[G.R. No. 178296. January 12, 2011.

THE HERITAGE HOTEL MANILA, acting through its owner,

GRAND PLAZA HOTEL CORPORATION, petitioner, vs. NATIONAL
UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC), respondent.

DECISION

NACHURA, J : p

Before the Court is a petition for review on certiorari of the

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

The case stemmed from the following antecedents:

On October 11, 1995, respondent filed with the Department of Labor

and Employment-National Capital Region (DOLE-NCR) a petition for
certification election. 2The Med-Arbiter granted the petition on February 14,
1996 and ordered the holding of a certification election. 3 On appeal, the
DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the
Med-Arbiter's order and remanded the case to the Med-Arbiter for the
holding of a preelection conference on February 26, 1997. Petitioner filed a
motion for reconsideration, but it was denied on September 23, 1996.
 The preelection conference was not held as initially scheduled; it was
held a year later, or on February 20, 1998. Petitioner moved to archive or
to dismiss the petition due to alleged repeated non-appearance of
respondent. The latter agreed to suspend proceedings until further notice.
The preelection conference resumed on January 29, 2000.

Subsequently, petitioner discovered that respondent had failed to

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

On June 1, 2000, petitioner reiterated its request by filing a Motion to

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

Nevertheless, the certification election pushed through on June 23,

2000. Respondent emerged as the winner. 6

On June 28, 2000, petitioner filed a Protest with Motion to Defer

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

Meanwhile, respondent filed its Answer 8 to the petition for the

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

Citing National Union of Bank Employees v. Minister of Labor, et

al. 9 and Samahan ng Manggagawa sa Pacific Plastic v. Hon.
Laguesma, 10 the Med-Arbiter held that the pendency of a petition for
cancellation of registration is not a bar to the holding of a certification
election. Thus, in an Order 11 dated January 26, 2001, the Med-Arbiter
dismissed petitioner's protest, and certified respondent as the sole and
exclusive bargaining agent of all supervisory employees. aHIDAE
 Petitioner subsequently appealed the said Order to the DOLE
Secretary. 12 The appeal was later dismissed by DOLE Secretary Patricia A.
Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of August 21,
2002. 13 Petitioner moved for reconsideration, but the motion was also
denied. 14

In the meantime, Regional Director Alex E. Maraan (Regional Director

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

WHEREFORE, premises considered, the instant petition to delist the

National Union of Workers in the Hotel, Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter from the roll of
legitimate labor organizations is hereby DENIED.

SO ORDERED. 16

Aggrieved, petitioner appealed the decision to the BLR. 17 BLR Director

Hans Leo Cacdac inhibited himself from the case because he had been a
former counsel of respondent.

In view of Director Cacdac's inhibition, DOLE Secretary Sto. Tomas took

cognizance of the appeal. In a resolution 18 dated February 21, 2003, she
dismissed the appeal, holding that the constitutionally guaranteed freedom of
association and right of workers to self-organization outweighed respondent's
noncompliance with the statutory requirements to maintain its status as a
legitimate labor organization.

Petitioner filed a motion for reconsideration, 19 but the motion was

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

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

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

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

Petitioner filed a motion for reconsideration, invoking this Court's

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

In its Resolution 23 dated June 4, 2007, the CA denied petitioner's

motion, stating that the BLR Director's inhibition from the case was a
peculiarity not present in the Abbott case, and that such inhibition justified
the assumption of jurisdiction by the DOLE Secretary.

In this petition, petitioner argues that:

The Court of Appeals seriously erred in ruling that the Labor Secretary
properly assumed jurisdiction over Petitioner's appeal of the Regional
Director's Decision in the Cancellation Petition . . . .

A. Jurisdiction is conferred only by law. The Labor Secretary had no

jurisdiction to review the decision of the Regional Director in a
petition for cancellation. Such jurisdiction is conferred by law to the
BLR.

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

C. The Labor Secretary's assumption of jurisdiction over the Appeal

without notice violated Petitioner's right to due process.

II.

The Court of Appeals gravely erred in affirming the dismissal of the

Cancellation Petition despite the mandatory and unequivocal provisions
of the Labor Code and its Implementing Rules. 24 cCAIaD

The petition has no merit.

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

In Abbott, the appeal from the Regional Director's decision was directly
filed with the Office of the DOLE Secretary, and we ruled that the latter has
no appellate jurisdiction. In the instant case, the appeal was filed by
petitioner with the BLR, which, undisputedly, acquired jurisdiction over the
case. Once jurisdiction is acquired by the court, it remains with it until the
full termination of the case. 25

Thus, jurisdiction remained with the BLR despite the BLR Director's
inhibition. When the DOLE Secretary resolved the appeal, she merely stepped
into the shoes of the BLR Director and performed a function that the latter
could not himself perform. She did so pursuant to her power of supervision
and control over the BLR. 26

Expounding on the extent of the power of control, the Court,

in Araneta, et al. v. Hon. M. Gatmaitan, et al., 27 pronounced that, if a
certain power or authority is vested by law upon the Department Secretary,
then such power or authority may be exercised directly by the President, who
exercises supervision and control over the departments. This principle was
incorporated in the Administrative Code of 1987, which defines "supervision
and control" as including the authority to act directly whenever a specific
function is entrusted by law or regulation to a subordinate. 28 Applying the
foregoing to the present case, it is clear that the DOLE Secretary, as the
person exercising the power of supervision and control over the BLR, has the
authority to directly exercise the quasi-judicial function entrusted by law to
the BLR Director.
 It is true that the power of control and supervision does not give the
Department Secretary unbridled authority to take over the functions of his
or her subordinate. Such authority is subject to certain guidelines which are
stated in Book IV, Chapter 8, Section 39 (1) (a) of the Administrative Code
of 1987. 29 However, in the present case, the DOLE Secretary's act of taking
over the function of the BLR Director was warranted and necessitated by the
latter's inhibition from the case and the objective to "maintain the integrity
of the decision, as well as the Bureau itself." 30

Petitioner insists that the BLR Director's subordinates should have

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

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

Petitioner also insists that respondent's registration as a legitimate

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

We are not persuaded.

Articles 238 and 239 of the Labor Code read:

ART. 238. CANCELLATION OF REGISTRATION; APPEAL

The certificate of registration of any legitimate labor organization,

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

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION

The following shall constitute grounds for cancellation of union

registration:

xxx xxx xxx

(d) Failure to submit the annual financial report to the Bureau

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

xxx xxx xxx

(i) Failure to submit list of individual members to the Bureau once a

year or whenever required by the Bureau. 35
 These provisions give the Regional Director ample discretion in dealing
with a petition for cancellation of a union's registration, particularly,
determining whether the union still meets the requirements prescribed by
law. It is sufficient to give the Regional Director license to treat the late filing
of required documents as sufficient compliance with the requirements of the
law. After all, the law requires the labor organization to submit the annual
financial report and list of members in order to verify if it is still viable and
financially sustainable as an organization so as to protect the employer and
employees from fraudulent or fly-by-night unions. With the submission of the
required documents by respondent, the purpose of the law has been achieved,
though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the

DOLE Secretary in denying the petition for cancellation of respondent's
registration. The union members and, in fact, all the employees belonging to
the appropriate bargaining unit should not be deprived of a bargaining agent,
merely because of the negligence of the union officers who were responsible
for the submission of the documents to the BLR. THCASc

Labor authorities should, indeed, act with circumspection in treating

petitions for cancellation of union registration, lest they be accused of
interfering with union activities. In resolving the petition, consideration must
be taken of the fundamental rights guaranteed by Article XIII, Section 3 of
the Constitution, i.e., the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities. Labor
authorities should bear in mind that registration confers upon a union the
status of legitimacy and the concomitant right and privileges granted by law
to a legitimate labor organization, particularly the right to participate in or
ask for certification election in a bargaining unit. 36 Thus, the cancellation of
a certificate of registration is the equivalent of snuffing out thelife of a labor
organization. For without such registration, it loses — as a rule — its rights
under the Labor Code. 37
 It is worth mentioning that the Labor Code's provisions on cancellation
of union registration and on reportorial requirements have been recently
amended byRepublic Act (R.A.) No. 9481, An Act Strengthening the
Workers' Constitutional Right to Self-Organization, Amending for the
Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the
Labor Code of the Philippines, which lapsed into law on May 25, 2007 and
became effective on June 14, 2007. The amendment sought to strengthen
the workers' right to self-organization and enhance the Philippines'
compliance with its international obligations as embodied in theInternational
Labour Organization (ILO) Convention No. 87, 38 pertaining to the
non-dissolution of workers' organizations by administrative
authority. 39 Thus, R.A. No. 9481 amended Article 239 to read:

ART. 239. Grounds for Cancellation of Union Registration. — The

following may constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the

adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took
part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the

election of officers, minutes of the election of officers, and the list of
voters;

(c) Voluntary dissolution by the members.

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

ART. 242-A. Reportorial Requirements. — The following are documents

required to be submitted to the Bureau by the legitimate labor
organization concerned:

(a) Its constitution and by-laws, or amendments thereto, the minutes of

ratification, and the list of members who took part in the ratification of
 the constitution and by-laws within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto; cTIESa

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

(c) Its annual financial report within thirty (30) days after the close of
every fiscal year; and

(d) Its list of members at least once a year or whenever required by the
Bureau.

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

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

The aforesaid amendments and the ILO's opinion on this matter serve
to fortify our ruling in this case. We therefore quote with approval the DOLE
Secretary's rationale for denying the petition, thus:
It is undisputed that appellee failed to submit its annual financial reports
and list of individual members in accordance with Article 239 of the
Labor Code.However, the existence of this ground should not necessarily
lead to the cancellation of union registration. Article 239 recognizes the
regulatory authority of the State to exact compliance with reporting
requirements. Yet there is more at stake in this case than merely
monitoring union activities and requiring periodic documentation
thereof.

The more substantive considerations involve the constitutionally

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

Moreover, submission of the required documents is the duty of the officers

of the union. It would be unreasonable for this Office to order the
cancellation of the union and penalize the entire union membership on
the basis of the negligence of its officers. In National Union of Bank
Employees vs. Minister of Labor, L-53406, 14 December 1981, 110
SCRA 296, the Supreme Court ruled:

As aptly ruled by respondent Bureau of Labor Relations Director Noriel:

"The rights of workers to self-organization finds general and specific
constitutional guarantees. . . . Such constitutional guarantees should not
be lightly taken much less nullified. A healthy respect for the freedom of
association demands that acts imputable to officers or members be not
easily visited with capital punishments against the association itself."
 At any rate, we note that on 19 May 2000, appellee had submitted its
financial statement for the years 1996-1999. With this submission,
appellee has substantially complied with its duty to submit its financial
report for the said period. To rule differently would be to preclude the
union, after having failed to meet its periodic obligations promptly, from
taking appropriate measures to correct its omissions. For the record, we
do not view with favor appellee's late submission. Punctuality on the part
of the union and its officers could have prevented this petition. 41

WHEREFORE, premises considered, the Court of Appeals Decision dated

May 30, 2005 and Resolution dated June 4, 2007 are AFFIRMED.

SO ORDERED.

||| (Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant
and Allied Industries-Heritage Hotel Manila Supervisors Chapter, G.R. No.
178296, [January 12, 2011], 654 PHIL 395-413)

G.R. No. 160352. July 23, 2008.]

REPUBLIC OF THE PHILIPPINES, represented by Department of

Labor and Employment
(DOLE), petitioner, vs. KAWASHIMA TEXTILE MFG., PHILIPPINES,
INC., respondent.

D E CI S IO N

AUSTRIA-MARTINEZ, J : p

The Republic of the Philippines assails by way of Petition for Review

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

The relevant facts are of record.

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

Respondent filed a Motion to Dismiss 8 the petition on the ground that

KFWU did not acquire any legal personality because its membership of mixed
rank-and-file and supervisory employees violated Article 245 of the Labor
Code,and its failure to submit its books of account contravened the ruling of
the Court in Progressive Development Corporation v. Secretary, Department
of Labor and Employment. 9

In an Order dated May 17, 2000, Med-Arbiter Bactin found KFWU's

legal personality defective and dismissed its petition for certification election,
thus:

We scrutinize the facts and evidences presented by the parties

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

xxx xxx xxx

Since petitioner's members are mixture of rank and file and

supervisory employees, petitioner union, at this point [in] time, has not
attained the status of a legitimate labor organization. Petitioner should
first exclude the supervisory employees from it membership before it can
attain the status of a legitimate labor organization. The above judgment
is supported by the decision of the Supreme Court in the Toyota

Case 10 wherein the High Tribunal ruled: ACcHIa

"As respondent union's membership list contains the names of at

least twenty seven (27) supervisory employees in Level Five
Positions, the union could not prior to purging itself of its
supervisory employee members, attain the status of a legitimate
labor organization. Not being one, it cannot possess the requisite
personality to file a petition for certification election."
(Underscoring omitted.)

xxx xxx xxx

Furthermore, the commingling of rank and file and supervisory

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

1998 11 . . ..
 xxx xxx xxx

WHEREFORE, premises considered, the petition for certification

election is hereby dismissed for lack of requisite legal status of petitioner
to file this instant petition.

SO ORDERED. 12 (Emphasis supplied)

On the basis of the aforecited decision, respondent filed with DOLE

Regional Office No. IV a Petition for Cancellation of Charter/Union
Registration of KFWU, 13the final outcome of which, unfortunately, cannot
be ascertained from the records.

Meanwhile, KFWU appealed 14 to the DOLE which issued a Decision on

August 18, 2000, the dispositive portion of which reads:

WHEREFORE, the appeal is GRANTED. The Order dated 17 May

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

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

and IATSHE

2. No union.

Pursuant to Rule XI, Section 11.1 of the New Implementing Rules,

the employer is hereby directed to submit to the office of origin the
certified list of current employees in the bargaining unit for the last
three months prior to the issuance of this decision.

