the certification election thus prayed for. WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent. SO ORDERED. G.R. No. 89609 January 27, 1992 NATION AL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-TUCP, petitioner, -versusHON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents. Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner. Manlapao, Drilon, Ymballa and Chavez for private respondent . MEDIALDEA, J.: This is a petition for certiorari seeking the nullification of the resolution issued by the respondent Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition and directing the conduct of a certification election among the rank and file employees or workers of the Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros Occidental. The antecedent facts giving rise to the controversy at bar are as follows: Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is a legitimate national labor organization duly registered with the Department of Labor and Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as the Director of the Bureau of Labor Relations of the Department of Labor and Employment, while private respondent National Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization duly registered with the Department of Labor and Employment. Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros Occidental employs about five hundred (500) workers during milling season and about three hundred (300) on off-milling season.

On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered into a collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on November 14, 1987. When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its renewal. The CBA was extended for another three (3) years with reservation to negotiate for its amendment, particularly on wage increases, hours of work, and other terms and conditions of employment. However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement. In order to obviate friction and tension, the parties agreed on a suspension to provide a cooling-off period to give them time to evaluate and further study their positions. Hence, a Labor Management Council was set up and convened, with a representative of the Department of Labor and Employment, acting as chairman, to resolve the issues. On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or certification election among the rank and file workers of Dacongcogon. On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the following grounds, to wit: I The Petition was filed out of time; II There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-central. (Rollo, p. 25) On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed. By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private respondent NFSW-FGT-KMU and directed the conduct of certification election among the rank and file workers of Dacongcogon, the dispositive portion of which provides as follows: WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby DENIED. Let therefore a certification election among the rank and file employees/workers of the Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with the following choices: (1) National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP); (2) National Federation of Sugar Workers (NFSW);

(3) No Union. The designated Representation Officer is hereby directed to call the parties for a pre-election conference to thresh out the mechanics of the election and to conduct and supervise the same within twenty (20) days from receipt by the parties of this Order. The latest payroll shall be used to determine the list of qualified voters. SO ORDERED. (Rollo, p. 34) On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging that the Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross incompetence. Hence, private respondent prayed that the order of the Med-Arbiter be set aside and the motion to dismiss be reconsidered. On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the motion for reconsideration and/or appeal be denied for lack of merit. On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution reversing the order of the Med-Arbiter, to wit: WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is hereby set aside and vacated, and a new one issued dismissing the above-entitled petition for being filed out of time. SO ORDERED. (Rollo, p. 46) Hence, this petition raising four (4) issues, to wit: I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING HER RESOLUTION DATED 26 JUNE 1989 REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-ARBITER FELIZARDO SERAPIO. II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT PURA FERRER-CALLEJA IS CONTRARY TO LAW AND JURISPRUDENCE. III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT DIRECTOR PURA FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF THE DACONGCOGON SUGAR & RICE MILLING COMPANY, AND THE HEREIN PETITIONER NACUSIP-TUCP, THEIR LEGAL AND CONSTITUTIONAL RIGHTS. IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER SAID RESOLUTION DATED 26 JUNE 1989 WAS

BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo, p. 2) The controversy boils down to the sole issue of whether or not a petition for certification election may be filed after the 60-day freedom period. Petitioner maintains that respondent Director Calleja committed grave abuse of discretion amounting to excess of jurisdiction in rendering the resolution dated June 26, 1989 setting aside, vacating and reversing the order dated February 8, 1989 of Med-Arbiter Serapio, in the following manner: 1) by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter Felizardo Serapio and in effect dismissing the Petition for Direct or Certification Election of Petitioner NACUSIP-TUCP (Annex "A" hereof) without strong valid, legal and factual basis; 2) by giving a very strict and limited interpretation of the provisions of Section 6, Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as she does, that the Labor Code, being a social legislation, should be liberally interpreted to afford the workers the opportunity to exercise their legitimate legal and constitutional rights to selforganization and to free collective bargaining; 3) by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the effectivity of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over decisions of Med-Arbiters in cases of representation issues or certification elections; 4) by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case of Kapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977; 5) by clearly failing to appreciate the significance (sic) of the fact that for more than four (4) years there has been no certification election involving the rank and file workers of the Company; and, 6) by frustrating the legitimate desire and will of the workers of the Company to determine their sole and exclusive collective bargaining representative through secret balloting. (Rollo, pp. 910) However, the public respondent through the Solicitor General stresses that the petition for certification election was filed out of time. The records of the CBA at the Collective Agreements Division (CAD) of the Bureau of Labor Relations show that the CBA between Dacongcogon and private respondent NFSW-FGT-KMU had expired on November 14, 1987, hence, the petition for certification election was filed too late, that is, a period of more than one (1) year after the CBA expired. The public respondent maintains that Section 6 of the Rules Implementing Executive Order No. 111 commands that the petition for certification election must be filed

within the last sixty (60) days of the CBA and further reiterates and warns that any petition filed outside the 60-day freedom period "shall be dismissed outright." Moreover, Section 3, Rule V, Book V of the Rules Implementing the Labor Code enjoins the filing of a representation question, if before a petition for certification election is filed, a bargaining deadlock to which the bargaining agent is a party is submitted for conciliation or arbitration. Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain the motion for reconsideration interposed by respondent union from the order of the Med-Arbiter directing a certification election. Public respondent contends that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there is as yet no rule or regulation established by the Secretary for the conduct of elections among the rank and file of employer Dacongcogon; (s)econdly, even the mechanics of the election which had to be first laid out, as directed in the Order dated February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by respondent union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent Director after it filed its opposition to respondent union's Motion for Reconsideration (Annex 'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66) We find the petition devoid of merit. A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the rules implementing Executive Order No. 111 provides that: Sec. 6. Procedure . . . In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned by a legitimate labor organization, the MedArbiter shall immediately order the conduct of a certification election if the petition is filed during the last sixty (60) days of the collective bargaining agreement. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The sixty-day freedom period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement for purposes of certification election. xxx xxx xxx The clear mandate of the aforequoted section is that the petition for certification election filed by the petitioner NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day freedom period or a period of more than one (1) year after the CBA expired. It is a rule in this jurisdiction that only a certified collective bargaining agreement i.e., an agreement duly certified by the BLR may serve as a bar to certification elections. (Philippine Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau of

Labor Relations duly certified the November 14, 1984 collective bargaining agreement. Hence, the contract-bar rule as embodied in Section 3, Rule V, Book V of the rules implementing the Labor Code is applicable. This rule simply provides that a petition for certification election or a motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the existence of a collective bargaining agreement except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. (Associated Labor Unions (ALUTUCP) v. Trajano, G.R. No. 77539, April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v. Trajano, G.R. No. L-75321, 20 June 1988, 162 SCRA 318, 322323) Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent NFSW-FGT-KMU and Dacongcogon had not concluded a new CBA, We need only to stress what was held in the case of Lopez Sugar Corporation v. Federation of Free Workers, Philippine Labor Union Association (G.R. No. 75700-01, 30 August 1990, 189 SCRA 179, 191) quoting Article 253 of the Labor Code that "(i)t shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties." Despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract bar rule still applies. Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was extended for another three (3) years and that the deadlock was submitted to the Labor Management Council. All premises considered, the Court is convinced that the respondent Director of the Bureau of Labor Relations did not commit grave abuse of discretion in reversing the order of the Med-Arbiter. ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau of Labor Relations is hereby AFFIRMED. SO ORDERED. G.R. No. 96425 February 4, 1992 PROGRESSIVE DEVELOPMENT CORPORATION, petitioner, -versusTHE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO DELA CRUZ and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-TUCP, respondents. Beltran, Bacungan & Candoy for petitioner. Jimenez & Associates co-counsel for petitioner.