SO DECIDED. 15

The DOLE held that Med-Arbiter Bactin's reliance on the decisions of

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

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

Respondent filed a Motion for Reconsideration 20 but the DOLE denied

the same in its September 28, 2000 Resolution. 21

However, on appeal by respondent, the CA rendered the December 13,

2002 Decision assailed herein, reversing the August 18, 2000 DOLE Decision,
thus:

Since respondent union clearly consists of both rank and file and
supervisory employees, it cannot qualify as a legitimate labor
organization imbued with the requisite personality to file a petition for
certification election. This infirmity in union membership cannot be
corrected in the inclusion-exclusion proceedings during the pre-election
conference.
 Finally, contrary to the pronouncement of public respondent, the
application of the doctrine enunciated in Toyota Motor Philippines
Corporation vs. Toyota Motor Philippines Corporation Labor Union was
not construed in a way that effectively denies the fundamental right of
respondent union to organize and seek bargaining representation . . . .

For ignoring jurisprudential precepts on the matter, the Court

finds that the Undersecretary of Labor, acting under the authority of
the Secretary of Labor, acted with grave abuse of discretion amounting
to lack or excess of jurisdiction. DcAaSI

WHEREFORE, premises considered, the Petition is hereby

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

SO ORDERED. 22 (Emphasis supplied)

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

The Republic of the Philippines (petitioner) filed the present petition to

seek closure on two issues:

First, whether a mixed membership of rank-and-file and

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

Second, whether the legitimacy of a duly registered labor

organization can be collaterally attacked in a petition for a certification
election through a motion to dismiss filed by an employer such
as Kawashima Textile Manufacturing Phils., Inc. 24
 The petition is imbued with merit.

The key to the closure that petitioner seeks could have

been Republic Act (R.A.) No. 9481. 25 Sections 8 and 9 thereof provide:

Section 8. Article 245 of the Labor Code is hereby amended to

read as follows:

"Art. 245. Ineligibility of Managerial Employees to Join any Labor

Organization; Right of Supervisory Employees. — Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective
bargaining units and/or legitimate labor organizations of their own.
The rank and file union and the supervisors' union operating within
the same establishment may join the same federation or national
union." HaIATC

Section 9. A new provision, Article 245-A is inserted into the

Labor Code to read as follows:

"Art. 245-A. Effect of Inclusion as Members of Employees Outside

the Bargaining Unit. — The inclusion as union members of
employees outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said
union." (Emphasis supplied)

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

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

Sec. 4. A new provision is hereby inserted into the Labor Code as

Article 238-A to read as follows:

"Art. 238-A. Effect of a Petition for Cancellation of Registration.

— A petition for cancellation of union registration shall not suspend
 the proceedings for certification election nor shall it prevent the
filing of a petition for certification election.

In case of cancellation, nothing herein shall restrict the right of the

union to seek just and equitable remedies in the appropriate
courts." (Emphasis supplied)

Furthermore, under Section 12 of R.A. No. 9481, employers have no

personality to interfere with or thwart a petition for certification election
filed by a legitimate labor organization, to wit:

Sec. 12. A new provision, Article 258-A is hereby inserted into

the Labor Code to read as follows: ETHaDC

"Art. 258-A. Employer as Bystander. — In all cases, whether the

petition for certification election is filed by an employer or a
legitimate labor organization, the employer shall not be considered
a party thereto with a concomitant right to oppose a petition for
certification election. The employer's participation in such
proceedings shall be limited to: (1) being notified or informed of
petitions of such nature; and (2) submitting the list of employees
during the pre-election conference should the Med-Arbiter act
favorably on the petition." (Emphasis supplied)

However, R.A. No. 9481 took effect only on June 14, 2007; 26 hence,
it applies only to labor representation cases filed on or after said date. 27 As
the petition for certification election subject matter of the present petition
was filed by KFWU on January 24, 2000, 28 R.A. No. 9481 cannot apply to
it. There may have been curative labor legislations 29 that were given
retrospective effect, 30 but not the aforecited provisions of R.A. No. 9481, for
otherwise, substantive rights and interests already vested would be impaired
in the process. 31

Instead, the law and rules in force at the time of the filing by KFWU of
the petition for certification election on January 24, 2000 are R.A. No.
6715, 32 amending Book V of Presidential Decree (P.D.) No. 442 (Labor
Code), 33 as amended, and the Rules and Regulations Implementing R.A. No.
6715, 34 as amended by Department Order No. 9, series of 1997. 35

It is within the parameters of R.A. No. 6715 and the Implementing

Rules that the Court will now resolve the two issues raised by petitioner. DHSaCA

If there is one constant precept in our labor laws — be

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

One area of contention has been the composition of the membership of

a labor organization, specifically whether there is a mingling of supervisory
and rank-and-file employees and how such questioned mingling affects its
legitimacy.

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

Sec. 3. Employees' right to self-organization. — Employees shall

have the right to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage
in concerted activities for the purpose of collective bargaining and other
mutual aid or protection. Individuals employed as supervisors shall not
be eligible for membership in a labor organization of employees under
their supervision but may form separate organizations of their own.
(Emphasis supplied)
 Nothing in R.A. No. 875, however, tells of how the questioned mingling
can affect the legitimacy of the labor organization. Under Section 15, the
only instance when a labor organization loses its legitimacy is when it violates
its duty to bargain collectively; but there is no word on whether such
mingling would also result in loss of legitimacy. Thus, when the issue of
whether the membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came before the Court En
Banc in Lopez v. Chronicle Publication Employees Association, 41 the
majority pronounced: CScTED

It may be observed that nothing is said of the effect of such

ineligibility upon the union itself or on the status of the other qualified
members thereof should such prohibition be disregarded. Considering
that the law is specific where it intends to divest a legitimate labor
union of any of the rights and privileges granted to it by law, the
absence of any provision on the effect of the disqualification of one of its
organizers upon the legality of the union, may be construed to confine
the effect of such ineligibility only upon the membership of the
supervisor. In other words, the invalidity of membership of one of the
organizers does not make the union illegal, where the requirements of
the law for the organization thereof are, nevertheless, satisfied and

met. 42 (Emphasis supplied)

Then the Labor Code was enacted in 1974 without reproducing Sec. 3
of R.A. No. 875. The provision in the Labor Code closest to Sec. 3 is Article
290, 43 which is deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one labor organization.
Even the Omnibus Rules Implementing Book V of the Labor
Code 44 (Omnibus Rules) merely provides in Section 11, Rule II, thus:

Sec. 11. Supervisory unions and unions of security guards to cease

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

Members of supervisory unions who do not fall within the

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

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

While amending certain provisions of Book V of the Labor Code,E.O. No.

111 and its implementing rules 46 continued to recognize the right of
supervisory employees, who do not fall under the category of managerial
employees, to join a rank-and-file labor organization. 47

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

Sec. 18. Article 245 of the same Code, as amended, is hereby

further amended to read as follows:

"Art. 245. Ineligibility of managerial employees to join any labor

organization; right of supervisory employees. Managerial employees
are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees
 but may join, assist or form separate labor organizations of their
own." (Emphasis supplied)

Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying
the exact effect any violation of the prohibition would bring about on the
legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing the
following amendment to Rule II (Registration of Unions):

Sec. 1. Who may join unions. — . . . Supervisory employees and

security guards shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own; Provided, that those
supervisory employees who are included in an existing rank-and-file
bargaining unit, upon the effectivity of Republic Act No. 6715, shall
remain in that unit . . . . (Emphasis supplied)

and Rule V (Representation Cases and Internal-Union Conflicts) of the

Omnibus Rules, viz.:

Sec. 1. Where to file. — A petition for certification election may

be filed with the Regional Office which has jurisdiction over the principal
office of the employer. The petition shall be in writing and under oath.

Sec. 2. Who may file. — Any legitimate labor organization or the

employer, when requested to bargain collectively, may file the petition.

The petition, when filed by a legitimate labor organization, shall

contain, among others:

xxx xxx xxx

(c) description of the bargaining unit which shall be the employer

unit unless circumstances otherwise require; and provided further,
that the appropriate bargaining unit of the rank-and-file
employees shall not include supervisory employees and/or security
guards. (Emphasis supplied)
 By that provision, any questioned mingling will prevent an otherwise
legitimate and duly registered labor organization from exercising its right to
file a petition for certification election. TEaADS

Thus, when the issue of the effect of mingling was brought to the fore
in Toyota, 48 the Court, citing Article 245 of the Labor Code, as amended
by R.A. No. 6715, held:

Clearly, based on this provision, a labor organization composed of

both rank-and-file and supervisory employees is no labor organization
at all. It cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which carries a mixture of
rank-and-file and supervisory employees cannot possess any of the
rights of a legitimate labor organization, including the right to file a
petition for certification election for the purpose of collective bargaining.
It becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of any
labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.

xxx xxx xxx

In the case at bar, as respondent union's membership list contains

the names of at least twenty-seven (27) supervisory employees in Level
Five positions, the union could not, prior to purging itself of its
supervisory employee members, attain the status of a legitimate labor
organization. Not being one, it cannot possess the requisite personality

to file a petition for certification election. 49 (Emphasis supplied)

In Dunlop, 50 in which the labor organization that filed a petition for

certification election was one for supervisory employees, but in which the
membership included rank-and-file employees, the Court reiterated that
such labor organization had no legal right to file a certification election to
represent a bargaining unit composed of supervisors for as long as it counted
rank-and-file employees among its members. 51
 It should be emphasized that the petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules was applied in
both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was
further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2 (c) of
the 1989 Amended Omnibus Rules — that the petition for certification
election indicate that the bargaining unit of rank-and-file employees has not
been mingled with supervisory employees — was removed. Instead, what the
1997 Amended Omnibus Rules requires is a plain description of the
bargaining unit, thus: TEHIaD

Rule XI
Certification Elections

xxx xxx xxx

Sec. 4. Forms and contents of petition. — The petition shall be in

writing and under oath and shall contain, among others, the
following: . . . (c) The description of the bargaining unit. 52

In Pagpalain Haulers, Inc. v. Trajano, 53 the Court had occasion to

uphold the validity of the 1997 Amended Omnibus Rules, although the
specific provision involved therein was only Sec. 1, Rule VI, to wit:

Sec. 1. Chartering and creation of a local/chapter. — A duly

registered federation or national union may directly create a
local/chapter by submitting to the Regional Office or to the Bureau two
(2) copies of the following: a) a charter certificate issued by the
federation or national union indicating the creation or establishment of
the local/chapter; (b) the names of the local/chapter's officers, their
addresses, and the principal office of the local/chapter; and (c) the
local/chapter's constitution and by-laws; provided that where the
 local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under

oath by the Secretary or the Treasurer of the local/chapter and
attested to by its President.

which does not require that, for its creation and registration, a local or
chapter submit a list of its members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay

Highlands Employees Union-PGTWO 54 in which the core issue was whether
mingling affects the legitimacy of a labor organization and its right to file a
petition for certification election. This time, given the altered legal milieu, the
Court abandoned the view inToyota and Dunlop and reverted to its
pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects
thereof. 55 Thus, the Court held that after a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such mingling
was brought about by misrepresentation, false statement or fraud under
Article 239 of the Labor Code.56 DISHEA

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue

Packing Products Plants-San Miguel Packaging Products-San Miguel Corp.
Monthlies Rank-and-File Union-FFW, 57 the Court explained that since the
1997 Amended Omnibus Rules does not require a local or chapter to provide
a list of its members, it would be improper for the DOLE to deny recognition
to said local or chapter on account of any question pertaining to its individual
members. 58
 More to the point is Air Philippines Corporation v. Bureau of Labor
Relations, 59 which involved a petition for cancellation of union registration
filed by the employer in 1999 against a rank-and-file labor organization on
the ground of mixed membership: 60 the Court therein reiterated its ruling
in Tagaytay Highlands that the inclusion in a union of disqualified employees
is not among the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 239 of the Labor Code.61

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
Miguel and Air Philippines, had already set the tone for
it. Toyota and Dunlop no longer hold sway in the present altered state of the
law and the rules. ACIDSc

Consequently, the Court reverses the ruling of the CA and reinstates

that of the DOLE granting the petition for certification election of KFWU.

Now to the second issue of whether an employer like respondent may

collaterally attack the legitimacy of a labor organization by filing a motion to
dismiss the latter's petition for certification election.

Except when it is requested to bargain collectively, 62 an employer is a

mere bystander to any petition for certification election; such proceeding is
non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their collective
bargaining with the employer. 63 The choice of their representative is the
exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; 64 not even a mere allegation
that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to
block the certification election. 65 The employer's only right in the proceeding
is to be notified or informed thereof. 66
 The amendments to the Labor Code and its implementing rules have
buttressed that policy even more.

WHEREFORE, the petition is GRANTED. The December 13, 2002

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

No costs.

SO ORDERED.

||| (Republic v. Kawashima Textile Mfg., Philippines, Inc., G.R. No. 160352, [July
23, 2008], 581 PHIL 359-381)

[G.R. No. 192648. March 15, 2017.]

DE OCAMPO MEMORIAL SCHOOLS,

INC., petitioner, vs. BIGKIS MANGGAGAWA
SA DE OCAMPO MEMORIAL SCHOOL, INC., respondent.

DECISION

JARDELEZA, J : p

This is a Petition for Review on Certiorari 1 assailing the Court of

Appeals (CA) Decision 2 dated July 15, 2009 and the Resolution 3 dated
June 21, 2010 (assailed Decision). The assailed Decision affirmed the
Decision 4 dated December 29, 2004 of the Bureau of Labor Relations (BLR),
Department of Labor and Employment (DOLE) in Case No.
BLR-A-C-75-824-04, In Re: Petition for Cancellation of Union
Registration of Bigkis Manggagawa sa De Ocampo Memorial School,
Inc.-Lakas Union Registration Number (NCR-I2-CC-002-2003).

De Ocampo Memorial Schools, Inc. (De Ocampo) is a domestic

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

On September 26, 2003, Union Registration No.

NCR-UR-9-3858-2002 was issued in favor of Bigkis Manggagawa
sa De Ocampo Memorial Medical Center-LAKAS (BMDOMMC). 6

Later, on December 5, 2003, Bigkis Manggagawa

sa De Ocampo Memorial School, Inc. (BMDOMSI) was issued a Union
Registration/Certificate of Creation of Local Chapter No.
NCR-12-CC-002-2003 and declared a legitimate labor organization. 7

On March 4, 2004, De Ocampo filed a Petition for Cancellation of

Certificate of Registration 8 with the Department of Labor and
Employment-National Capital Region (DOLE-NCR). It sought to cancel the
Certificate of Registration of BMDOMSI on the following grounds: 1)
misrepresentation, false statement and fraud in connection with its creation
and registration as a labor union as it shared the same set of officers and
members with BMDOMMC; 2) mixed membership of rank-and-file and
managerial/supervisory employees; and 3) inappropriate bargaining unit. 9

On April 13, 2004, De Ocampo filed a Supplemental

Petition, 10 informing the DOLE-NCR of the cancellation of the Certificate of
Registration of BMDOMMC in Case No. NCR-OD-0307-009-LRD. It
attached a copy of the Decision 11 of the DOLE-NCR dated March 3, 2004,
which cancelled and struck off Union Registration No.
NCR-UR-9-3858-2002 from the registry of legitimate labor organizations
for being an inappropriate bargaining unit. 12

On May 18, 2004, BMDOMSI filed its Comment-Opposition to Petition

for Cancellation of Certificate of Registration and Supplemental
Petition, 13 denying DeOcampo's allegations and claiming that the latter
only wants to impede the formation of the union.

In a Decision 14 dated July 26, 2004, Acting Regional Director Ciriaco

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

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

In a Decision 19 dated December 29, 2004, the BLR reversed the

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

De Ocampo filed a Petition for Certiorari 24 with the CA seeking to

annul and set aside the BLR Decision as well as the Resolution 25 dated
January 24, 2005 denying its motion for reconsideration.

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

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

De Ocampo filed a motion for reconsideration which was denied in the

assailed Resolution dated June 21, 2010. Hence, this petition.
 De Ocampo maintains that BMDOMSI committed misrepresentation
and fraud in connection with its application, creation and registration. It
intentionally suppressed the fact that at the time of its application, there was
another union known as BMDOMMC, with whom they shared the same set of
officers and members.32 It was also made to appear that BMDOMMC is a
labor union representing a separate bargaining unit whose personality, affairs
and composition are unknown to BMDOMSI. 33 Lastly, BMDOMSI suppressed
the fact that its members have no mutuality or commonality of interest as
they belong to different work classifications, nature and designations. 34

II

We deny the petition.

Article 247, previously Article 239 of the Labor Code 35 provides:

Art. 247. Grounds for Cancellation of Union Registration. — The

following may constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection

with the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection

with the election of officers, minutes of the election of officers, and the
list of voters;

(c) Voluntary dissolution by the members.

For fraud and misrepresentation to constitute grounds for cancellation

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

De Ocampo insists that "by conveniently disregarding" BMDOMMC's

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

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

Further, the members appearing in the Minutes of the General

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

Moreover, there is nothing in the form "Report of Creation of Local

Chapter" that requires the applicant to disclose the existence of another union,
much less the names of the officers of such other union. Thus, we cannot see
how BMDOMSI made the alleged misrepresentation or false statements in its
application.

De Ocampo likewise claims that BMDOMSI committed fraud and

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

We disagree.

While the CA may have ruled that there is no mutuality or commonality

of interests among the members of BMDOMSI, this is not enough reason to
cancel its registration. The only grounds on which the cancellation of a union's
registration may be sought are those found in Article 247 of the Labor Code.
In Tagaytay Highlands International Golf Club Incorporated v. Tagaytay
Highlands Employees Union-PTGWO, 42 we ruled that "[t]he inclusion in a
union of disqualified employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation, false statement or fraud
under the circumstances enumerated in Sections (a) and (c) of Article [247]
x x x of the Labor Code." 43 Thus, for purposes of de-certifying a union, it is
not enough to establish that the rank-and-file union includes ineligible
employees in its membership. Pursuant to paragraphs (a) and (b) of Article
247 of the Labor Code, it must be shown that there was misrepresentation,
false statement or fraud in connection with: (1) the adoption or ratification
of the constitution and by-laws or amendments thereto; (2) the minutes of
ratification; (3) the election of officers; (4) the minutes of the election of
officers; and (5) the list of voters. 44 Failure to submit these documents
together with the list of the newly elected-appointed officers and their postal
addresses to the BLR may also constitute grounds for cancellation, lack of
mutuality of interests, however, is not among said grounds. 45

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

A final word. A party seeking the cancellation of a union's certificate of

registration must bear in mind that:

x x x [A] direct challenge to the legitimacy of a labor organization

based on fraud and misrepresentation in securing its certificate of
registration is a serious allegation which deserves careful scrutiny.
Allegations thereof should be compounded with supporting
circumstances and evidence. The records of the case are devoid of such
evidence. Furthermore, this Court is not a trier of facts, and this
 doctrine applies with greater force in labor cases. Findings of fact of
administrative agencies and quasi-judicial bodies, such as the BLR,
which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only great respect but even
finality. 47

WHEREFORE, the petition is hereby DENIED for lack of merit. The

Decision of the Court of Appeals in CA-G.R. SP No. 89162 dated July 15,
2009 is AFFIRMED.

SO ORDERED.

||| (De Ocampo Memorial Schools, Inc. v. Bigkis Manggagawa sa De Ocampo

Memorial School, Inc., G.R. No. 192648, [March 15, 2017])

[G.R. No. 170112. April 30, 2008.]

DEL PILAR ACADEMY, EDUARDO ESPEJO and ELISEO OCAMPO,

JR., petitioners, vs. DEL PILAR ACADEMY EMPLOYEES
UNION, respondent.

D E CI S IO N

NACHURA, J : p

Before this Court is a petition for review on certiorari assailing the July
19, 2005 Decision 1 of the Court of Appeals (CA) in CA-G.R. SP. No. 86868,
and its September 28, 2005 Resolution 2 denying the motion for
reconsideration.

Following are the factual antecedents.

Respondent Del Pilar Academy Employees Union (the UNION) is the

certified collective bargaining representative of teaching and non-teaching
personnel of petitioner Del Pilar Academy (DEL PILAR), an educational
institution operating in Imus, Cavite.

On September 15, 1994, the UNION and DEL PILAR entered into a
Collective Bargaining Agreement (CBA) 3 granting salary increase and other
benefits to the teaching and non-teaching staff. Among the salient provisions
of the CBA are:

ARTICLE V

SALARY INCREASE

SECTION 1. Basic Pay — the ACADEMY and the UNION agreed

to maintain the wage increase in absolute amount as programmed in
the computation prepared by the ACADEMY and dated 30 June 1994
initialed by the members of the bargaining panel of both parties, taking
into account increases in tuition fees, if any.

SECTION 2. The teaching load of teachers shall only be

Twenty-Three (23) hours per week effective this school year and any
excess thereon shall be considered as overload with pay.

SECTION 3. Overloadpay (sic) will be based on the Teachers' Basic

Monthly Rate.

SECTION 4. The ACADEMY agrees to grant longevity pay as

follows: P100.00 for every 5 years of continuous service. The longevity
shall be integrated in the basic salary within three (3) years from the
effectivity of this agreement.

ARTICLE VI

VACATION LEAVE WITH PAY

SECTION 1. Every faculty member who has rendered at least six

(6) consecutive academic semester of service shall be entitled to the
11th month and 12th month pay as summer vacation leave with pay.
They may, however, be required to report [and] undergo briefings or
seminars in connection with their teaching assignments for the ensuing
school year.
 SECTION 2. Non-teaching employees who shall have rendered at
least one (1) year of service shall be entitled to fifteen days leave with
pay.

The UNION then assessed agency fees from non-union employees, and
requested DEL PILAR to deduct said assessment from the employees' salaries
and wages. DEL PILAR, however, refused to effect deductions claiming that
the non-union employees were not amenable to it.

In September 1997, the UNION negotiated for the renewal of the

CBA. DEL PILAR, however, refused to renew the same unless the provision
regarding entitlement to two (2) months summer vacation leave with pay
will be amended by limiting the same to teachers, who have rendered at least
three (3) consecutive academic years of satisfactory service. The UNION
objected to the proposal claiming diminution of benefits. DEL PILAR refused
to sign the CBA, resulting in a deadlock. The UNION requested DEL PILAR to
submit the case for voluntary arbitration, but the latter allegedly refused,
prompting the UNION to file a case for unfair labor practice with the Labor
Arbiter against DEL PILAR; Eduardo Espejo, its president; and Eliseo
Ocampo, Jr., chairman of the Board of Trustees.

Traversing the complaint, DEL PILAR denied committing unfair labor

practices against the UNION. It justified the non-deduction of the agency fees
by the absence of individual check-off authorization from the non-union
employees. As regards the proposal to amend the provision on summer
vacation leave with pay,DEL PILAR alleged that the proposal cannot be
considered unfair for it was done to make the provision of the CBA
conformable to the DECS' Manual of Regulations for Private Schools. 4

On October 2, 1998, Labor Arbiter Nieves V. De Castro rendered a

Decision, viz.:

Reviewing the records of this case and the law relative to the
issues at hand, we came to the conclusion that it was an error on [the]
part of [DEL PILAR] not to have collected agency fee due other workers
who are non-union members but are included in the bargaining unit
being represented by [the UNION]. True enough as was correctly quoted
by [the UNION] Art. 248, to wit:

Employees of an appropriate collective bargaining unit who are not

members of the recognized collective bargaining agency may be
assessed a reasonable fee equivalent to the dues and other fees paid
by members of the recognized collective bargaining agreement:
Provided, that the individual authorization required under Article
[241], paragraph (o) of this Code shall not apply to the
non-members of the recognized collective bargaining agent.

As it is, [DEL PILAR's] unwarranted fear (sic) re-individual dues

[without] authorization for non-union members has no basis in fact or
in law. For receipt of CBA benefits brought about by the CBA negotiated
with [petitioners], they are duty bound to pay agency fees which may
lawfully be deducted sans individual check-off authorization. Being
[recipients] of said benefits, they should share and be made to pay the
same considerations imposed upon the union members. [DEL PILAR],
therefore, was in error in refusing to deduct corresponding agency fees
which lawfully belongs to the union.

Anent the proposal to decrease the coverage of the 11th and

12th month vacation with pay, we do not believe that such was done in
bad faith but rather in an honest attempt to make perfect procession
following the DECS' Manuals. Moreso, it is of judicial notice that in the
course of negotiation, almost all provisions are up for grabs,
amendments or change. This is something normal in the course of a
negotiation and does not necessarily connote bad faith as each every one
(sic) has the right to negotiate reward or totally amend the provisions
of the contract/agreement.

All told while there was error on [the] part of [DEL PILAR] for
the first issue, [it] came through in the second. But as it is, we do not
believe that a finding of unfair labor practice can be had considering the
lack of evidence on record that said acts were done to undermine the
 union or stifle the member's right to self organization or that the
[petitioners] were in bad faith. If at all, it's (sic) error may have been
the result of a mistaken notion that individual check-off authorization
is needed for it to be able to validly and legally deduct assessment
especially after individual[s] concerned registered their objection. On
the other hand (sic), it is not error to negotiate for a better term in the
CBA. So long as [the] parties will agree. It must be noted that a CBA is
a contract between labor and management and is not simply a litany of
benefits for labor. Moreso, for unfair labor practice to prosper, there
must be a clear showing of acts aimed at stifling the worker's right to
self-organization. Mere allegations and mistake (sic) notions would not
suffice.

ACCORDINGLY, premises considered, the charge of unfair labor

practice is hereby Dismissed for want of basis.

SO ORDERED. 5

On appeal, the National Labor Relations Commission (NLRC) affirmed

the Arbiter's ruling. In gist, it upheld the UNION's right to agency fee, but did
not considerDEL PILAR's failure to deduct the same an unfair labor
practice. 6

The UNION's motion for reconsideration having been denied, 7 it then

went to the CA via certiorari. On July 19, 2005, the CA rendered the
assailed decision, affirming with modification the resolutions of the NLRC.
Like the Arbiter and the NLRC, the CA upheld the UNION's right to collect
agency fees from non-union employees, but did not
adjudge DEL PILAR liable for unfair labor practice. However, it
ordered DEL PILAR to deduct agency fees from the salaries of non-union
employees.

The dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the petition is PARTIALLY

GRANTED. The assailed resolution of the NLRC dated April 30, 2004 is
hereby MODIFIED. Private respondent Del Pilar Academy is ordered to
 deduct the agency fees from non-union members who are recipients of
the collective bargaining agreement benefits. The agency fees shall be
equivalent to the dues and other fees paid by the union members.

SO ORDERED. 8

DEL PILAR filed a motion for reconsideration of the decision, but the CA
denied the same on September 28, 2005. 9

Before us, DEL PILAR impugns the CA Decision on the following

grounds:

I. IN PROMULGATING THE CHALLENGED DECISION AND RESOLUTION,

THE HON. COURT OF APPEALS DISREGARDED THE FACT THAT
THE ANNUAL INCREASE IN THE SALARIES OF THE EMPLOYEES
WAS NOT A BENEFIT ARISING FROM A COLLECTIVE
BARGAINING AGREEMENT, BUT WAS MANDATED BY THE
DIRECTIVE OF A GOVERNMENTAL DEPARTMENT; and

II. CONSIDERING THE ANNUAL SALARY INCREASE OF NON-UNION

MEMBERS WAS NOT A BENEFIT ARISING FROM THE CBA, THEIR
INDIVIDUAL WRITTEN AUTHORIZATIONS ARE STILL REQUIRED
TO ALLOW PETITIONER ACADEMY TO LEGALLY DEDUCT THE
SAME FROM THEIR RESPECTIVE SALARY. 10

The issue here boils down to whether or not the UNION is entitled to
collect agency fees from non-union members, and if so, whether an
individual written authorization is necessary for a valid check off.