GUTIERREZ, JR., J.: The controversy in this case centers on the requirements before a local or chapter of a federation may file a petition for certification election and be certified as the sole and exclusive bargaining agent of the petitioner's employees. Petitioner Progressive Development Corporation (PDC) filed this petition for certiorari to set aside the following: 1) Resolution dated September 5, 1990, issued by respondent Med-Arbiter Edgardo dela Cruz, directing the holding of the certification election among the regular rankand-file employees of PDC: 2) Order dated October 12, 1990, issued by the respondent Secretary of Labor and Employment, denying PDC's appeal; and 3) Order dated November 12, 1990, also issued by the respondent Secretary, denying the petitioner's Motion for Reconsideration. On June 19, 1990, respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP (hereinafter referred to as Kilusan) filed with the Department of Labor and Employment (DOLE) a petition for certification election among the rank-and-file employees of the petitioner alleging that it is a legitimate labor federation and its local chapter, Progressive Development Employees Union, was issued charter certificate No. 90-6-1-153. Kilusan claimed that there was no existing collective bargaining agreement and that no other legitimate labor organization existed in the bargaining unit. Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the local union failed to comply with Rule II Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires the submission of: (a) the constitution and by-laws; (b) names, addresses and list of officers and/or members; and (c) books of accounts. On July 16 , 1990, respondent Kilusan submitted a rejoinder to PDC's motion to dismiss claiming that it had submitted the necessary documentary requirements for registration, such as the constitution and by-laws of the local union, and the list of officers/members with their addresses. Kilusan further averred that no books of accounts could be submitted as the local union was only recently organized. In its "Supplemental Position Paper" dated September 3, 1990, the petitioner insisted that upon verification with the Bureau of Labor Relations (BLR), it found that the alleged minutes of the organizational meeting was unauthenticated, the list of members did not bear the corresponding signatures of the purported members, and the constitution and by-laws did not bear the signature of the members and was not duly subscribed. It argued that the private respondent therefore failed to substantially comply with the registration requirements provided by the rules. Additionally, it prayed that Med-Arbiter Edgardo dela Cruz inhibit himself from handling the case for the reason that he allegedly had prejudged the same. In his September 5, 1990 resolution, Med Arbiter dela Cruz held that there was substantial compliance with the requirements for the formation of the chapter. He further stated that mere issuance of the charter certificate by the federation was

sufficient compliance with the rules. Considering that the establishment was unorganized, he maintained that a certification election should be conducted to resolve the question of representation. Treating the motion for reconsideration filed by the PDC as an appeal to the Office of the Secretary, Undersecretary Laguesma held that the same was merely a "reiteration of the issues already ventilated in the proceedings before the MedArbiter, specifically, the matter involving the formal organization of the chapter." (Rollo, p. 20) PDC's motion for reconsideration from the aforementioned ruling was likewise denied. Hence, this petition. In an order dated February 25, 1991, the Court resolved to issue a temporary restraining order enjoining the public respondents from carrying out the assailed resolution and orders or from proceeding with the certification election. ( Rollo, pp. 37-39) It is the petitioner's contention that a labor organization (such as the Kilusan) may not validly invest the status of legitimacy upon a local or chapter through the mere expedient of issuing a charter certificate and submitting such certificate to the BLR (Rollo, p. 85) Petitioner PDC posits that such local or chapter must at the same time comply with the requirement of submission of duly subscribed constitution and bylaws, list of officers and books of accounts. (Rollo, p. 35) PDC points out that the constitution and by-laws and list of officers submitted were not duly subscribed. Likewise, the petitioner claims that the mere filing of the aforementioned documents is insufficient; that there must be due recognition or acknowledgment accorded to the local or chapter by BLR through a certificate of registration or any communication emanating from it. (Rollo, p. 86) The Solicitor General, in behalf of the public respondent, avers that there was a substantial compliance with the requirements for the formation of a chapter. Moreover, he invokes Article 257 of the Labor Code which mandates the automatic conduct by the Med-Arbiter of a certification election in any establishment where there is no certified bargaining agreement. The Court has repeatedly stressed that the holding of a certification election is based on a statutory policy that cannot be circumvented. (Airtime Specialists, Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation v. Ferrer-Calleja, 168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions, 134 SCRA 82 [1986]). The workers must be allowed to freely express their choice in a determination where everything is open to their sound judgment and the possibility of fraud and misrepresentation is eliminated. But while Article 257 cited by the Solicitor General directs the automatic conduct of a certification election in an unorganized establishment, it also requires that the petition for certification election must be filed by a legitimate labor organization. Article 242 enumerates the exclusive rights of a legitimate labor organization among which is the right to be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining. Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of the Implementing Rules likewise defines a legitimate labor organization as "any labor organization duly

registered with the DOLE and includes any branch, local or affiliate thereof. (Emphasis supplied) The question that now arises is: when does a branch, local or affiliate of a federation become a legitimate labor organization? Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 234 (Requirements of Registration): Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty-pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meeting and the list of the workers who participated in such meetings; (c) The names of all its members comprising at least twenty 20% percent of all the employees in the bargaining unit where it seek to operate; (d) If the applicant has been in existence for one or more years, copies , of its annual financial reports; and (e) Four copies of the constitution and by-laws of the applicant union, the minutes of its adoption or ratification and the list of the members who participated in it. And under Article 235 (Action on Application) The Bureau shall act on all applications for registration within thirty (30) days from filing. All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president. Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be signed by at least twenty percent (20%) of the employees in the appropriate bargaining unit and be accompanied by a sworn statement of the applicant union that there is no certified bargaining agent or, where there is an existing collective bargaining agreement duly submitted to the DOLE, that the application is filed during the last sixty (60) days of the agreement. The respondent Kilusan questions the requirements as too stringent in their application but the purpose of the law in prescribing these requisites must be

underscored. Thus, in Philippine Association of Free Labor Unions v. Secretary of Labor, 27 SCRA 40 (1969), the Court declared: The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in Paragraph (b) of said section is not a limitation to the right of assembly or association, which may be exercised with or without said registration. The latter is merely a condition sine qua non for the acquisition of legal personality by the labor organizations, associations or unions and the possession of the "rights and privileges granted by law to legitimate labor organizations." The Constitution does not guarantee these rights and the privileges, much less said personality, which are mere statutory creations, for the possession and exercise of which registration is required to protect both labor and the public against abuses, fraud or impostors who pose as organizers, although not truly accredited agents of the union they purport to represent . Such requirement is a valid exercise of the police power, because the activities in which labor organizations, associations and unions of workers are engaged affect public interest, which should be protected. Furthermore, the obligation to submit financial statements, as a condition for the non-cancellation of a certificate of registration, is a reasonable regulation for the benefit of the members of the organization, considering that the same generally solicits funds or membership, as well as oftentimes collects, on behalf of its members, huge amounts of money due to them or to the organization. (Emphasis supplied) But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned requirements for registration are no longer required. The provisions governing union affiliation are found in Rule II, Section 3, Book V of the Implementing Rules, the relevant portions of which are cited below: Sec. 3. Union affiliation; direct membership with national union. An affiliate of a labor federation or national union may be a local or chapter thereof or an independently registered union. a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such charter certificate. b) An independently registered union shall be considered an affiliate of a labor federation or national union after submission to the Bureau of the contract or agreement of affiliation within thirty (30) days after its execution. xxx xxx xxx e) The local or chapter of a labor federation or national union shall have and maintain a constitution and by laws, set of officers and books and accounts. For reporting purposes, the procedure

governing the reporting of independently registered unions, federations or national unions shall be observed. Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration while paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in the foregoing differentiation is the fact that a local or chapter need not be independently registered. By force of law (in this case, Article 212[h]); such local or chapter becomes a legitimate labor organization upon compliance with the aforementioned provisions of Section 3. Thus, several requirements that are otherwise required for union registration are omitted, to wit: (1) The requirement that the application for registration must be signed by at least 20% of the employees in the appropriate bargaining unit; 2) The submission of officers' addresses, principal address of the labor organization, the minutes of organizational meetings and the list of the workers who participated in such meetings; 3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list of the members who participated in it. Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a registered federation or national union is to encourage the affiliation of a local union with the federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor. The petitioner maintains that the documentary requirements prescribed in Section 3(c), namely: the constitution and by-laws, set of officers and books of accounts, must follow the requirements of law. Petitioner PDC calls for the similar application of the requirement for registration in Article 235 that all requisite documents and papers be certified under oath by the secretary or the treasurer of the organization and attested to by the president. In the case at bar, the constitution and by-laws and list of officers submitted in the BLR, while attested to by the chapter's president, were not certified under oath by the secretary. Does such defect warrant the withholding of the status of legitimacy to the local or chapter? In the case of union registration, the rationale for requiring that the submitted documents and papers be certified under oath by the secretary or treasurer, as the case may be, and attested to by president is apparent. The submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for approval of the application for registration. Upon approval, the labor union acquires legal personality and is entitled to all the rights and privileges granted by law to a legitimate labor organization. The employer naturally needs assurance that the union it is dealing with is a bona fide organization, one which has not submitted false statements or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements will in a marked degree allay these apprehensions of management. Not only is the issuance of any false statement and misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for a criminal charge of perjury.