The collection of agency fees in an amount equivalent to union dues and

fees, from employees who are not union members, is recognized by Article
248 (e) of the Labor Code, thus:

Employees of an appropriate collective bargaining unit who are

not members of the recognized collective bargaining agent may be
assessed reasonable fees equivalent to the dues and other fees paid by
the recognized collective bargaining agent, if such non-union members
accept the benefits under the collective bargaining agreement. Provided,
 That the individual authorization required under Article 241,
paragraph (o) of this Code shall not apply to the non-members of
recognized collective bargaining agent.

When so stipulated in a collective bargaining agreement or authorized in

writing by the employees concerned, the Labor Code and its Implementing
Rules recognize it to be the duty of the employer to deduct the sum
equivalent to the amount of union dues, as agency fees, from the employees'
wages for direct remittance to the union. The system is referred to as check
off. 11 No requirement of written authorization from the non-union
employees is necessary if the non-union employees accept the benefits
resulting from the CBA. 12

DEL PILAR admitted its failure to deduct the agency fees from the
salaries of non-union employees, but justifies the non-deduction by the
absence of individual written authorization. It posits that Article 248 (e) is
inapplicable considering that its employees derived no benefits from the CBA.
The annual salary increase of its employee is a benefit mandated by law, and
not derived from the CBA. According to DEL PILAR, the Department of
Education, Culture and Sports (DECS) required all educational institutions to
allocate at least 70% of tuition fee increases for the salaries and other benefits
of teaching and non-teaching personnel; that even prior to the execution of
the CBA in September 1994, DEL PILAR have already granting annual
salary increases to its employees. Besides, the non-union employees objected
to the deduction; hence, a written authorization is indispensable to effect a
valid check off. DEL PILAR urges this Court to reverse the CA ruling insofar
as it orders the deduction of agency fees from the salaries of non-union
employees, arguing that such conclusion proceeds from a misplaced premise
that the salary increase has risen from the CBA.

The argument cannot be sustained.

Contrary to what DEL PILAR wants to portray, the grant of annual

salary increase is not the only provision in the CBA that benefited the
non-union employees. The UNION has negotiated for other benefits, namely,
limitations on teaching assignments to 23 hours per week, additional
compensation for overload units or teaching assignments in excess of the 23
hour per week limit, and payment of longevity pay. It has also negotiated for
entitlement to summer vacation leave with pay for two (2) months for
teaching staff who have rendered six (6) consecutive semesters of service. For
the non-teaching personnel, the UNION worked for their entitlement to
fifteen (15) days leave with pay. 13 These provisions in the CBA surely
benefits the non-union employees, justifying the collection of, and the
UNION's entitlement to, agency fees.

Accordingly, no requirement of written authorization from the

non-union employees is needed to effect a valid check off. Article 248 (e)
makes it explicit that Article 241, paragraph (o), 14 requiring written
authorization is inapplicable to non-union members, especially in this case
where the non-union employees receive several benefits under the CBA.

As explained by this Court in Holy Cross of Davao College, Inc. v. Hon.

Joaquin 15 viz.:

The employee's acceptance of benefits resulting from a collective

bargaining agreement justifies the deduction of agency fees from his pay
and the union's entitlement thereto. In this aspect, the legal basis of the
union's right to agency fees is neither contractual nor statutory, but
quasi-contractual, deriving from the established principle that
non-union employees may not unjustly enrich themselves by benefiting
from employment conditions negotiated by the bargaining union.

By this jurisprudential yardstick, this Court finds that the CA did not
err in upholding the UNION's right to collect agency fees.

WHEREFORE, the petition is DENIED. The Decision and Resolution of

the Court of Appeals in CA-G.R. SP No. 86868, are AFFIRMED.

SO ORDERED.
||| (Del Pilar Academy v. Del Pilar Academy Employees Union, G.R. No. 170112,
[April 30, 2008], 576 PHIL 549-557)

[G.R. No. 149763. July 7, 2009.]

EDUARDO J. MARIÑO, JR., MA. MELVYN P. ALAMIS, NORMA P.

COLLANTES, and FERNANDO PEDROSA, petitioners, vs. GIL Y.
GAMILLA, RENE LUIS TADLE, NORMA S. CALAGUAS, MA.
LOURDES C. MEDINA, EDNA B. SANCHEZ, REMEDIOS GARCIA,
MAFEL YSRAEL, ZAIDA GAMILLA, and AURORA
DOMINGO, respondents.

D E CI S IO N

CHICO-NAZARIO, J : p

Assailed in this Petition for Review on Certiorari, 1 under Rule 45 of

the Rules of Court, are (1) the Decision 2 dated 16 March 2001 of the Court
of Appeals in CA-G.R. SP No. 60657, dismissing petitioners' Petition
for Certiorari under Rule 65 of the Rules of Court; and (2) the
Resolution 3 dated 30 August 2001 of the appellate court in the same case
denying petitioners' Motion for Reconsideration.

FACTS

The Petition at bar arose from the following factual and procedural
antecedents.

(1) Case No. NCR-OD-M-9412-022

At the time when the numerous controversies in the instant case first
came about, petitioners Atty. Eduardo J. Mariño, Jr., Ma. Melvyn P. Alamis,
Norma P. Collantes, and Fernando Pedrosa were among the executive officers
and directors (collectively called the Mariño Group) of the University of Sto.
Tomas Faculty Union (USTFU), a labor union duly organized and registered
under the laws of the Republic of the Philippines and the bargaining
representative of the faculty members of the University of Santo Tomas
(UST). 4

Respondents Gil Y. Gamilla, Rene Luis Tadle, Norma S. Calaguas, Ma.

Lourdes C. Medina, Edna B. Sanchez, Remedios Garcia, Mafel Ysrael, Zaida
Gamilla, and Aurora Domingo were UST professors and USTFU members.

The 1986 Collective Bargaining Agreement (CBA) between UST and

USTFU expired on 31 May 1988. Thereafter, bargaining negotiations ensued
between UST and the Mariño Group, which represented USTFU. As the
parties were not able to reach an agreement despite their earnest efforts, a
bargaining deadlock was declared and USTFU filed a notice of strike.
Subsequently, then Secretary of the Department of Labor and Employment
(DOLE) Franklin Drilon assumed jurisdiction over the dispute, which was
docketed as NCMB-NCR-NS-02-117-89. The DOLE Secretary issued an
Order on 19 October 1990, laying the terms and conditions for a new CBA
between the UST and USTFU. In accordance with said Order, the UST and
USTFU entered into a CBA in 1991, which was to be effective for the period
of 1 June 1988 to 31 May 1993 (hereinafter 1988-1993 CBA). In keeping
with Article 253-A 5 of the Labor Code, as amended, the economic
provisions of the 1988-1993 CBA were subject to renegotiation for the
fourth and fifth years. ICDcEA

Accordingly, on 10 September 1992, UST and USTFU executed a

Memorandum of Agreement (MOA), 6 whereby UST faculty members
belonging to the collective bargaining unit were granted additional economic
benefits for the fourth and fifth years of the 1988-1993 CBA, specifically,
the period from 1 June 1992 up to 31 May 1993. The relevant portions of
the MOA read:
 MEMORANDUM OF AGREEMENT

xxx xxx xxx

1.0. The University hereby grants additional benefits to Faculty

Members belonging to the collective bargaining unit as defined in Article I,
Section 1 of the Collective Bargaining Agreement entered into between
the parties herein over and above the benefits now enjoyed by the said
faculty members, which additional benefits shall amount in the aggregate
to P42,000,000.00[.]

2.0. Under this Agreement the University shall grant salary increases, to
wit:

2.1. THIRTY (P30.00) PESOS per lecture unit per month to covered
faculty members retroactive to June 1, 1991;

2.2. Additional THIRTY (P30.00) PESOS per lecture unit per month on
top of the salary increase granted in [paragraph] 2.1 hereof to the
said faculty memberseffective June 1, 1992;

2.3. In the case of a covered faculty member whose compensation is

computed on a basis other than lecture unit per month, he shall receive
salary increases that are equivalent to those provided in paragraphs 2.1
and 2.2 hereof, with the amount of salary increases being arrived at by
using the usual method of computing the said faculty member's basic pay;

3.0. The UNIVERSITY shall likewise restore to the faculty members the
amounts corresponding to the deductions in salary that were taken from
the pay checks in the second half of June, 1989 and in the first half of
July, 1989, provided that said deductions in salary relate to the union
activities that were held in the aforestated payroll periods, and provided
further that the amounts involved shall be taken from the P42 Million
(sic) economic package.

4.0. A portion of the P42,000,000.00 economic package amounting

to P2,000,000.00 shall be used to satisfy all obligations that remained
outstanding and unpaid in the May 17, 1986 Collective Bargaining
Agreement.
5.0. Any unspent balance of the aggregate of P42,000,000.00 as of
October 15, 1992, shall, within two weeks, be remitted to the
Union[:] CSTDIE

5.1. The unspent balance mentioned in paragraph 5.0 inclusive of

earnings but exclusive of check-offs, shall be used for the salary increases
herein granted up to May 31, 1993, for increases in hospitalization,
educational and retirement benefits, and for other economic benefits.

6.0. The benefits herein granted constitute the entire and complete
package of economic benefits granted by the UNIVERSITY to the covered
faculty members for the balance of the term of the existing collective
bargaining agreement.

7.0. It is clearly understood and agreed upon that the aggregate sum of
P42 million is chargeable against the share of the faculty members in the
incremental proceeds of tuition fees collected and still to be collected;
Provided, however, that he (sic) commitment of the UNIVERSITY to pay
the aggregate sum of P42 million shall subsist even if the said amount
exceeds the proportionate share that may accrue to the faculty members
in the tuition fee increases that the UNIVERSITY may be authorized to
collect in School-Year 1992-1993, and, Provided, finally, that the
covered faculty members shall still be entitled to their proportionate
share in any undistributed portion of the incremental proceeds of the
tuition fee increases in School-Year 1992-1993, and incremental
proceeds are, by law and pertinent Department of Education Culture and
Sports (DECS) regulations, required to be allotted for the payment of
salaries, wages, allowances and other benefits of teaching and
non-teaching personnel for the UNIVERSITY.

8.0. With this Agreement, the parties confirm that[:]

8.1. the University has complied with the requirements of the law
relative to the release and distribution of the incremental proceeds of
tuition fee increases as these incremental proceeds pertain to the faculty
share in the tuition fee increase collected during the School-Year
1991-1992; and,
8.2. the economic benefits herein granted constitute the full and
complete financial obligation of the UNIVERSITY to the members of its
faculty for the period June 1, 1991 to May 31, 1993, pursuant to the
provisions of the existing Collective Bargaining Agreement.

9.0. Subject to the provisions of law, and without reducing the amounts
of salary increases granted under paragraphs 2.0, 2.1, 2.2 and 2.3[,] the
UNION shall have the right to a pro-rata lump sum check-off of all sums
of money due and payable to it from the package of economic benefits
granted under this Agreement, provided that there is an authorization of
a majority of the members of the UNION and provided, further, that the
P42 million economic package herein granted shall not in any way be
exceeded. IEAacS

10.0. This Agreement shall be effective for a period of two (2) years,
starting June 1, 1991 and ending on May 31, 1993, provided, however,
that if for any reason no new collective bargaining agreement is entered
into at the expiration date hereof, this Agreement, together with the
March 18, 1991 Collective Bargaining Agreement, shall remain in full
force and effect until such time as a new collective bargaining agreement
shall have been executed by the parties.

xxx xxx xxx

UNIVERSITY OF SANTO TOMAS UST FACULTY UNION

BY: BY:

(signed) (signed)

FR. TERESO M. CAMPILLO, JR., O.P.ATTY. EDUARDO J.

Treasurer MARINO, JR.

President

Attested by[:]
(signed)
REV. FR. ROLANDO DELA ROSA, O.P. (Emphasis ours.)
 On 12 September 1992, the majority of USTFU members signed
individual instruments of ratification, 7 which purportedly signified their
consent to the economic benefits granted under the MOA. Said instruments
uniformly recited:

RATIFICATION OF THE UST-USTFU MEMORANDUM OF AGREEMENT

DATED SEPTEMBER 10, 1992 GRANTING A PACKAGE OF THE P42
MILLION FACULTY BENEFITS WITH PROVISION FOR CHECK-OFF.

September 12, 1992

Date

TO WHOM IT MAY CONCERN:

I, the undersigned UST faculty member, aware that the law requires
ratification and that without ratification by majority of all faculty
members belonging to the collective bargaining unit, the Memorandum of
Agreement between the University of Santo Tomas and the UST Faculty
Union (or USTFU) dated September 10, 1992 may be questioned and all
the faculty benefits granted therein may be cancelled, do hereby ratify
the said agreement.

Under the Agreement, the University shall pay P42 million over a period
of two (2) years from June 1, 1991 up to May 31, 1992. ITDSAE

In consideration of the efforts of the UST Faculty Union as the faculty

members' sole and exclusive collective bargaining representative in
obtaining the said P42 million package of economic benefits, a check-off
of ten percent thereof covering union dues, and special assessment for
Labor Education Fund and attorney's fees from USTFU members and
agency fee from non-members for the period of the Agreement is hereby
authorized to be made in one lump sum effective immediately, provided
that two per cent (sic) shall be for [the] administration of the Agreement
and the balance of eight per cent (sic) shall be for attorney's fees to be
donated, as pledged by the USTFU lawyer to the Philippine Foundation
for the Advancement of the Teaching Profession, Inc. whose principal
purpose is the advancement of the teaching profession and teacher's
 welfare, and provided further that the deductions shall not be taken
from my individual monthly salary but from the total package of P42
million due under the Agreement.

_________________________
Signature of Faculty Member (Emphasis
ours.)

USTFU, through its President, petitioner Atty. Mariño, wrote a

letter 8 dated 1 October 1992 to the UST Treasurer requesting the release to
the union of the sum of P4.2 million, which was 10% of the P42 million
economic benefits package granted by the MOA to faculty members belonging
to the collective bargaining unit. The P4.2 million was sought by USTFU in
consideration of its efforts in obtaining the said P42 million economic benefits
package. UST remitted the sum of P4.2 million to USTFU on 9 October
1992. 9

After deducting from the P42 million economic benefits package the
P4.2 million check-off to USTFU, the amounts owed to UST, and the salary
increases and bonuses of the covered faculty members, a net amount of
P6,389,145.04 remained. The remaining amount was distributed to the
faculty members on 18 November 1994.

On 15 December 1994, respondents 10 filed with the Med-Arbiter,

DOLE-National Capital Region (NCR), a Complaint for the expulsion of the
Mariño Group as USTFU officers and directors, which was docketed as Case
No. NCR-OD-M-9412-022. 11 Respondents alleged in their Complaint that
the Mariño Group violated the rights and conditions of membership in USTFU,
particularly by: 1) investing the unspent balance of the P42 million economic
benefits package given by UST without prior approval of the general
membership; 2) simultaneously holding elections viva voce; 3) ratifying the
CBA involving the P42 million economic benefits package; and 4) approving
the attorney's/agency fees worth P4.2 million in the form of check-off.
Respondents prayed that the Mariño Group be declared jointly and severally
liable for refunding all collected attorney's/agency fees from individual
members of USTFU and the collective bargaining unit; and that, after due
hearing, the Mariño group be expelled as USTFU officers and directors. SCHIac

(2) Case No. NCR-OD-M-9510-028

On 16 December 1994, UST and USTFU, represented by the Mariño

Group, entered into a new CBA, effective 1 June 1993 to 31 May 1998
(1993-1998 CBA). This new CBA was registered with the DOLE on 20
February 1995.

Respondents 12 filed with the Med-Arbiter, DOLE-NCR, on 18 October

1995, another Complaint against the Mariño Group for violation of the
rights and conditions of union membership, which was docketed as Case No.
NCR-OD-M-9510-028. 13 The Complaint primarily sought to invalidate
certain provisions of the 1993-1998 CBA negotiated by the Mariño Group
for USTFU and the registration of said CBA with the DOLE.

(3) Case No. NCR-OD-M-9610-001

On 24 September 1996, petitioner Norma Collantes, as USTFU

Secretary-General, posted notices in some faculty rooms at UST, informing
the union members of a general assembly to be held on 5 October 1996. Part
of the agenda for said date was the election of new USTFU officers. The
following day, 25 September 1996, respondents wrote a letter 14 to the
USTFU Committee on Elections, urging the latter to re-schedule the elections
to ensure a free, clean, honest, and orderly election and to afford the union
members the time to prepare themselves for the same. The USTFU
Committee on Elections failed to act positively on respondents' letter, and
neither did they adopt and promulgate the rules and regulations for the
conduct of the scheduled election.

Thus, on 1 October 1996, respondents 15 filed with the Med-Arbiter,

DOLE-NCR, an Urgent Ex-Parte Petition/Complaint, which was docketed
as Case No. NCR-OD-M-9610-001. 16 Respondents alleged in their
Petition/Complaint that the general membership meeting called by the
USTFU Board of Directors on 5 October 1996, the agenda of which included
the election of union officers, was in violation of the provisions of the
Constitution and By-Laws of USTFU. Respondents prayed that the DOLE
supervise the conduct of the USTFU elections, and that they be awarded
attorney's fees.

On 4 October 1996, the Med-Arbiter DOLE-NCR, issued a Temporary

Restraining Order (TRO) enjoining the holding of the USTFU elections
scheduled the next day.

(4) Case No. NCR-OD-M-9610-016

Also on 4 October 1996, the UST Secretary General headed a general

faculty assembly attended by USTFU members, as well as USTFU
non-members, but who were members of the collective bargaining unit.
During said assembly, respondents were among the elected officers of USTFU
(collectively referred to as the Gamilla Group). Petitioners filed with the
Med-Arbiter, DOLE-NCR, a Petition seeking injunctive reliefs and the
nullification of the results of the 4 October 1994 election. The Petition was
docketed as Case No. NCR-OD-M-9610-016. ITCHSa

In a Decision dated 11 February 1997 in Case No.

NCR-OD-M-9610-016, the Med-Arbiter DOLE-NCR, nullified the election
of the Gamilla Group as USTFU officers on 4 October 1996 for having been
conducted in violation of the Constitution and By-Laws of the union. This
ruling of the Med-Arbiter was affirmed on appeal by the Bureau of Labor
Relations (BLR) in a Resolution issued on 15 August 1997. Respondents were,
thus, prompted to file a Petition for Certiorari before this Court, docketed
as G.R. No. 131235.
 While G.R. No. 131235 was pending, the term of office of the Gamilla
Group as USTFU officers expired on 4 October 1999. The Gamilla Group then
scheduled the next election of USTFU officers on 14 January 2000.

On 16 November 1999, the Court promulgated its Decision in G.R. No.

131235, affirming the BLR Resolution dated 15 August 1997 which ruled
that the purported election of USTFU officers held on 4 October 1996 was
void for violating the Constitution and By-Laws of the union. 17

(5) Case No. NCR-OD-M-9611-009

On 15 November 1996, respondents 18 filed before the Med-Arbiter,

DOLE-NCR, a fourth Complaint/Petition against the Mariño Group, as well
as the Philippine Foundation for the Advancement of the Teaching Profession,
Inc., Security Bank Corporation, and Bank of the Philippine Islands, which
was docketed as Case No. NCR-OD-M-9611-009. 19 Respondents claimed
in their latest Complaint/Petition that they were the legitimate USTFU
officers, having been elected on 4 October 1996. They prayed for an order
directing the Mariño Group to cease and desist from using the name of
USTFU and from performing acts for and on behalf of the USTFU and the
rest of the members of the collective bargaining unit. THIAaD

DOLE Department Order No. 9 took effect on 21 June 1997,

amending the Rules Implementing Book V of the Labor Code, as amended.
Thereunder, jurisdiction over the complaints for any violation of the union
constitution and by-laws and the conditions of union membership was vested
in the Regional Director of the DOLE.20 Pursuant to said Department Order,
all four Petitions/Complaints filed by respondents against the Mariño Group,
particularly, Case No. NCR-OD-M-9412-022, Case No.
NCR-OD-M-9510-028, Case No. NCR-OD-M-9610-001, and Case No.
NCR-OD-M-9611-009 were consolidated and indorsed to the Office of the
Regional Director of the DOLE-NCR.
 On 27 May 1999, the DOLE-NCR Regional Director rendered a
Decision 21 in the consolidated cases in respondents' favor.

In Case No. NCR-OD-M-9412-022 and Case No.

NCR-OD-M-9510-028, the DOLE-NCR Regional Director adjudged the
Mariño Group, as the executive officers of USTFU, guilty of violating the
provisions of the USTFU Constitution and By-laws by failing to collect union
dues and to conduct a general assembly every three months. The DOLE-NCR
Regional Director also ruled that the Mariño Group violated Article 241
(c) 22 and (l) 23 of the Labor Code when they did not submit a list of union
officers to the DOLE; when they did not submit/provide DOLE and the
USTFU members with copies of the audited financial statements of the union;
and when they invested in a bank, without prior consent of USTFU members,
the sum of P9,766,570.01, which formed part of the P42 million economic
benefits package.

Additionally, the DOLE-NCR Regional Director declared that the

check-off of P4.2 million collected by the Mariño Group, as negotiation fees,
was invalid. According to the MOA executed on 10 September 1992 by UST
and USTFU, the P42 million economic benefits package was chargeable
against the share of the faculty members in the incremental proceeds of
tuition fees collected and still to be collected. Under Republic Act No.
6728, 24 70% of the tuition fee increases should be allotted to academic and
non-academic personnel. Given that the records were silent as to how much
of the P42 million economic benefits package was obtained through
negotiations and how much was from the statutory allotment of 70% of the
tuition fee increases, the DOLE-NCR Regional Director held that the entire
amount was within the statutory allotment, which could not be the subject of
negotiation and, thus, could not be burdened by negotiation fees.

The DOLE-NCR Regional Director further found that the principal

subject of Case No. NCR-OD-M-9610-001 (i.e., violation by the Mariño
Group of the provisions on election of officers in the Labor Code and the
USTFU Constitution and By-Laws) had been superseded by the central event
in Case No. NCR-OD-M-9611-009 (i.e.,the subsequent election of another
set of USTFU officers consisting of the Gamilla Group). While there were two
sets of USTFU officers vying for legitimacy, the eventual ruling of the
DOLE-NCR Regional Director, for the expulsion of the Mariño Group from
their positions as USTFU officers, practically extinguished Case No.
NCR-OD-M-9611-009. EacHSA

The decretal portion of the 27 May 1999 Decision of the DOLE-NCR

Regional Director reads:

WHEREFORE, premises considered, judgment is hereby rendered:

a) Expelling [the Mariño Group] from their positions as officers of USTFU,

and hereby order them under pain of contempt, to cease and desist from
performing acts as such officers;

b) Ordering [the Mariño Group] to jointly and severally refund to USTFU

the amount of P4.2 M checked-off as attorney's fees from the P42 M
economic package;

c) Ordering [the Mariño Group] to account for:

c.1. P2.0 M paid to USTFU in satisfaction of the remaining

obligation of the University under the 1986 CBA;

c.2. P7.0 M as consideration of the Compromise Agreement

entered into by USTFU involving certain labor cases;

c.3. Interest/earnings of the P9,766,570.01 balance of the P42 M

invested/deposited by [the Mariño Group] with the PCI
Capital Corporation.

d) Ordering conduct of election of Union officers under the supervision of

this Department. 25

Petitioners interposed an appeal 26 before the BLR, which was docketed

as BLR-A-TR-52-25-10-99.
 In the meantime, the election of USTFU officers was held as scheduled
on 14 January 2000, 27 in which the Gamilla Group claimed victory. 28 On
3 March 2000, the Gamilla group, as the new USTFU officers, entered into a
Memorandum of Agreement 29 with the UST, which provided for the
economic benefits to be granted to the faculty members of the UST for the
years 1999-2001. Said Agreement was ratified by the USTFU members on
9 March 2000.

On the same day, 9 March 2000, the BLR promulgated its

Decision 30 in BLR-A-TR-52-25-10-99, the fallo of which provides:

WHEREFORE, the appeal is GRANTED IN PART. Accordingly, the

decision appealed from is hereby MODIFIED to the effect that appellant
USTFU officers are hereby ordered to return to the general membership
the amount of P4.2 million they have collected by way of attorney's fees.

Let the entire records of this case be remanded to the Regional Office of
origin for the immediate conduct of election of officers of USTFU. The
election shall be held under the control and supervision of the Regional
Office, in accordance with Section 1 (b), Rule XV of Department Order
No. 9, unless the parties mutually agree to a different procedure
consistent with ensuring integrity and fairness in the electoral
exercise. TSEHcA

The BLR found no basis for the order of the DOLE-NCR Regional
Director to the Mariño Group to account for the amounts of P2 million and
P7 million supposedly paid by UST to USTFU. The BLR clarified that UST
paid USTFU a lump sum of P7 million. The P2 million of this lump sum was
the payment by UST of its outstanding obligations to USTFU under the 1986
CBA. This amount was subsequently donated by USTFU members to the
Philippine Foundation for the Advancement of the Teaching Profession, Inc.
The remaining P5 million of the lump sum was the consideration for the
settlement of an illegal dismissal case between UST and the Mariño Group.
Hence, the P5 million legally belonged to the Mariño Group, and there was no
need to make it account for the same. As to the interest earnings of the sum
of P9,766,570.01 that was invested by the Mariño Group in a bank, the
BLR ruled that the same was included in the amount of P6,389,145.04 that
was distributed to the faculty members on 18 November 1994.

The BLR, however, agreed in the finding of the DOLE-NCR Regional

Director that the P42 million economic benefits package was sourced from
the faculty members' share in the tuition fee increases under Republic Act No.
6728. Under said law, 70% of tuition fee increases shall go to the payment of
salaries, wages, allowances, and other benefits of teaching and non-teaching
personnel. As was held in the decision 31 and subsequent resolution 32 of the
Supreme Court in Cebu Institute of Technology v. Ople, the law has already
provided for the minimum percentage of tuition fee increases to be allotted
for teachers and other school personnel. This allotment is mandatory and
cannot be diminished, although it may be increased by collective bargaining.
It follows that only the amount beyond that mandated by law shall be subject
to negotiation fees and attorney's fees for the simple reason that it was only
this amount that the school employees had to bargain for.

The BLR further reasoned that the P4.2 million collected by the Mariño
Group was in the nature of attorney's fees or negotiation fees and, therefore,
fell under the general prohibition against such fees in Article 222 (b) 33 of the
Labor Code, as amended. Also, the exception to charging against union funds
was not applicable because the P42 million economic benefits package under
the 10 September 1992 MOA was not union fund, as the same was intended
not for the union coffers, but for the members of the entire bargaining unit.
The fact that the P4.2 million check-off was approved by the majority of
USTFU members was immaterial in view of the clear command of Article
222 (b) that any contract, agreement, or arrangement of any sort, contrary
to the prohibition contained therein, shall be null and void.

Lastly, as to the alleged failure of the Mariño Group to perform some of

its duties, the BLR held that the change of USTFU officers can best be decided,
not by outright expulsion, but by the general membership through the actual
conduct of elections.

Petitioners' Motion for Partial Reconsideration 34 of the foregoing

Decision was denied by the BLR in a Resolution 35 dated 13 June 2000.

Aggrieved once again, petitioners filed with the Court of Appeals a

Petition for Certiorari 36 under Rule 65 of the Rules of Court, which was
docketed as CA-G.R. SP No. 60657. In a Resolution dated 26 September
2000, the Court of Appeals directed respondents to file their Comment; and,
in order not to render moot and academic the issues in the Petition, enjoined
respondents and all those acting for and on their behalf from enforcing,
implementing, and effecting the BLR Decision dated 9 March 2000. IcDCaT

On 16 March 2001, the Court of Appeals rendered its Decision in

CA-G.R. SP No. 60657, favoring respondents.