The certification and attestation requirements are preventive measures against the commission of fraud. They likewise afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to use the union for dubious ends. In the case of the union affiliation with a federation, the documentary requirements are found in Rule II, Section 3(e), Book V of the Implementing Rules, which we again quote as follows: (c) The local chapter of a labor federation or national union shall have and maintain a constitution and by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed . (Emphasis supplied) Since the "procedure governing the reporting of independently registered unions" refers to the certification and attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of officers and books of accounts submitted by the local and chapter must likewise comply with these requirements. The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the case of union affiliation. Moreover, there is greater reason to exact compliance with the certification and attestation requirements because, as previously mentioned, several requirements applicable to independent union registration are no longer required in the case of formation of a local or chapter. The policy of the law in conferring greater bargaining power upon labor unions must be balanced with the policy of providing preventive measures against the commission of fraud. A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the BLR: 1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and 2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president. Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor organization. In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal to its acquisition of a legitimate status. We observe that, as borne out by the facts in this case, the formation of a local or chapter becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for wholehearted voluntariness which is basic to free unionism. The records show that on June 16, 1990, Kilusan met with several employees of the petitioner. Excerpts of the "Minutes of the

Organizational/General Membership Meeting of Progressive Development Employees Union (PDEU) Kilusan," are quoted below: The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for organization by explaining to the general membership the importance of joining the union. He explained to the membership why they should join a union, and briefly explained the ideology of the Pambansang Kilusan ng PaggawaTUCP as a democratically based organization and then read the proposed Constitution and By-Laws, after which said Constitution and By-Laws was duly and unanimously ratified after some clarification. Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the COMELEC in holding the organizational election of officers of the union. Bro. Jose Parungao, officially opened the table for nomination of candidates after which the election of officers followed by secret balloting and the following were the duly elected officers. (Original Record, p. 25) The foregoing shows that Kilusan took the initiative and encouraged the formation of a union which automatically became its chapter. On June 18, 1990, Kilusan issued a charter certificate in favor of PDEU-KILUSAN (Records, page 1). It can be seen that Kilusan was moving very fast. On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition for certification election (Records, pages 2 and 3) accompanied by a copy each of the charter certificate, constitution and by-laws and minutes of the organizational meeting. Had the local union filed an application for registration, the petition for certification election could not have been immediately filed. The applicant union must firstly comply with the "20% signature" requirement and all the other requisites enumerated in Article 234. Moreover, since under Article 235 the BLR shall act on any application for registration within thirty (30) days from its filing, the likelihood is remote that, assuming the union complied with all the requirements, the application would be approved on the same day it was filed. We are not saying that the scheme used by the respondents is per se illegal for precisely, the law allows such strategy. It is not this Court's function to augment the requirements prescribed by law in order to make them wiser or to allow greater protection to the workers and even their employer. Our only recourse is, as earlier discussed, to exact strict compliance with what the law provides as requisites for local or chapter formation. It may likewise be argued that it was Kilusan (the mother union) and not the local union which filed the petition for certification election and, being a legitimate labor organization, Kilusan has the personality to file such petition. At this juncture, it is important to clarify the relationship between the mother union and the local union. In the case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court held that the mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to serve the common interest of all

its members subject only to the restraints imposed by the constitution and by-laws of the association. Thus, where as in this case the petition for certification election was filed by the federation which is merely an agent, the petition is deemed to be filed by the chapter, the principal, which must be a legitimate labor organization. The chapter cannot merely rely on the legitimate status of the mother union. The Court's conclusion should not be misconstrued as impairing the local union's right to be certified as the employees' bargaining agent in the petitioner's establishment. We are merely saying that the local union must first comply with the statutory requirements in order to exercise this right. Big federations and national unions of workers should take the lead in requiring their locals and chapters to faithfully comply with the law and the rules instead of merely snapping union after union into their folds in a furious bid with rival federations to get the most number of members. WHEREFORE, the petition is GRANTED. The assailed resolution and orders of respondent Med-Arbiter and Secretary of Labor and Employment, respectively, are hereby SET ASIDE. The temporary restraining order dated February 25, 1991 is made permanent. SO ORDERED. G.R. No. 84433 June 2, 1992 ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others, petitioners, vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.

NARVASA, C.J.: The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK), all employed in the same company, at a certification election at which two (2) labor organizations were contesting the right to be the exclusive representative of the employees in the bargaining unit. That denial is assailed as having been done with grave abuse of discretion in the special civil action of certiorari at bar, commenced by the INK members adversely affected thereby. The certification election was authorized to be conducted by the Bureau of Labor Relations among the employees of Tri-Union Industries Corporation on October 20, 1987. The competing unions were Tri-Union Employees Union-Organized Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240 actually took part in the election, conducted under the provision of the Bureau of Labor Relations. Among the 240 employees who cast their votes were 141 members of the INK.

The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with established rule and practice, 1 for (c) a third choice: "NO UNION." The final tally of the votes showed the following results: TUPAS 1 TUEU-OLALIA 95 NO UNION 1 SPOILED 1 CHALLENGED 141 The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the final count in virtue of an agreement between the competing unions, reached at the pre-election conference, that the INK members should not be allowed to vote "because they are not members of any union and refused to participate in the previous certification elections." The INK employees promptly made known their protest to the exclusion of their votes. They filed f a petition to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the true sentiments of the majority of the employees." TUEU-OLALIA opposed the petition. It contended that the petitioners "do not have legal personality to protest the results of the election," because "they are not members of either contending unit, but . . . of the INK" which prohibits its followers, on religious grounds, from joining or forming any labor organization . . . ." The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated December 21, 1987, he certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file employees. In that Order he decided the fact that "religious belief was (being) utilized to render meaningless the rights of the non-members of the Iglesia ni Kristo to exercise the rights to be represented by a labor organization as the bargaining agent," and declared the petitioners as "not possessed of any legal personality to institute this present cause of action" since they were not parties to the petition for certification election. The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority," and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast their votes." Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. He opined that the petitioners are "bereft of legal personality to protest their alleged disenfrachisement" since they "are not constituted into a duly organized labor union, hence, not one of the unions which vied for certification as sole and exclusive bargaining representative." He also pointed out that the petitioners "did not

participate in previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join or assist labor organizations." It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set aside in the present special civil action of certiorari. The Solicitor General having expressed concurrence with the position taken by the petitioners, public respondent NLRC was consequently required to file, and did thereafter file, its own comment on the petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the exercise of their religious belief opted not to join any labor organization as a consequence of which they themselves can not have a bargaining representative, then the right to be representative by a bargaining agent should not be denied to other members of the bargaining unit." Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining." This is made plain by no less than three provisions of the Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3 ART. 243. Coverage and employees right to self-organization. All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes or collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with, restrain or coerce employees in the exercise of their right to self-organization." Similarly, Article 249 (a) makes it an unfair labor practice for a labor organization to "restrain or coerce employees in the exercise of their rights to self-organization . . . " The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows; 4 Sec. 1. Who may join unions; exception. All persons employed in commercial, industrial and agricultural enterprises, including employees of government corporations established under the Corporation Code as well as employees of religious, medical or educational institutions, whether operating for profit or not, except managerial employees, shall have the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining. Ambulant, intermittent and without any definite employers people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. xxx xxx xxx