According to the Court of Appeals, the BLR did not commit grave abuse
of discretion, amounting to lack or excess of jurisdiction, in ruling that the
P42 million economic benefits package was merely the share of the faculty
members in the tuition fee increases pursuant to Republic Act No. 6728. The
appellate court explained:

It is too plain to see that the 60% of the proceeds is to be allocated

specifically for increase in salaries or wages of the members of the faculty
and all other employees of the school concerned. Under Section 5(2)
of Republic Act 6728, the amount had been increased to 70% of the
tuition fee increases which was specifically allocated to the payment of
salaries, wages, allowances and other benefits of teaching and
non-teaching personnel of the school[,] except administrators who are
principal stockholders of the school and to cover increases as provided for
in the collective bargaining agreements existing or in force at the time
the law became effective[.]

xxx xxx xxx

It is too plain to see, too, that under the "Memorandum of Agreement"
between UST and the Union, . . ., the P42,000,000.00 economic
package granted by the UST to the Union was in compliance with the
mandates of the law and pertinent Department of Education, Culture
and Sports regulation (sic) required to be allotted following the payment
of salaries, wages, allowances and other benefits of teaching and
non-teaching personnel of the University[.]

xxx xxx xxx

Whether or not UST implemented the mandate of Republic Act

6728 voluntarily or through the efforts and prodding of the Union does
not and cannot change or alter a whit the nature of the economic
package or the purpose or purposes of the allocation of the said amount.
For, if we acquiesced to and sustained Petitioners' stance, we will thereby
be leaving the compliance by the private educational institutions of the
mandate of Republic Act 6728 at the will, mercy, whims and caprices of
the Union and the private educational institution. This cannot and should
not come to pass.

With our foregoing findings and disquisitions, We thus agree with the
[BLR] that the aforesaid amount of P42,000,000.00 should not answer
for any attorney's fees claimed by the Petitioners. . . . .

xxx xxx xxx

Moreover, [Section 5 of Rule X of] the CBL of the Union provides that:

Section 5. Special assessments or other extraordinary fees such as

for payment of attorney's fees shall be made only upon such a
resolution duly ratified by the general membership by secret
balloting. . . . . STaHIC

Also, Article 241(n) 37 of the Labor Code, as amended, provides that no

special assessment shall be levied upon the members of the union unless
authorized by a written resolution of a majority of all the members at a
general membership meeting duly called for the purpose[.]

xxx xxx xxx

 In "ABS-CBN Supervisors-Employees Union Members versus ABS-CBN
Broadcasting Corporation, 304 SCRA 489", our Supreme Court declared
that Article 241(n) of the Labor Code, as amended, speaks of three (3)
requisites, to wit: (1) authorization by a written resolution of the
majority of all members at the general membership meeting 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.

Contrary to the provisions of Articles 222(b) and 241(n) of the Labor

Code, as amended, and Section 5, Rule X of [the] CBL of the Union, no
resolution ratified by the general membership of [the] USTFU through
secret balloting which embodied the award of attorney's fees was
submitted. Instead, the Petitioners submitted copies of the form for the
ratification of the MOA and the check-off for attorney's fees.

xxx xxx xxx

The aforementioned "ratification with check-off" form embodied the: (a)

ratification of the MOA; (b) check-off of union dues; and (c) check-off of
a special assessment,i.e., attorney's fees and labor education fund. . . . .
Patently, the CBL was not complied with.

Worse, the check-off for union dues and attorney's fees were included in
the ratification of the MOA. The members were thus placed in a situation
where, upon ratification of the MOA, not only the check-off of union dues
and special assessment for labor education fund but also the payment of
attorney's fees were (sic) authorized. 38

In like manner, the Court of Appeals found no grave abuse of discretion,

amounting to lack or excess of jurisdiction, on the part of the BLR in ordering
the conduct of elections under the control and supervision of the DOLE-NCR.
Said the appellate court:

We agree with the Petitioners that the elections of officers of the Union,
before the Decision of the [BLR], had been unfettered by any intervention
of the DOLE. However, We agree with the Decision of the [BLR] for two
(2) specific reasons, namely: (a) the parties are given an opportunity to
first agree on a different procedure to ensure the integrity and fairness of
the electoral exercise, before the DOLE, may supervise the election[.] SCaDAE

xxx xxx xxx

Under Article IX of the CBL, the Board of Officers of the Union shall
create a Committee on Elections, Comelec for brevity, composed of a
chairman and two (2) members appointed by the Board of Officers[.]

xxx xxx xxx

It, however, appears that the term of office of the Petitioners had already
expired in September of 1996. In fact, an election of officers was
scheduled on October 6, 1996. However, on October 4, 1996,
[respondents] and the members of the faculty of UST, both union
member and non-union member, elected [respondents] as the new
officers of the USTFU. The same was, however, (sic) nullified by the
Supreme Court, on November 16, 1999. However, as the term of office
of the [respondents] had expired, on October 4, 1999, there is nothing
to nullify anymore. By virtue of an election, held on January 14, 2000,
the [respondents] were elected as the new officers of the Union, which
election was not contested by the Petitioners or any other group in the
union.

xxx xxx xxx

We are thus faced with a situation where one set of officers claim to be
the legitimate and incumbent officers of the Union, pursuant to the CBL
of the Union, and another set of officers who claim to have been elected
by the members of the faculty of the Union thru an election alleged to
have been supervised by the DOLE which situation partakes of and is akin
to the nature of an intra-union dispute[.] . . . .

Undeniably, the CBL gives the Board of Officers the right to create and
appoint members of the Comelec. However, the CBL has no application to
a situation where there are two (2) sets of officers, one set claiming to be
 the legitimate incumbent officers holding over to their positions who have
not exercised their powers and functions therefor and another claiming
to have been elected in an election supervised by the DOLE and, at the
same time, exercising the powers and functions appended to their
positions. In such a case, the BLR, which has jurisdiction over the
intra-union dispute, can validly order the immediate conduct of election
of officers, otherwise, internecine disputes and blame-throwing will
derail an orderly and fair election. Indeed, Section 1(b), [Rule XV], Book
V of the Implementing Rules and Regulations of the Labor Code, as

amended, by Department Order No. 09, Series of 1997, 39 provides

that, in the absence of any agreement among the members or any
provision in the constitution and by-laws of the labor organization, in an
election ordered by the Regional Director, the chairman of the committee
shall be a representative of the Labor Relations Division of the Regional
Office[.] 40

Ultimately, the Court of Appeals decreed:

IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due

course and is hereby DISMISSED. 41

Petitioners moved for reconsideration 42 of the Decision dated 16

March 2001 of the Court of Appeals, but it was denied by the said court in
its Resolution 43dated 30 August 2001. ASTDCH

Petitioners elevated the case to this Court via the instant Petition,
invoking the following assignment of errors:

I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS

COMMITTED SERIOUS ERROR AND GRAVELY ABUSED ITS
DISCRETION WHEN IT UPHELD THE APPLICATION BY THE
HONORABLE DIRECTOR OF THE BUREAU OF LABOR RELATIONS OF
THE PROVISIONS OF REPUBLIC ACT NO. 6728 TO THE P42 MILLION
CBA PACKAGE OF ECONOMIC BENEFITS OBTAINED BY THE UST
FACULTY UNION FROM THE UNIVERSITY OF SANTO TOMAS.
 II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS

COMMITTED SERIOUS ERROR AND GRAVELY ABUSED ITS
DISCRETION WHEN IT DISALLOWED THE LUMP-SUM CHECK-OFF
AMOUNTING TO P4.2 MILLION BY RULING THAT THE P42 MILLION
CBA ECONOMIC PACKAGE OBTAINED BY THE UST FACULTY
UNION WAS MERELY AN ALLOCATION OF THE SEVENTY PER CENT
(70%) OF THE TUITION INCREASES AUTHORIZED BY LAW AND THE
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS.

III.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS

COMMITTED SERIOUS ERROR AND GRAVELY ABUSED ITS
DISCRETION WHEN IT DISREGARDED THE PROVISIONS ON ELECTION
OF UNION OFFICERS IN THE CONSTITUTION AND BY-LAWS OF
THE UST FACULTY UNION AND INSTEAD UPHELD THE DIRECTIVE OF
THE HONORABLE DIRECTOR OF THE BUREAU OF LABOR RELATIONS
TO CONDUCT THE ELECTION OF UNION OFFICERS UNDER THE
CONTROL AND SUPERVISION OF THE REGIONAL DIRECTOR FOR THE
NATIONAL CAPITAL REGION OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT.

Essentially, in order to arrive at a final disposition of the instant case,

this Court is tasked to determine the following: (1) the nature of the P42
million economic benefits package granted by UST to USTFU; (2) the legality
of the 10% check-off collected by the Mariño Group from the P42 million
economic benefits package; and (3) the validity of the BLR order for USTFU
to conduct election of union officers under the control and supervision of the
DOLE-NCR Regional Director. ETDAaC

II

RULING

(1) The P42 million economic benefits package

 Petitioners argue that the P42 million economic benefits package
granted to the covered faculty members were additional benefits, which
resulted from a long and arduous process of negotiations between the Mariño
Group and UST. The BLR and the Court of Appeals were in error for
considering the said amount as purely sourced from the allocation by UST of
70% percent of the incremental proceeds of tuition fee increases, in
accordance with Republic Act No. 6728. Said law was improperly applied as
a general law that decrees the allocation by all private schools of 70% of their
tuition fee increases to the payment of salaries, wages, allowances and other
benefits of their teaching & non-teaching personnel. It is clear from the title
of the law itself that it only covers government assistance to students and
teachers in private education. Section 5 of Republic Act No.
6728 unequivocally limits the scope of the law to tuition fee supplements and
subsidies extended by the Government to students in private high schools.
Thus, the petitioners maintain that Republic Act No. 6728 has no
application to the MOA executed on 10 September 1992 between UST and
USTFU, through the efforts of the Mariño Group.

The Court disagrees with petitioners' stance. TCEaDI

The provisions of Republic Act No. 6728 were not arbitrarily applied by
the DOLE-NCR Regional Director, the BLR, or the Court of Appeals to the
P42 million economic benefits package granted by UST to USTFU,
considering that the parties themselves stipulated in Section 7 of the MOA
they signed on 10 September 1992 that:

7.0. It is clearly understood and agreed upon that the aggregate sum of
P42 million is chargeable against the share of the faculty members in the
incremental proceeds of tuition fees collected and still to be collected[;]
Provided, however, that he (sic) commitment of the UNIVERSITY to pay
the aggregate sum of P42 million shall subsist even if the said amount
exceeds the proportionate share that may accrue to the faculty members
in the tuition fee increases that the UNIVERSITY may be authorized to
 collect in School-Year 1992-1993, and, Provided, finally, that the
covered faculty members shall still be entitled to their proportionate
share in any undistributed portion of the incremental proceeds of the
tuition fee increases in School-Year 1992-1993, and which incremental
proceeds are, by law and pertinent Department of Education Culture and
Sports (DECS) regulations, required to be allotted for the payment of
salaries, wages, allowances and other benefits of teaching and

non-teaching personnel for the UNIVERSITY. 44 (Emphases supplied.)

The "law" in the aforequoted Section 7 of the MOA can only refer
to Republic Act No. 6728, otherwise known as the "Government Assistance
to Students and Teachers in Private Education Act". Republic Act No.
6728 was enacted in view of the declared policy of the State, in conformity
with the mandate of the Constitution, to promote and make quality
education accessible to all Filipino citizens, as well as the recognition of the
State of the complementary roles of public and private educational
institutions in the educational system and the invaluable contribution that
the private schools have made and will make to education. 45 The said statute
primarily grants various forms of financial aid to private educational
institutions such as tuition fee supplements, assistance funds, and scholarship
grants. 46

One such form of financial aid is provided under Section 5 of Republic

Act No. 6728, which states:

SEC. 5. Tuition Fee Supplement for Student in Private High School. —

(1) Financial assistance for tuition for students in private high schools
shall be provided by the government through a voucher system in the
following manner: CHDTEA

(a) For students enrolled in schools charging less than one thousand five
hundred pesos (P1,500) per year in tuition and other fees during school
year 1988-89 or such amount in subsequent years as may be
determined from time to time by the State Assistance Council: The
Government shall provide them with a voucher equal to two hundred
ninety pesos P290.00: Provided, That the student pays in the
1989-1990 school year, tuition and other fees equal to the tuition and
other fees paid during the preceding academic year: Provided,
further, That the Government shall reimburse the vouchers from the
schools concerned within sixty (60) days from the close of the
registration period: Provided, furthermore, That the student's family
resides in the same city or province in which the high school is located
unless the student has been enrolled in that school during the previous
academic year.

(b) For students enrolled in schools charging above one thousand five
hundred pesos (P1,500) per year in tuition and other fees during the
school year 1988-1989 or such amount in subsequent years as may be
determined from time to time by the State Assistance Council, no
assistance for tuition fees shall be granted by the Government: Provided,
however, That the schools concerned may raise their tuition fee subject to
Section 10 hereof.

(2) Assistance under paragraph (1), subparagraphs (a) and (b) shall be
granted and tuition fees under subparagraph (c) may be increased, on the
condition that seventy percent (70%) of the amount subsidized, allotted
for tuition fee or of the tuition fee increases shall go to the payment of
salaries, wages, allowances and other benefits of teaching and
non-teaching personnel except administrators who are principal
stockholders of the school, and may be used to cover increases as provided
for in the collective bargaining agreements existing or in force at the time
when this Act is approved and made effective: Provided, That
government subsidies are not used directly for salaries of teachers of
nonsecular subjects. At least twenty percent (20%) shall go to the
improvement or modernization of buildings, equipment, libraries,
laboratories, gymnasia and similar facilities and to the payment of other
costs of operation. For this purpose, schools shall maintain a separate
record of accounts for all assistance received from the government, any
tuition fee increase, and the detailed disposition and use thereof, which
 record shall be made available for periodic inspection as may be
determined by the State Assistance Council, during business hours, by the
faculty, the non-teaching personnel, students of the school concerned,
and Department of Education, Culture and Sports and other concerned
government agencies. (Emphases ours.) TEDHaA

Although Section 5 of Republic Act No. 6728 does speak of government

assistance to students in private high schools, it is not limited to the same.
Contrary to petitioners' puerile claim, Section 5 likewise grants an
unmistakable authority to private high schools to increase their tuition fees,
subject to the condition that seventy (70%) percent of the tuition fee
increases shall go to the payment of the salaries, wages, allowances, and
other benefits of their teaching and non-teaching personnel. The said
allocation may also be used to cover increases in the salaries, wages,
allowances, and other benefits of school employees as provided for in the
CBAs existing or in force at the time when Republic Act No. 6728 was
approved and made effective.

Contrary to petitioners' argument, the right of private schools to

increase their tuition fee — with their corresponding obligation to allocate
70% of said increase to the payment of the salaries, wages, allowances, and
other benefits of their employees — is not limited to private high schools.
Section 9 47 of Republic Act No. 6728, on "Further Assistance to Students in
Private Colleges and Universities", is crystal clear in providing that:

d) Government assistance and tuition increases as described in this

Section shall be governed by the same conditions as provided under
Section 5 (2).

Indeed, a private educational institution under Republic Act No.

6728 still has the discretion on the disposition of 70% of the tuition fee
increase. It enjoys the privilege of determining how much increase in salaries
to grant and the kind and amount of allowances and other benefits to give.
The only precondition is that 70% percent of the incremental tuition fee
increase goes to the payment of salaries, wages, allowances and other benefits
of teaching and non-teaching personnel. 48

In this case, UST and USTFU stipulated in their 10 September 1992

MOA that the P42 million economic benefits package granted by UST to the
members of the collective bargaining unit represented by USTFU, was
chargeable against the 70% allotment from the proceeds of the tuition fee
increases collected and still to be collected by UST. As observed by the
DOLE-NCR Regional Director, and affirmed by both the BLR and the Court
of Appeals, there is no showing that any portion of the P42 million economic
benefits package was derived from sources other than the 70% allotment
from tuition fee increases of UST.

Given the lack of evidence to the contrary, it can be conclusively

presumed that the entire P42 million economic benefits package extended to
USTFU came from the 70% allotment from tuition fee increases of UST.
Preceding from this presumption, any deduction from the P42 million
economic benefits package, such as the P4.2 million claimed by the Mariño
Group as attorney's/agency fees, should not be allowed, because it would
ultimately result in the reduction of the statutorily mandated 70% allotment
from the tuition fee increases of UST.

The other reasons for disallowing the P4.2 million attorney's/agency

fees collected by the Mariño Group from the P42 million economic benefits
package are discussed in the immediately succeeding paragraphs. EIAScH

(2) The P4.2 Million Check-off

Petitioners contend that the P4.2 million check-off, from the P42
million economic benefits package, was lawfully made since the requirements
of Article 222 (b) of the Labor Code, as amended, were complied with by the
Mariño Group. The individual paychecks of the covered faculty employees
were not reduced and the P4.2 million deducted from the P42 million
economic benefits package became union funds, which were then used to pay
attorney's fees, negotiation fees, and similar charges arising from the CBA. In
addition, the P4.2 million constituted a special assessment upon the USTFU
members, the requirements for which were properly observed. The special
assessment was authorized in writing by the general membership of USTFU
during a meeting in which it was included as an item in the agenda.
Petitioners fault the Court of Appeals for disregarding the authorization of
the special assessment by USTFU members. There is no law that prohibits the
insertion of a written authorization for the special assessment in the same
instrument for the ratification of the 10 September 1992 MOA. Neither is
there a law prescribing a particular form that needs to be accomplished for
the authorization of the special assessment. The faculty members who signed
the ratification of the MOA, which included the authorization for the special
assessment, have high educational attainment, and there is ample reason to
believe that they affixed their signatures thereto with full comprehension of
what they were doing.

Again, the Court is not persuaded.

The pertinent legal provisions on a check-off are found in Articles 222

(b) and 241 (n) and (o) of the Labor Code, as amended.

Article 222 (b) states:

(b) No attorney's fees, negotiation fees or similar charges of any kind

arising from any 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 unions 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.

Article 241 (n) reads:

(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 at 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. HCTEDa

And Article 241 (o) provides:

(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 without an
individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and
beneficiary of the deduction.

Article 222 (b) of the Labor Code, as amended, prohibits the payment
of attorney's fees only when it is effected through forced contributions from
the employees from their own funds as distinguished from union
funds. 49 Hence, the general rule is that attorney's fees, negotiation fees, and
other similar charges may only be collected from union funds, not from the
amounts that pertain to individual union members. As an exception to the
general rule, special assessments or other extraordinary fees may be levied
upon or checked off from any amount due an employee for as long as there is
proper authorization by the employee.

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 the employees, deducts union dues or agency fees
from the latter's wages and remits them directly to the Union. Its desirability
in a labor organization is quite evident. The Union 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. 50
 The Court finds that, in the instant case, the P42 million economic
benefits package granted by UST did not constitute union funds from whence
the P4.2 million could have been validly deducted as attorney's fees. The P42
million economic benefits package was not intended for the USTFU coffers,
but for all the members of the bargaining unit USTFU represented, whether
members or non-members of the union. A close reading of the terms of the
MOA reveals that after the satisfaction of the outstanding obligations of UST
under the 1986 CBA, the balance of the P42 million was to be distributed to
the covered faculty members of the collective bargaining unit in the form of
salary increases, returns on paycheck deductions; and increases in
hospitalization, educational, and retirement benefits, and other economic
benefits. The deduction of the P4.2 million, as alleged attorney's/agency fees,
from the P42 million economic benefits package effectively decreased the
share from said package accruing to each member of the collective bargaining
unit.

Petitioners' line of argument — that the amount of P4.2 million

became union funds after its deduction from the P42 million economic
benefits package and, thus, could already be used to pay attorney's fees,
negotiation fees, or similar charges from the CBA — is absurd. Petitioners'
reasoning is evidently flawed since the attorney's fees may only be paid from
union funds; yet the amount to be used in paying for the same does not
become union funds until it is actually deducted as attorney's fees from the
benefits awarded to the employees. It is just a roundabout argument. What
the law requires is that the funds be already deemed union funds even before
the attorney's fees are deducted or paid therefrom; it does not become union
funds after the deduction or payment. To rule otherwise will also render the
general prohibition stated in Article 222 (b) nugatory, because all that the
union needs to do is to deduct from the total benefits awarded to the
employees the amount intended for attorney's fees and, thus, "convert" the
latter to union funds, which could then be used to pay for the said attorney's
fees. DcICEa

The Court further determines that the requisites for a valid levy and
check-off of special assessments, laid down by Article 241 (n) and (o),
respectively, of the Labor Code, as amended, have not been complied with in
the case at bar. To recall, these requisites are: (1) an authorization by a
written resolution of the majority of all the union 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. 51

Additionally, Section 5, Rule X of the USTFU Constitution and By-Laws

mandates that:

Section 5. Special assessments or other extraordinary fees such as for

payment of attorney's fees shall be made only upon a resolution duly
ratified by the general membership by secret balloting.

In an attempt to comply with the foregoing requirements, the Mariño

Group caused the majority of the general membership of USTFU to
individually sign a document, which embodied the ratification of the MOA
between UST and USTFU, dated 10 September 1992, as well as the
authorization for the check-off of P4.2 million, from the P42 million
economic benefits package, as payment for attorney's fees. As held by the
Court of Appeals, however, the said documents constitute unsatisfactory
compliance with the requisites set forth in the Labor Code, as amended, and
in the USTFU Constitution and By-Laws, even though individually signed by a
majority of USTFU members.

The inclusion of the authorization for a check-off of union dues and

special assessments for the Labor Education Fund and attorney's fees, in the
same document for the ratification of the 10 September 1992 MOA
granting the P42 million economic benefits package, necessarily vitiated the
consent of USTFU members. For sure, it is fairly reasonable to assume that no
individual member of USTFU would casually turn down the substantial and
lucrative award of P42 million in economic benefits under the MOA. However,
there was no way for any individual union member to separate his or her
consent to the ratification of the MOA from his or her authorization of the
check-off of union dues and special assessments. As it were, the ratification of
the MOA carried with it the automatic authorization of the check-off of
union dues and special assessments in favor of the union. Such a situation
militated against the legitimacy of the authorization for the P4.2 million
check-off by a majority of USTFU membership. Although the law does not
prescribe a particular form for the written authorization for the levy or
check-off of special assessments, the authorization must, at the very least,
embody the genuine consent of the union member.

The failure of the Mariño Group to strictly comply with the

requirements set forth by the Labor Code, as amended, and the USTFU
Constitution and By-Laws, invalidates the questioned special assessment.
Substantial compliance is not enough in view of the fact that the special
assessment will diminish the compensation of the union members. Their
express consent is required, and this consent must be obtained in accordance
with the steps outlined by law, which must be followed to the letter. No
shortcuts are allowed. 52 cHaICD

Viewed in this light, the Court does not hesitate to declare as illegal the
check-off of P4.2 million, from the P42 million economic benefits package,
for union dues and special assessments for the Labor Education Fund and
attorney's fees. Said amount rightfully belongs to and should be returned by
petitioners to the intended beneficiaries thereof, i.e., members of the
collective bargaining unit, whether or not members of USTFU. This directive
is without prejudice to the right of petitioners to seek reimbursement from
the other USTFU officers and directors, who were part of the Mariño Group,
and who were equally responsible for the illegal check-off of the aforesaid
amount.
(3) Election of new officers

Having been overtaken by subsequent events, the Court need no longer

pass upon the issue of the validity of the order of BLR for USTFU to conduct
its long overdue election of union officers, under the control and supervision
of the DOLE-NCR Regional Director.

The BLR issued such an order since USTFU then had two groups,
namely, the Mariño Group and the Gamilla Group, each claiming to be the
legitimate officers of USTFU.

The DOLE-NCR Regional Director, in his Decision dated 27 May 1999,

decreed that the Mariño Group be expelled from their positions as USTFU
officers. But then, the BLR, in its Decision promulgated on 9 March 2000,
declared that the change of officers could best be decided, not by expulsion,
but by the general membership of the union through the conduct of election,
under the control and supervision of the DOLE-NCR Regional Director. In its
assailed Decision dated 16 March 2001, the Court of Appeals agreed with
the BLR judgment in its ruling that the conduct of an election, under the
control and supervision of the DOLE-NCR Regional Director, is necessary to
settle the question of who, as between the officers of the Mariño Group and of
the Gamilla Group, are the legitimate officers of the USTFU. DTEIaC

The Court points out, however, that neither the Decision of the BLR nor
of the Court of Appeals took into account the fact that an election of USTFU
officers was already conducted on 14 January 2000, which was won by the
Gamilla Group. There is nothing in the records to show that the said election
was contested or made the subject of litigation. The Gamilla Group had
exercised their powers as USTFU officers during their elected term. Since the
term of union officers under the USTFU Constitution and By-Laws was only
for three years, then the term of the Gamilla Group already expired in 2003.
It is already beyond the jurisdiction of this Court, in the present Petition, to
still look into the subsequent elections of union officers held after 2003.
 The election of the Gamilla Group as union officers in 2000 should have
already been recognized by the BLR and the Court of Appeals. The order for
USTFU to conduct another election was only a superfluity. The issue of who
between the officers of the Mariño Group and of the Gamilla Group are the
legitimate USTFU officers has been rendered moot by the succeeding events in
the case.

WHEREFORE, premises considered, the Petition for Review under Rule

45 of the Rules of Court is hereby DENIED. The Decision dated 16 March
2001 and the Resolution dated 30 August 2001 of the Court of Appeals in
CA-G.R. SP No. 60657, are hereby AFFIRMED WITH MODIFICATIONS.
Petitioners are hereby ORDERED to reimburse, jointly and severally, to the
faculty members of the University of Sto. Tomas, belonging to the collective
bargaining unit, the amount of P4.2 million checked-off as union dues and
special assessments for the Labor Education Fund and attorney's fees, with
legal interest of 6% per annum from 15 December 1994, until the finality of
this decision. The order for the conduct of election for the officers of the
University of Sto. Tomas Faculty Union, under the control and supervision of
the Regional Director of the Department of Labor and Employment-National
Capital Region, is hereby DELETED. No costs.

SO ORDERED.

||| (Mariño, Jr. v. Gamilla, G.R. No. 149763, [July 7, 2009], 609 PHIL
549-586)

[G.R. No. 154113. December 7, 2011.]