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5 Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred right. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. 6 As early as 1974 this Court had occasion to expatiate on these self-evident propositions in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.: . . .What the Constitution and Industrial Peace Act recognize and guarantee is the "right" to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right," it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself being prevented by law; second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is therefore the employee who should decide for himself whether he should join or not an association; and should he choose to join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time (Pagkakaisa Samahang Manggagawa ng San Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010, 1019). It is clear, therefore, that the right to join a union includes the right to abstain from joining any union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L19912, January 20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, the guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association. The right to refuse to join or be represented by any labor organization is recognized not only by law but also in the rules drawn up for implementation thereof. The original Rules on Certification promulgated by the defunct Court of Industrial Relations required that the ballots to be used at a certification election to determine which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain, aside from the names of each union, an alternative choice of the employee voting, to the effect that he desires not to be represented by any union. 8 And where only one union was involved, the ballots

were required to state the question "Do you desire to be represented by said union?" as regards which the employees voting would mark an appropriate square, one indicating the answer, "Yes" the other, "No." To be sure, the present implementing rules no longer explicitly impose the requirement that the ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the Omnibus Rules) entitled "Marketing and canvassing of votes," pertinently provides that: . . . (a) The voter must write a cross (X) or a check (/) in the square opposite the union of his choice. If only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO." xxx xxx xxx Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules expressly bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful if the employee's alternative right NOT to form, join or assist any labor organization or withdraw or resign from one may be validly eliminated and he be consequently coerced to vote for one or another of the competing unions and be represented by one of them. Besides, the statement in the quoted provision that "(i)f only one union is involved, the voter shall make his cross or check in the square indicating "YES" or "NO," is quite clear acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES" votes indicating that the majority of the employees in the company do not wish to be represented by any union in which case, no union can represent the employees in collective bargaining. And whether the prevailing "NO" votes are inspired by considerations of religious belief or discipline or not is beside the point, and may not be inquired into at all. The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization. If the results of the election should disclose that the majority of the workers do not wish to be represented by any union, then their wishes must be respected, and no union may properly be certified as the exclusive representative of the workers in the bargaining unit in dealing with the employer regarding wages, hours and other terms and conditions of employment. The minority employees who wish to have a union represent them in collective bargaining can do nothing but wait for another suitable occasion to petition for a certification election and hope that the results will be different. They may not and should not be permitted, however, to impose their will on the majority who do not desire to have a union certified as the exclusive workers' benefit in the bargaining unit upon the plea that they, the minority workers, are being denied the right of self-organization and collective bargaining. As repeatedly stated, the right of self-organization embraces not only the right to form, join or assist labor organizations, but the concomitant, converse right NOT to form, join or assist any labor union. That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have the right of self-organization, is also in truth beyond question, as well as the fact that when they voted that the employees in their bargaining unit should be represented by "NO UNION," they were simply exercising that right of selforganization, albeit in its negative aspect.

The respondents' argument that the petitioners are disqualified to vote because they "are not constituted into a duly organized labor union" "but members of the INK which prohibits its followers, on religious grounds, from joining or forming any labor organization" and "hence, not one of the unions which vied for certification as sole and exclusive bargaining representative," is specious. Neither law, administrative rule nor jurisprudence requires that only employees affiliated with any labor organization may take part in a certification election. On the contrary, the plainly discernible intendment of the law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are members of a labor organization or not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9 In a certification election all rank-and-file employees in the appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank-and-file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the "bargaining unit". Neither does the contention that petitioners should be denied the right to vote because they "did not participate in previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join or assist labor organizations," persuade acceptance. No law, administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections. In denying the petitioners' right to vote upon these egregiously fallacious grounds, the public respondents exercised their discretion whimsically, capriciously and oppressively and gravely abused the same. WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officerin-Charge of the Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter dated July 22, 1988) is ANNULLED and SET ASIDE; and the petitioners are DECLARED to have legally exercised their right to vote, and their ballots should be canvassed and, if validly and properly made out, counted and tallied for the choices written therein. Costs against private respondents. SO ORDERED. TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, respondent. DECISION CARPIO-MORALES, J.: Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club Incorporated (THIGCI) assailing the February 15,

2002 decision of the Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998. On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed[2] to its Comment to the petition for certification election. And it therein incorporated the following tabulation[3] showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification: # of Signatures 13 Reasons for Disqualification Supervisors of THIGCI

6 2 53 Tagaytay Highlands, Inc. 14 Inc. 6 Highlands, Inc. 3 Tagaytay Highlands, Inc. 1 Highlands, Inc. 4

Resigned employees of THIGCI AWOL employees of THIGCI Rank-and-file employees of The Country Club at

Supervisors of The Country Club at Tagaytay Highlands,

Resigned employees of The Country Club at Tagaytay

Terminated employees of The Country Club at

AWOL employees of The Country Club at Tagaytay

Signatures that cannot be deciphered

16 2

Names in list that were erased Names with first names only

the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for certification election on the ground that there is a clear absence of community or mutuality of interests, it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998[10] setting aside the June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition; that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed from the THEUs roster of membership; and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage. The records of the case were thus ordered remanded to the Office of the MedArbiter for the conduct of certification election.

THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition.[4]

Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,[5] on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;[6] and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. THEU thus concluded in its Reply[7] that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election. By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim: We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due course to this petition is therefore proper and appropriate.[9] (Emphasis supplied) Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusioninclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of

THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE Undersecretary by Resolution of December 29, 1998,[11] it filed a petition for certiorari before this Court which, by Resolution of April 14, 1999,[12] referred it to the Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,[13] and in strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.[14] By Decision of February 15, 2000,[15] the Court of Appeals denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al[16] and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,[17] petitioner failed to adduce substantial evidence to support its allegations. Hence, the present petition for certiorari, raising the following

ISSUES/ASSIGNMENT OF ERRORS: THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NONEMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-ANDFILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE[18] The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article 245 of the Labor Code, to wit: Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what would be the effect if a rankand-file union counts supervisory employees among its members, or vice-versa. Citing Toyota[19] which held that a labor organization composed of both rank-andfile and supervisory employees is no labor organization at all, and the subsequent case of Progressive Development Corp. Pizza Hut v. Ledesma[20] which held that: The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization. In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization,[21] (Underscoring and emphasis supplied), petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code.[22]

Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in the preelection conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, viz: x x x Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.)

The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the Rules to Implement the Labor Code (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows: Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; (e) Acting as a labor contractor or engaging in the cabo system, or otherwise engaging in any activity prohibited by law; (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or accepting attorneys fees or negotiation fees from employers; (h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and (j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied), while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioners allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election.

Regarding the alleged withdrawal of union members from participating in the certification election, this Courts following ruling is instructive: [T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification election itself wherein the workers can freely express their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer.[23] As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. While petitioner submitted a list of its employees with their corresponding job titles and ranks,[24] there is nothing mentioned about the supervisors respective duties, powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment.[25] As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:[26]

Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the employees function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. (Emphasis supplied). [27] WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual preelection conference. SO ORDERED. G.R. No. 87266-69 July 30, 1990 ASSOCIATED WORKERS UNION-PTGWO, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISION (EN BANC), METRO PORT

SERVICE, INC., MARINA PORT SERVICES, INC., ADRIANO S. YUMUL and 10 OTHER INDIVIDUAL RESPONDENTS REPRESENTED BY ATTY. EPIFANIO JACOSALEM, respondents. G.R. Nos. 91223-26 JULY 30, 1990 MANILA PORT SERVICES, INC., petitioner, vs. HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, PABLITO REANDELAR, MACARIO DE LUNA, JR., ADAN MENDOAZA, SMITH CARLOTA, EMERECIANO VERGARA, ROMEO ABACAN, LEONARDO ROMULO, ELINO JOSE, and CATINDIANO CALAUAG (COLLECTIVELY CALLED AWUM), respondents. D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69. Ramon N. Nalipay, Jr. for petitioner in G.R. Nos. 91223-26. Cruz, Durian, Agabin, Atienza, Alday & Tuason for respondent MPSI. Udarbe & Jacosalem for private respondents in G.R. Nos. 91223-26. FELICIANO, J.: These cases have been usually difficult for the Court, not because the issues posed are in themselves intellectually demanding, but because of problems generated by the procedure adopted by the parties in coming before this Court. The incidents subject of these cases spawned multiple cases and petitions before the National Labor Relations Commission ("NLRC"). After the NLRC rendered a consolidated decision, the parties, in turn, filed multiple separate certiorari petitions to the Court on a staggered and piecemeal basis. This situation resulted in a number of discrete discussions of issues actually inter-related, since the Court, at any one time, could only see a small part of the whole picture and decide only on the basis of what it could see. In what follows, we have tried to put the whole picture together and to render comprehensive and substantial justice to all the parties. On 26 October 1984, petitioner Associated Workers Union ("AWU")PTGWO, the then bargaining representative of the dockworkers at South Harbor, Port Area, Manila, filed a Notice of Strike against respondent Metro Port Service, Inc. ("Metro"), the then arrastre contractor in the South Harbor, on the issues, among others, of unfilled vacancies and union busting. This was docketed as NLRC Case No. NCR-NS10-288-84. On 3 April 1985, the abovementioned case was certified in an Order by the then Minister of Labor and Employment to the NLRC for compulsory arbitration; the Order also forbade the holding of strikes or lock-outs. 1 The case was docketed as Certified NLRC Case No. 0403-85. In the latter case, one of the demands raised by AWU was that Metro terminate the employment of respondents Adriano Yumul and ten (10) others (individual respondents), for having organized, on 26 October 1984, the Associated Workers Union in Metroport ("AWUM") among the rank-and-file employees of Metro, ostensibly as a local or chapter of AWU. AWU had earlier expelled individual respondents from membership in AUW for disloyalty and, pursuant to the closed-shop provision of the existing AWU-Metro collective bargaining agreement ("CBA"), sought the termination of their employment.

Metro initially resisted AWU's request to terminate the employment of individual respondents, contending that the termination would be premature as individual respondents had not been afforded due process, and that the termination would be violative of the status quo agreement in NLRC Case No. NCR-NS-10-288-84. 2 Metro, however, eventually relented and suspended individual respondents after AWU despite the express prohibition in the Order dated 3 April 1985staged a strike against it. On 18 April 1985, Metro executed a Compromise Agreement ("Agreement") with AWU to end the strike, item No. 2 of which stipulated: At the instance of the union, [Metro] agrees to preventively suspend [individual respondents] effective immediately. 3 The Agreement was attested to by then Deputy Labor Minister Carmelo Noriel. As a result of Metro's implementation of the Agreement, individual respondents on 30 April 1985 filed a complaint against Metro, docketed as NLRC Case No. NCR-41372-85. Metro in that case filed in turn a third-party complaint against AWU and its officers. Metro in April 1985 also filed a complaint for illegal strike with damages against AWU and its officers, docketed as NLRC Case No. NCR-4-1341-85. On 21 June 1985, Labor Arbiter Ceferina Diosana in an Order directed Metro provisionally to reinstate individual respondents pending resolution of the issues raised therein, with which Order Metro complied. On 15 July 1985, AWU filed a petition for injunction against Metro, docketed as NLRC Injunction Case No. 993, praying for issuance of a temporary restraining order stopping the implementation of the Order of provisional reinstatement, and for Metro's compliance with the Agreement providing for the suspension of individual respondents. On 1 August 1985, the NLRC in an En Banc Resolution directed Metro to comply with the Agreement, and Metro complied and re-suspended individual respondents. Individual respondents' petition before the NLRC for preliminary mandatory injunction on 30 August 1985, praying "that pursuant to the Implementing Rules of Batas Pambansa Blg. 130, [Metro] be ordered to pay their salaries and allowances from and after their initial preventive suspension of thirty (30) days and until their actual reinstatement," was not acted upon. All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84); (b) NLRC Case No. NCR-4-1341-85; (c) NLRC Case No. NCR-4-137285; and (d) NLRC Injunction Case No. 993, were ordered consolidated before the NLRC en banc. On 4 September 1986, the NLRC rendered a consolidated Decision. In Certified NLRC Case No. 0403-85, the NLRC ruled that: (a) respondent Metro cannot be compelled to fill up vacancies with AWU's recommendees; (b) respondent Metro cannot be held liable for union busting, the issue of the medically impaired workers having become moot and academic; and (c) the compulsory retirement of AWUs members who have reached the age of 60 years is a valid exercise of management prerogative. In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a national union, and that individual respondents have the right to organize themselves into a local chapter thereof, the formation of which was a protected activity and could not be considered as disloyalty, held the suspension or dismissal of individual respondents

as illegal and, in relation to NLRC Injuction Case No. 993, ordered their reinstatement with backwages, to be paid solidarily by AWU and respondent Metro. In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by AWU not illegal, holding that AWU was of the belief, although erroneously, that it could validly stage a strike during the pendency of its motion for reconsideration of the Minister's Order dated 3 April 1985 enjoining a strike or lockout. Both AWU and Metro filed separate motions for reconsideration of the consolidated Decision. Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc. ("Marina"), by virtue of a Special Permit issued by the Philippine Ports Authority, started operations as the arrastre operator at the Manila South Harbor vice Metro. On November 1986, individual respondents in a Motion/Manifestation prayed that Marina be included as party-respondent. On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's motions for reconsideration of the consolidated Decision dated 4 September 1986, but (acting on individual respondents' Motion/Manifestation) with the modification limiting Metro's liability for backwages to wages accruing up to July 20, 1986 and ordering Marina to reinstate individual respondents with backwages and allowances starting from 21 July 1986. Marina complied with the Resolution by reinstating individual respondents through its payroll retroactive to 21 July 1986. AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition for certiorari on 14 March 1989 praying for the reversal of the decision of the NLRC in NLRC Case No. NCR-NS-10-288-84 and NLRC Injunction Case No. 993 (praying principally for reversal of the order holding that respondent Metro could not be compelled to fill up vacancies with AWUs recommendees) and in NLRC Case No. NCR-4-1372-85 (praying chiefly for reversal of the order reinstating the eleven [11] private respondents to their former positions with backwages payable solidarily by AWU and respondent Metro). These cases (G.R. Nos. 87266-69) were assigned to the Third Division of the Court. Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in G.R. Nos. 81256-59 entitled "Marina Port Services, Inc. v. National Labor Relations Commission, Metro Port Service, Inc, Associated Workers Union ["AWU"-PTGWO], and Associated Workers Union in Metro Port [AWUM]" protesting, on grounds of alleged denial of due process, its inclusion by the NLRC as a party in NLRC Case No. NCR-4-1372-85 and its being required to reinstate individual respondents with backwages. In dismissing these cases (G.R. Nos. 81256-59) on 3 August 1988, the Court held that: . . . [t]he decision to include Marina in the questioned [NLRC Resolution dated 17 July 1987] is based on Par. "7" of the Special Permit granted to Marina which states that "Labor and personnel of previous operator, except those positions of trust and confidence, shall be absorbed by the grantee." Besides, the petitioner was able to file not only a Motion for Reconsideration of the Questioned Resolution but also a Motion to Set Aside Motion/Manifestation and Remarks on the Comment of Metro Port. The lack of due process at the beginning, if any, was cured by the above motions that the petitioner was able to file. 4

On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services, Inc. v. National Labor Relations Commission, Associated Workers Union-PTGWO, Marina Port Services, Inc., and Adriano Yumul [and 10 others]") went to this court again and assailed the NLRC ruling in NLRC Case No. NCR-4-1372-85 and NLRC Injunction Case No. 993. Metro claimed that it should not have been held solidary liable with AWU because it had merely suspended individual respondents pursuant to the Agreement dated 18 April 1985 it had executed with AWU and, later, had merely obeyed the Resolution of the NLRC dated 1 August 1985 ordering Metro to re-suspend individual respondents. In similarly dismissing Metro's petition, the Court in G.R. No. 82705, held: . . . Considering that the petitioner was a party to the compromise agreement with AWU which provided that "at the instance of the union, the company agrees to preventively suspend Adriano S. Yumul and eleven associates effective immediately" and accordingly suspended the private respondents despite the suspension being contrary to law, the petitioner should be made solidarity liable with AWU for the backwages and allowances that the private respondents may have been entitled to during their suspension. The petitioner's liability, however, should not extend to the time that respondent NLRC ordered it to re-suspend the private respondents. 5 (Emphasis supplied) Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23 September 1988 and 4 July 1989, respectively, and the cases were remanded to the Labor Arbiter of origin for execution. On 18 September 1989, the Labor Arbiter issued a writ of execution against Marina to reinstate individual respondents and to pay them the amount of P154,357.00 representing salary adjustments. Marina moved to quash the writ of execution questioning the award of P154,357.00, but without success. Marina thereafter appealed to the NLRC assailing the Labor Arbiter's refusal to quash the writ of execution. On 23 November 1989, Marina received an Order from the Executive Labor Arbiter dated 15 November 1989, requiring the release of any garnished deposit from its bank, holding that no seasonable appeal from the 7 November 1989 Order denying Marina's motion to quash had been taken. Marina filed a Manifestation dated 23 November 1989, arguing that it had filed an appeal with the NLRC within the 10-day reglementary period. On 6 December 1989, the Executive Labor Arbiter issued a writ of execution requiring Marina: (a) to reinstate individual respondents and to pay them the amount of P154,357.00 representing salary adjustments; and (b) to implement and honor the legality of the organization and registration of AWUM as the local chapter of AWU. Marina then once more went to the Court in G.R. Nos. 91223-26 and filed a Petition for certiorari to invalidate the writ of execution, pleading that: (a) execution had been ordered without due regard for its right of appeal from the Labor Arbiter's Order; and (b) execution would result in its being made to pay more than what is called for by the ruling of the Court in G.R. No. 82705, where the Court affirmed the NLRC ruling that Marina "should be made solidarily liable with AWU for the backwages and allowances that the private respondents may have been entitled to during their suspension [although liability] should not extend to the time that respondent NLRC ordered it to re-suspend the private respondents." These cases (G.R. Nos. 91223-26) were assigned to the First Division of the Court. On 20

December 1989, a temporary restraining order was issued by the First Division of the Court to enjoin the implementation of the Executive Labor Arbiter's Order of 6 December 1989. On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos. 87266-69. I 1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos. 87266-69 considers that petitioner AWU has failed to show grave abuse of discretion or any act without or in excess of jurisdiction on the part of the NLRC in Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84). The NLRC was correct there in holding that respondent Metro cannot be compelled to fill up vacancies with AWU's recommendees, as the CBA between AWU and respondent Metro granted the latter the right to "fill or not to fill-up vacancies"; that the issue of the medically impaired employees had already been raised in another Notice of Strike filed by AWU against respondent Metro on 16 September 1985, and both parties had agreed to abide by the recommendation and decision of an examining physician selected by them; and that the existing CBA grants respondent Metro the right to compulsorily retire any member of AWU who had reached 60 years of age, which right has been exercised by Metro. 2. The NLRC, however, misappreciated the relevant facts in NLRC Case No. NCR-41372-85 and NLRC Injunction Case No. 993. While it is true that AWUM as a local union, being an entity separate and distinct from AWU, is free to serve the interest of all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be exercised, and is thus considered a protected labor activity, only when warranted by circumstances. 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. 6 Even before the onset of the freedom period (and despite the closed-shop provision in the CBA between the mother union and management) disaffiliation may still be carried out, but such disaffiliation must be effected by a majority of the members in the bargaining unit . 7 This happens when there is a substantial shift in allegiance on the part of the majority of the members of the union. In such a case, however, the CBA continues to bind the members of the new or disaffiliated and independent union up to the CBA's expiration date. 8 The record does not show that individual respondents had disaffiliated during the freedom period. The record does, however, show that only eleven (11) members of AWU (individual respondents) had decided to disaffiliate from AWU and form AWUM. Respondent Metro had about 4,000 employees, and around 2,000 of these were members of AWU 9 It is evident that individual respondents had failed to muster the necessary majority in order to justify their disaffiliation. (In fact, it was only on 5 December 1985 that individual respondents were finally able to register an independent union called Metroport Workers Union [MWU]. 10 Even then, in the absence of allegation by AWUM [MWU] of the exact number of its members, the Court presumes that only twenty percent [20%] of the employees of Metro had joined MWU) 11 Thus, in the referendum held on 7 January 1985 at the PTGWO compound (where representatives of the Ministry of Labor and Employment were present) to determine whether individual respondents should be expelled from AWU, 1,229 members (out of 1,695 members present) voted for expulsion of individual respondents. 12

The individual respondents here have failed to present proof of their allegation that the 1,695 members of AWU were not employees of respondent Metro alone; the Court therefore presumes that those who voted for their expulsion were bona fide employees of respondent Metro. Moreover, individual respondents failed to allege that their expulsion for disloyalty violated AWU's constitution and by-laws. 13 In sum, the attempted disaffiliation of the eleven (11) private respondents from the petitioner mother union and the effort to organize either a new local of the mother union or an entirely new and separate union, did not, under the circumstances of this case, constitute protected activities of the eleven (11) individual respondents. II In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that AWU was justified in expelling from its membership the eleven (11) individual respondents, the question now arises: how and to what extent does such conclusion affect the liability of Metro, and Marina (as successor-employer)? It will be recalled that the Resolutions of this Court in G.R. Nos. 81256-59 and 82705 dismissing the Petitions for certiorari of both Metro and Marina assailing the NLRC consolidated Decision of 4 September 1986 insofar as their (Metro's and Marina's) liability for reinstatement and backwages of the individual respondents thereunder is concerned, became final and judgment entered therein, sometime ago. 1. So far as concerns AWU's liability under the NLRC consolidated Decision, it should in the first place be pointed out that the Court did not make any pronouncement either in G.R. Nos. 81256-59 or in G.R. No. 82705 concerning AWU's liability. In G.R. No. 82705, the Court merely acted on the issue raised by petitioner Metro: that Metro should not be liable at all for reinstatement and backwages considering that Metro was only pressed into suspending individual respondents because of AWUs threat to strike. In dismissing Metro's Petition, the Court in G.R. No. 82705 in effect merely held that Metro, whatever the liability of AWU might be in respect of the expulsion of individual respondents, could not escape liability by throwing all responsibility upon AWU; and that Metro could not validly plead that it was under duress when it executed the Agreement with AWU providing for, among other things, the preventive suspension of individual respondents. The Court is, of course, aware that AWU was a party-respondent in both G.R. Nos. 81256-59 and 82705, and that AWU had in fact filed a Comment in both G.R. Nos. 81256-59 and 82705. Nonetheless, the Court did not either in G.R. Nos. 82156-59 or in G.R. No. 82705 in fact make a determination of the legality of AWU's expulsion of individual respondents from its membership. The Court in G.R. No. 82705 held only that the liability of Metro was solidary in nature, i.e., solidary with AWU, whatever AWU's liability might be; and it may be well to recall that solidary liability is different from secondary liability. In G.R. Nos. 81256-59, the Court simply held that Marina was properly impleaded in the underlying cases and could not be absolved from responsibility for reinstatement and backwages upon the ground of denial of due process. 2. Thus, so far as concerns the liability of Metro and Marina for reinstatement with backwages of individual respondents under the consolidated NLRC Decision, the preeminent fact is that the Court's Resolutions in G.R. Nos. 81256-59 and 82705 dismissing their Petitions are already final. The liabilities of Metro and Marina for reinstatement and backwages under the consolidated NLRC Decision have become fixed and definite, with the modification decreed by the Court in G.R. No. 82705 in so far as backwages were concerned. Thus, the conclusion we today have reached

in G.R. Nos. 87266-69 cannot benefit Metro and Marina and will not dissolve their already fixed and definite liabilities. 3. Turning to the question of the backwages due to the eleven (11) individual respondents, three (3) different time periods are relevant here and must be distinguished from one another: First Period: From 18 April 1985 to 21 June 1985: the Compromise Agreement between Metro and AWU to end the strike, in which Metro agreed to preventively suspend the eleven (11) individual respondents, was effected on 18 April 1985 and implemented immediately. The Labor Arbiter on 21 June 1985 ordered Metro to reinstate provisionally the eleven (11) individual respondents and Metro complied. Second Period: From 1 August 1985 up to 27 July 1987: the NLRC, pursuant to the urging of AWU, ordered Metro to re-suspend the individual respondents on 1 August 1985 and Metro again complied with this Order. Approximately two (2) years later, on 27 July 1987, NLRC ordered Metro/Marina to reinstate the individual respondents and Marina complied by reinstating the individual respondents on the payroll, i.e., paying their salaries although they were not allowed to work on their jobs. Third Period: From 28 July 1987 to 18 September 1989: on 18 September 1989, the Labor Arbiter issued the questioned writ of execution ordering, among other things, Marina to reinstate formally the individual respondents. Under the consolidated NLRC Decision, Metro/Marina are liable for the backwages accruing during the First and Third Periods above indicated. In respect of the Second Period, however, the Court in G.R. No. 82705, as already pointed out earlier, held that Metro/Marina should not be held liable for backwages accruing during that period. Strictly speaking, in view of our conclusion above that AWU was justified in expelling individual respondents from its membership, neither AWU nor Metro/Marina would be liable to individual respondents for the backwages accruing during this Second Period. 4. In the interest of substantial and expeditious justice, however, we believe that the backwages accruing during the Second Period should be paid and shared by AWU and by Metro Marina, on a 50-50 basis. We here establish this equitable allocation of ultimate responsibility in order to forestall further litigation between AWU and Metro/Marina and individual respondents in respect of claims and countering claims for payment or reimbursement or contribution and to put a definite end to this prolonged and costly confrontation among the several parties. The equitable considerations which impel us to hold AWU liable for one-half () of the backwages during the Second Period include: (a) the fact that Metro had been reluctant to comply with the demand of AWU to terminate the services of individual respondents and had wanted to give the latter procedural due process, but gave in to the demands of AWU;

(b) that AWU had pressed Metro very hard and indeed went on strike against Metro when Metro refused simply to terminate the services of the individual respondents; (c) that AWU, instead of waiting for final judicial determination of the legality of its expulsion of individual respondents, chose to importune the NLRC to issue the order requiring the re-suspension of the individual respondents on 1 August 1985, with which order Metro eventually complied. 5. Turning to Metro/Marina we note that, apart from the finality of the Court's Resolutions in G.R. Nos. 81256-59 and 82705, there is independent basis for holding Metro/Marina responsible for reinstatement with backwages accruing throughout the three (3) periods above indicated. The equitable considerations which lead us to hold Metro/Marina responsible for one-half () of the backwages accruing during the above Second Period relate to the failure of Metro to accord individual respondents procedural due process by giving them reasonable opportunity to explain their side before suspending or dismissing them. Such dismissal was accordingly in violation of the Labor Code. 14 Notwithstanding AWU's closed-shop clause in the CBA, Metro was bound to conduct its own inquiry to determine the existence of substantial basis for terminating the employment of individual respondents. 15 That AWU, disregarding the Minister of Labor and Employment's express order, had threatened to go on strike, and indeed actually went on strike, if Metro had continued with the services of individual respondents, did not relieve Metro from the duty to accord procedural due process to individual respondents. 16 6. The portion of the Writ of Execution issued by the Executive Labor Arbiter requiring Marina to pay salary differentials in the total amount of P154,357.00 accruing during the period from 20 July 1986 up to October 1989, should be modified to conform with the above legal and equitable allocation of liability for the backwages which had accrued during the three (3) Periods above mentioned during which the individual respondents were suspended. The salary differentials, as we understands it, refer to increases in the prevailing wages accruing partly during the Second Period and partly during the Third Period as above indicated. In other words, the salary differentials accruing from 20 July 1986 up to 27 July 1987 should be borne on a 50-50 basis by AWU on the one hand and Metro/Marina on the other. The salary differentials accruing from 28 July 1987 up to 18 September 1989 shall be borne exclusively by Marina. 7. The portion of the Writ of Execution issued by the Executive Labor Arbiter which requires Marina to recognize the legality of the organization and registration of AWUM (now MWU) as a local chapter of AWU, is inconsistent with the conclusions we have set forth in Part I above, and must be deleted. What was in fact eventually established by individual respondents was a separate, independent union called Metro Port Workers Union (MWU) which was not entitled, during the time periods here relevant, to recognition as the bargaining unit in CBA negotiations. ACCORDINGLY, the Court Resolved: In G.R. Nos. 87266-69: (a) to DISMISS the Petition for Certiorari in respect of Certified NLRC Case No. 0403-855 (NCR-NS-10-288-84) for lack of merit; and

(b) to GRANT partially the Petition for Certiorari in respect of NLRC Case No. NCR-4-1372-85 and NLRC Injunction Case No. 993. The consolidated Decision of the NLRC dated 4 September 1986 ordering AWU and Marina to pay solidarily the backwages of individual respondents, as well as the NLRC Resolution of 27 July 1987 denying AWUs and Metro's Motions for Reconsideration, are hereby MODIFIED so as to require AWU and Metro/Marina to pay, on a 50-50 basis, to individual respondents the backwages which accrued during the Second Period, i.e., from 1 August 1985 up to 27 July 1987. In G.R. Nos. 91223-26: to GRANT partially the Petition. The Order of the Executive Labor Arbiter dated 6 December 1989 is hereby MODIFIED so as (a) to require AWU and Metro/Marina on a 50-50 basis to pay the salary differentials accruing during the period from 20 July 1986 up to 27 July 1987, and Marina alone to pay the salary differentials accruing from 28 July 1987 up to 31 October 1989, and so as (b) to delete the portion requiring Marina to recognize AWU. (MWU) as the local chapter of AWU. The Temporary Restraining Order issued by the Court on 20 December 1989 is hereby LIFTED so as to permit enforcement of the Order of the Executive Labor Arbiter as herein modified. No pronouncement as to costs. ABS CBN SUPERVISORS EMPLOYEE UNION MEMBERS, petitioner, vs. ABS CBN BROADCASTING CORP., HERBERT RIVERA, ALBERTO BERBON, CINDY MUNOZ, CELSO JAMBALOS, SALVADOR DE VERA, ARNULFO ALCAZAR, JAKE MADERAZO, GON CARPIO, OSCAR LANDRITO, FRED GARCIA, CESAR LOPEZ and RUBEN BARRAMEDA, respondents. DECISION PURISIMA, J.: At bar is a special civil action for Certiorari[1] seeking the reversal of the Order[2] dated July 31, 1992 of public respondent Department of Labor and Employment Undersecretary Bienvenido E. Laguesma[3] in Case No. NCR OD M 90 07 037. From the records on hand, it can be gathered, that: On December 7, 1989, the ABS-CBN Supervisors Emloyees Union (the Union), represented by respondent Union Officers, and ABS-CBN Broadcasting Corporation (the Company) signed and concluded a Collective Bargaining Agreement with the following check-off provision, to wit: Article XII The [C]ompany agrees to advance to the Union a sum equivalent to 10% of the sum total of all the salary increases and signing bonuses granted to the Supervisors under this collective Bargaining Agreement and upon signing hereof to

cover the Unions incidental expenses, including attorneys fees and representation expenses for its organization and (sic) preparation and conduct hereof, and such advance shall be deducted from the benefits granted herein as they accrue. On September 19, 1990, Petitioners[4] filed with the Bureau of Labor Relations, DOLE-NCR, Quezon City, a Complaint against the Union Officers[5] and ABS-CBN Broadcasting corporation, praying that (1) the special assessment of ten percent (10%) of the sum total of all salary increases and signing bonuses granted by respondent Company to the members of the Union be declared illegal for failure to comply with the labor Code, as amended, particularly Article 241, paragraphs (g), (n), and (o); and in utter violation of the Constitution and By-Laws of the ABS-CBN Supervisors Employees Union; (2) respondent Company be ordered to suspend further deductions from petitioners salaries for their shares thereof. In their Answers, respondent Union Officers and Company prayed for the dismissal of the Complaint for lack of merit. They argued that the check-off provision is in accordance with law as majority of the Union members individually executed a written authorization giving the Union officers and the Company a blanket authority to deduct subject amount. On January 21, 1991, Med-Arbiter Rasidali C. Abdula issued the following Order:[6] WHEREFORE, premises considered, judgment is hereby rendered: a) declaring the special assessment of 10% of the sum total of CBA benefits as illegal;

b) ordering respondents union officers to refund to the complainants and other union members the amount of five Hundred Thousand Pesos (P500,000.00) advanced by the respondent Company as part of the 10% sum total of CBA benefits without unnecessary delay; c) ordering the respondent company to stop and desist from further making advances and deductions from the union members salaries their share in the advances already made to the union; d) ordering the respondent Company to remit directly to the complainants and other union members the amount already deducted from the union members salaries as part of their share in the advances already made to the union and which it had kept in trust during the pendency of this case; and e) directing the respondents union officers and respondent Company to submit report on the compliance thereof. SO ORDERED. On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma handed down a Decision[7] on July 1, 1991, disposing as follows:

WHEREFORE, the appeals are hereby denied, the Order of the Med-Arbiter is affirmed en toto. On July 5, 1991, the aforesaid Decision was received by the respondent Union Officers and respondent Company. On July 13, 1991, they filed their Motion for Reconsideration stating, inter alia that the questioned ten percent (10%) special assessment is valid pursuant to the ruling in Bank of the Philippine Islands Employee Union ALU vs. NLRC.[8] On July 31, 1992, Undersecretary B.E. Laguesma issued an Order[9]; resolving, thus: "WHEREFORE, the Decision dated 01 July 1991 is hereby SET ASIDE. In lieu thereof, a new one is hereby entered DISMISSING the Complaint/Petition for lack of merit." Hence, the present petition seeking to annul and set aside the above-cited Order of public respondent Undersecretary B.E. Laguesma, for being allegedly tainted with grave abuse of discretion amounting to lack of jurisdiction. Did the public respondent act with grave abuse of discretion in issuing the challenged Order reversing his own Decision of July 1, 1991? Such is the sole issue posited,which we resolve in the negative. The petition is unmeritorious. Petitioners claim[10] that the Decision of the Secretary of Labor and Employment dated July 1, 1991, affirming in toto the Order of Med-Arbiter Rasidali Abdullah dated January 31, 1991, cannot be a subject of a motion for reconsideration because it is final and unappealable pursuant to Section 8, Rule VIII, Book V of the Omnibus Rule Implementing the Labor Code. It is further argued that the only remedy of the respondent Union Officers' is to file a petition for certiorari with this Court. Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides: "The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of the records of the case. The decision of the Secretary shall be final and inappealable." [Underscoring supplied]. (Comment, p. 101) The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be reconsidered since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the law requires a motion for reconsideration to enable the public respondent to correct his mistakes, if any. In Pearl S. Buck Foundation, Inc., vs. NLRC,[11] this Court held: "Hence, the only way by which a labor case may reach the Supreme Court is through a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. Such petition may be filed within a reasonable time from receipt of the resolution denying the motion for reconsideration of the NLRC decision." [Underscoring; supplied]. Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained of.

So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil action of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative remedies through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the same so that he can bring a special civil action for certiorari before the Supreme Court.[12] Furthermore, it appears that the petitioners filed with the public respondent a Motion for Early Resolution[13] dated June 24, 1992. Averring that private respondents' Motion for Reconsideration did not contain substantial factual or legal grounds for the reversal of subject decision. Consequently, petitioners are now estopped from raising the issue sought for resolution. In Alfredo Marquez vs. Secretary of Labor,[14] the Court said: "xxx The active participation of the party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction."

What is more, it was only when the public respondents issued the Order adverse to them that the petitioners raised the question for the first time before this Court. Obviously, it is a patent afterthought which must be abhorred. Petitioners also argued that the check-off provision in question is illegal because it was never submitted for consideration and approval to "all the members at a general membership meeting called for the purpose"; and further alleged that the formalities mandated by Art. 241, paragraphs (n) and (o) of the Labor Code, as amended, were not complied with. "A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from its employees, deducts union dues or agency fees from the latter's wages and remits them directly to the union."[15] Its desirability in a labor organization is quite evident. It is assured thereby of continuous funding. As this Court has acknowledged, the system of check-off is primarily for the benefit of the Union and only indirectly, for the individual employees. The legal basis of check-off is found in statutes or in contracts.[16] The statutory limitations on check-offs are found in Article 241, Chapter II, Title IV, Book Five of the Labor Code, which reads: "Rights and conditions of membership in a labor organization. - The following are the rights and conditions of membership in a labor organization: xxx

(g) No officer, agent, member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws. xxx (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members of a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president. (o) Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee with an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deductions. [Underscoring; supplied] Article 241 of the Labor Code, as amended, must be read in relation to Article 222, paragraph (b) of the same law, which states: "No attorney's fees, negotiation fees or similar charges of any kind arising from collective bargaining negotiations or conclusion of the collective agreement shall be imposed on any individual member of the contracting union: Provided, however, that attorney's fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void." [Underscoring; supplied] And this court elucidated the object and import of the said provision of law in Bank of Philippine Islands Employees Union - Association Labor Union (BPIEU-ALU) vs. National Labor Relations Commission:[17] "The Court reads the afore-cited provision (Article 222 [b] of the Labor Code) as prohibiting the payment of attorney's fees only when it is effected through forced contributions from the workers from their own funds as distinguished from the union funds. xxx" Noticeably, Article 241 speaks of three (3) requisites that must be complied with in order that the special assessment for Union's incidental expenses, attorney's fees and representation expenses, as stipulated in Article XII of the CBA, be valid and upheld namely: 1) authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (2) secretary's record of the minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee concerned. After a thorough review of the records on hand, we find that the three (3) requisites for the validity of the ten percent (10%) special assessment for Union's incidental expenses, attorney's fees and representation expenses were met.

It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee Union held its general meeting, whereat it was agreed that a ten percent (10%) special assessment from the total economic package due to every member would be checked-off to cover expenses for negotiation, other miscellaneous expenses and attorney's fees. The minutes of the said meeting were recorded by the Union's Secretary, Ma. Carminda M. Munoz, and noted by its President, Herbert Rivera.[18] On May 24, 1991, said Union held its General Membership Meeting, wherein majority of the members agreed that "in as much as the Union had already paid Atty. P. Pascual the amount of P500,000.00, the same must be shared by all the members until this is fully liquidated."[19] Eighty-five (85) members of the same Union executed individual written authorizations for check-off, thus: "Towards that end, I hereby authorize the Management and/or Cashier of ABS-CBN BROADCASTING CORPORATION to deduct from my salary the sum of P30.00 per month as my regular union dues and said Management and/or Cashier are further authorize (sic) to deduct a sum equivalent to 10% of all and whatever benefits that will become due to me under the COLLECTIVE BARGAINING AGREEMENT (CBA) that may be agreed upon by the UNION and MANAGEMENT and to apply the said sum to the advance that Management will make to our Union for incidental expenses such as attorney's fees, representations and other miscellaneous expenses pursuant to Article XII of the proposed CBA."[20] Records do not indicate that the aforesaid check-off authorizations were executed by the eighty-five (85) Union members under the influence of force or compulsion. There is then, the presumption that such check-off authorizations were executed voluntarily by the signatories thereto. Petitioners contention that the amount to be deducted is uncertain[21] is not persuasive because the check-off authorization clearly stated that the sum to be deducted is equivalent to ten percent (10%) of all and whatever benefits may accrue under the CBA. In other words, although the amount is not fixed, it is determinable. Petitioners further contend that Article 241 (n) of the Labor Code, as amended, on special assessments, contemplates a general meeting after the conclusion of the collective bargaining agreement. Subject Article does not state that the general membership meeting should be called after the conclusion of a collective bargaining agreement. Even granting ex gratia argumenti that the general meeting should be held after the conclusion of the CBA, such requirement was complied with since the May 24, 1991 General Membership Meeting was held after the conclusion of the Collective Bargaining Agreement, which was signed and concluded on December 7, 1989. Considering that the three requisites afforesaid for the validity of a special assessment were observed or met, we uphold the validity of the ten percent (10%) special assessment authorized in Article XII of the CBA. We also concur in the finding by public respondent that the Bank of the Philippine Islands Employees Union ALU vs. NLRC[22] is apposite in this case. In BPIEU-ALU,

the petitioners, impugned the Order of the NLRC, holding that the validity of the five percent (5%) special assessment for attorneys fees is contrary to Article 222, paragraph (b) of the Labor Code, as amended. The court ratiocinated, thus: The Court reads the aforecited provision as prohibiting the payment of attorneys fees only when it is effected through forced contributions from the workers from their own funds a distinguished from the union funds. The purpose of the provision is to prevent imposition on the workers of the duty to individually contribute their respective shares in the fee to be paid the attorney for his services on behalf of the union in its negotiations with the management. xxx [Underscoring supplied] However, the public respondent overlooked the fact that in the said case, the deduction of the stipulated five percent (5%) of the total economic benefits under the new collective bargaining agreement was applied only to workers who gave their individual signed authorizations. The Court explained: xxx And significantly, the authorized deduction affected only the workers who adopted and signed the resolution and who were the only ones from whose benefits the deductions were made by BPI. No similar deductions were taken from the other workers who did not sign the resolution and so were not bound by it. [Underscoring; supplied] While the court also finds merit in the finding by the public respondents that Palacol vs. Ferrer-Calleja[23] is inapropos in the case under scrutiny, it does not subscribe to public respondents reasoning that Palacol should not be retroactively applied to the present case in the interest of justice, equity and fairplay.[24] The inapplicability of Palacol lies in the fact that it has a different factual milieu from the present case. In Palacol, the check-off authorization was declared invalid because majority of the Union members had withdrawn their individual authorizations, to wit: Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that special assessment maybe validly check-off. Even assuming that the special assessment was validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union, nevertheless there can be no valid check-off considering that the majority of the Union members had already withdrawn their individual authorizations. A withdrawal of individual authorization is equivalent to no authorization at all. xxx [Underscoring; supplied] In this case, the majority of the Union members gave their individual written checkoff authorizations for the ten percent (10%) special assessment. And they have never withdraw their individual written authorizations for check-off. There is thus cogent reason to uphold the assailed Order, it appearing from the records of the case that twenty (20)[25] of the forty-two (42) petitioners executed as Compromise Agreement[26] ratifying the controversial check-off provision in the CBA. Premises studiedly considered, we are of the irresistable conclusion and, so find, that the ruling in BPIEU-ALU vs. NLRC that (1) the prohibition against attorneys fees in Article 222, paragraph (b) of the Labor Code applies only when the payment of

attorneys fees is effected through forced contributions from the workers; and (2) that no deductions must be taken from the workers who did not sign the check-off authorization, applies to the case under consideration. WHEREFORE, the assailed Order, dated July 31, 1992, of DOLE Undersecretary B.E. Laguesma is AFFIRMED except that no deductions shall be taken from the workers who did not give their individual written check-off authorization. No pronouncement as to costs.