EDEN GLADYS ABARIA, ROMULO ALFORQUE, ELENA ALLA,

EVELYN APOSTOL, AMELIA ARAGON, BEATRIZ ALBASTRO,
GLORIA ARDULLES, GLENDA BANTILAN, VIRGILIE BORINAGA,
ROLDAN CALDERON, ILDEBRANDO CUTA, ROMEO EMPUERTO,
LANNIE FERNANDEZ, LUCINELL GABAYERON, JESUSA GERONA,
JOSE GONZAGA, TEOFILO HINAMPAS, JOSEFINA IBUNA,
MARLYN LABRA, MARIA CARMENCITA LAO, ERA CANEN,
RODNEY REX LERIAS, ERNIE MANLIGAS, JOHANNE DEL MAR,
RUBY ORIMACO, CONSTANCIO PAGADOR, MARVELOUS PANAL,
NOLAN PANAL, LILLAN PETALLAR, GERNA PATIGDAS, MELODIA
PAULIN, SHIRLEY ROSE REYES, JOSEFINA REYES, OSCAR DE
LOS SANTOS, SOLOMON DE LOS SANTOS, RAMON TAGNIPIS,
BERNADETTE TIBAY, RONALD TUMULAK, LEONCIO VALLINAS,
EDELBERTO VILLA and the NAGKAHIUSANG MAMUMUO SA
METRO CEBU COMMUNITY
HOSPITAL, petitioners, vs. NATIONAL LABOR RELATIONS COMMI
SSION, METRO CEBU COMMUNITY HOSPITAL, INC., ITS BOARD
OF TRUSTEES, REV. GREGORIO IYOY, SHIELA BUOT, REV.
LORENZO GENOTIVA, RUBEN CARABAN, RUBEN ESTOYE, LILIA
SAURO, REV. ELIZER BERTOLDO, RIZALINA VILLAGANTE, DRA.
LUCIA FLORENDO, CONCEPCION VILLEGAS, REV. OLIVER CANEN,
DRA. CYD RAGAS, REV. MIKE CAMBA, AVEDNIGO VALIENTE,
RIZALINO TAGANAS, CIRIACO PONGASI, ISIAS WAGAS, REV.
ESTER GELOAGAN, REV. LEON MANIWAN, CRESENTE BAOAS,
WINEFREDA BARLOSO, REV. RUEL MARIGA AND THE UNITED
CHURCH OF CHRIST IN THE PHILIPPINES, REV. HILARIO GOMEZ,
REV. ELMER BOLOCON, THENATIONAL FEDERATION
OF LABOR AND ARMAND ALFORQUE, respondents.

[G.R. No. 187778. December 7, 2011.]

PERLA NAVA, DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN

CATACUTAN, ROLANDO REDILOSA, CORNELIO MARIBOJO,
VIRGENCITA CASAS, CRISANTA GENEGABOAS, EMILIO LAO,
RICO GASCON, ALBINA BAÑEZ, PEDRO CABATINGAN,
PROCOMIO SALUPAN, ELIZABETH RAMON, DIOSCORO
GABUNADA, ROY MALAZARTE, FELICIANITA MALAZARTE,
NORBERTA CACA, MILAGROS CASTILLO, EDNA ALBO, BERNABE
LUMAPGUID, CELIA SABAS, SILVERIO LAO, DARIO LABRADOR,
ERNESTO CANEN, JR., ELSA BUCAO, HANNAH BONGCARAS,
NEMA BELOCURA, PEPITO LLAGAS, GUILLERMA REMOCALDO,
ROGELIO DABATOS, ROBERTO JAYMA, RAYMUNDO DELATADO,
MERLYN NODADO, NOEL HORTELANO, HERMELO DELA TORRE,
LOURDES OLARTE, DANILO ZAMORA, LUZ CABASE, CATALINA
ALSADO, RUTH BANZON AND THE NAGKAHIUSANG MAMUMUO
SA METRO CEBU COMMUNITY
HOSPITAL, petitioners, vs. NATIONAL LABOR RELATIONS COMMI
SSION (FOURTH DIVISION), METRO CEBU COMMUNITY HOSPITAL,
INC., BOARD OF TRUSTEES, REV. GREGORIO IYOY, SHIELA BUOT,
REV. LORENZO GENOTIVA, RUBEN CABABAN, ROSENDO
ESTOYE, LILIA SAURO, REV. ELIZER BERTOLDO, RIZALINA
VILLAGANTE, DRA. LUCIA FLORENDO, CONCEPCION VILLEGAS,
REV. OLIVER CANEN, DRA. CYD RAAGAS, REV. MIKE CAMBA,
AVIDNIGO VALIENTE, RIZALINO TAGANAS, CIRIACO PONGASI,
ISIAS WAGAS, REV. ESTER GELOAGAN, REV. LEON MANIWAN,
CRESENTE BAOAS, WINIFREDA BARLOSO, REV. RUEL MARIGA,
THE UNITED CHURCH OF CHRIST IN THE PHILIPPINES, REV.
HILARIO GOMEZ, REV. ELMER BOLOCON,
THE NATIONAL FEDERATION OF LABOR AND ARMANDO
ALFORQUE, respondents.

[G.R. No. 187861. December 7, 2011.]

METRO CEBU COMMUNITY HOSPITAL, presently known as Visayas

Community Medical Center (VCMC), petitioner, vs. PERLA NAVA,
DANIELA YOSORES, AGUSTIN ALFORNON, AILEEN CATACUTAN,
ROLANDO REDILOSA, CORNELIO MARIBOJO, VIRGENCITA
 CASAS, CRISANTA GENEGABOAS, EMILIO LAO, RICO GASCON,
ALBINA BANEZ, PEDRO CABATINGAN, PROCOMIO SALUPAN,
ELIZABETH RAMON, DIOSCORO GABUNADA, ROY MALAZARTE,
FELICIANITA MALAZARTE, NORBERTA CACA, MILAGROS
CASTILLO, EDNA ALBO, BERNABE LUMABGUID, CELIA SABAS,
SILVERIO LAO, DARIO LABRADOR, ERNESTO CANEN, JR., ELSA
BUCAO, HANNAH BONGCARAS, NEMA BELOCURA, PEPITO
LLAGAS, GUILLERMA REMOCALDO, ROGELIO DABATOS,
ROBERTO JAYMA, RAYMUNDO DELATADO, NOEL HORTELANO,
HERMELO DE LA TORRE, LOURDES OLARTE, DANILO ZAMORA,
LUZ CABASE, CATALINA ALSADO AND RUTH
BANZON, respondents.

[G.R. No. 196156. December 7, 2011.]

VISAYAS COMMUNITY MEDICAL CENTER (VCMC) formerly known

as METRO CEBU COMMUNITY HOSPITAL (MCCH), petitioner, vs.
ERMA YBALLE, NELIA ANGEL, ELEUTERIA CORTEZ and EVELYN
ONG, respondents.

DECISION

VILLARAMA, JR., J : p

The consolidated petitions before us involve the legality of mass

termination of hospital employees who participated in strike and picketing
activities.

The factual antecedents:

Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the

Visayas Community Medical Center (VCMC), is a non-stock, non-profit
corporation organized under the laws of the Republic of the Philippines. It
operates the Metro Cebu Community Hospital (MCCH), a tertiary medical
institution located at Osmeña Boulevard, Cebu City. MCCH is owned by the
United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy is
the Hospital Administrator.

The National Federation of Labor (NFL) is the exclusive bargaining

representative of the rank-and-file employees of MCCHI. Under the 1987
and 1991 Collective Bargaining Agreements (CBAs), the signatories were
Ciriaco B. Pongasi, Sr. for MCCHI, and Atty. Armando M. Alforque (NFL Legal
Counsel) and Paterno A. Lumapguid as President of NFL-MCCH Chapter. In
the CBA effective from January 1994 until December 31, 1995, the
signatories were Sheila E. Buot as Board of Trustees Chairman, Rev. Iyoy as
MCCH Administrator and Atty. Fernando Yu as Legal Counsel of NFL, while
Perla Nava, President of Nagkahiusang Mamumuo sa
MCCH(NAMA-MCCH-NFL) signed the Proof of Posting. 1 cSaADC

On December 6, 1995, Nava wrote Rev. Iyoy expressing the union's

desire to renew the CBA, attaching to her letter a statement of proposals
signed/endorsed by 153 union members. Nava subsequently requested that
the following employees be allowed to avail of one-day union leave with pay
on December 19, 1995: Celia Sabas, Jesusa Gerona, Albina Bañez, Eddie
Villa, Roy Malazarte, Ernesto Canen, Jr., Guillerma Remocaldo, Catalina
Alsado, Evelyn Ong, Melodia Paulin, Sofia Bautista, Hannah Bongcaras, Ester
Villarin, Iluminada Wenceslao and Perla Nava. However, MCCHI returned the
CBA proposal for Nava to secure first the endorsement of the legal counsel of
NFL as the official bargaining representative of MCCHI employees. 2

Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA

submitted by Nava was never referred to NFL and that NFL has not
authorized any other legal counsel or any person for collective bargaining
negotiations. By January 1996, the collection of union fees (check-off) was
temporarily suspended by MCCHI in view of the existing conflict between the
federation and its local affiliate. Thereafter, MCCHI attempted to take over
the room being used as union office but was prevented to do so by Nava and
her group who protested these actions and insisted that management
directly negotiate with them for a new CBA. MCCHI referred the matter to
Atty. Alforque, NFL's Regional Director, and advised Nava that their group is
not recognized by NFL. 3 ASHEca

In his letter dated February 24, 1996 addressed to Nava, Ernesto

Canen, Jr., Jesusa Gerona, Hannah Bongcaras, Emma Remocaldo, Catalina
Alsado and Albina Bañez, Atty. Alforque suspended their union membership
for serious violation of the Constitution and By-Laws. Said letter states:

During the last General Membership Meeting of the union on February 20,
1996, you openly declared that you recognized the officers of the KMU
not those of the NFL, that you submit to the stuctures [sic] and authority
of the KMU not of the NFL, and that you are loyal only to the KMU not to
the NFL.

Also, in the same meeting, you admitted having sent a proposal for a
renewed collective bargaining agreement to the management without
any consultation with the NFL. In fact, in your letter dated February 21,
1996 addressed to Rev. Gregorio Iyoy, the Administrator of the hospital,
you categorically stated as follows: "We do not need any endorsement
from NFL, more particularly from Atty. Armando Alforque to negotiate
our CBA with MCCH." You did not only ignore the authority of the
undersigned as Regional Director but you maliciously prevented and
bluntly refused my request to join the union negotiating panel in the CBA
negotiations.

Your above flagrant actuations, made in the presence of the union

membership, constitute the following offenses:

1. Willful violation of the Constitution and By-Laws of the Federation

and the orders and decisions of duly constituted authorities of the same
(Section 4 (b), Article III), namely:
a) Defying the decision of the organization disaffiliating from the KMU;
and

b) Section 9 (b), Article IX which pertains to the powers and

responsibilities of the Regional Director, particularly, to negotiate and
sign collective bargaining agreement together with the local negotiating
panel subject to prior ratification by the general membership;

2. Joining or assisting another labor organization or helping in the

formation of a new labor organization that seeks or tends to defeat the
purpose of the Federation (Section 4 (d), Article III) in relation to
the National Executive Board's Resolution No. 8, September 26-27,
1994, to wit: SaCIDT

"Pursuant to the NEB Resolution disaffiliating from the KMU dated

September 11, 1993, the NEB in session hereby declare that KMU
is deemed an organization that seeks to defeat the objective of
establishing independent and democratic unions and seeks to
replace the Federation as exclusive representative of its members.

Committing acts that tend to alienate the loyalty of the members

to the Federation, subvert its duly constituted authorities, and
divide the organization in any level with the objective of
establishing a pro-KMU faction or independent union loyal to the
KMU shall be subject to disciplinary action, suspension or expulsion
from union membership, office or position in accordance with
paragraph[s] d and f of Section 4, Article III, and paragraph h,
Section 6, Article VI, paragraph d, Section 9, Article IX."

You are, therefore, directed to submit written explanation on the above

charges within five (5) days from receipt hereof. Failure on your part
shall be considered a waiver of your right to be heard and the Federation
will act accordingly.

Considering the gravity of the charges against you, the critical nature of
the undertaking to renew the collective bargaining agreement, and the
serious threat you posed to the organization, you are hereby placed under
 temporary suspension from your office and membership in the union
immediately upon receipt hereof pending investigation and final
disposition of your case in accordance with the union's constitution and
by-laws.

For your guidance and compliance. 4

On February 26, 1996, upon the request of Atty. Alforque, MCCHI

granted one-day union leave with pay for 12 union members. 5 The next day,
several union members led by Nava and her group launched a series of mass
actions such as wearing black and red armbands/headbands, marching
around the hospital premises and putting up placards, posters and streamers.
Atty. Alforque immediately disowned the concerted activities being carried
out by union members which are not sanctioned by NFL. MCCHI directed the
union officers led by Nava to submit within 48 hours a written explanation
why they should not be terminated for having engaged in illegal concerted
activities amounting to strike, and placed them under immediate preventive
suspension. Responding to this directive, Nava and her group denied there
was a temporary stoppage of work, explaining that employees wore their
armbands only as a sign of protest and reiterating their demand for MCCHI
to comply with its duty to bargain collectively. Rev. Iyoy, having been
informed that Nava and her group have also been suspended by NFL, directed
said officers to appear before his office for investigation in connection with
the illegal strike wherein they reportedly uttered slanderous and scurrilous
words against the officers of the hospital, threatening other workers and
forcing them to join the strike. Said union officers, however, invoked the
grievance procedure provided in the CBA to settle the dispute between
management and the union. 6 CSAaDE

On March 13 and 19, 1996, the Department of Labor and

Employment (DOLE) Regional Office No. 7 issued certifications stating that
there is nothing in their records which shows that NAMA-MCCH-NFL is a
registered labor organization, and that said union submitted only a copy of
its Charter Certificate on January 31, 1995. 7 MCCHI then sent individual
notices to all union members asking them to submit within 72 hours a
written explanation why they should not be terminated for having supported
the illegal concerted activities of NAMA-MCCH-NFL which has no legal
personality as per DOLE records. In their collective response/statement dated
March 18, 1996, it was explained that the picketing employees wore
armbands to protest MCCHI's refusal to bargain; it was also contended that
MCCHI cannot question the legal personality of the union which had actively
assisted in CBA negotiations and implementation. 8

On March 13, 1996, NAMA-MCCH-NFL filed a Notice of Strike but

the same was deemed not filed for want of legal personality on the part of
the filer. TheNational Conciliation and Mediation Board (NCMB) Region 7
office likewise denied their motion for reconsideration on March 25, 1996.
Despite such rebuff, Nava and her group still conducted a strike vote on April
2, 1996 during which an overwhelming majority of union members
approved the strike. 9

Meanwhile, the scheduled investigations did not push through because

the striking union members insisted on attending the same only as a group.
MCCHI again sent notices informing them that their refusal to submit to
investigation is deemed a waiver of their right to explain their side and
management shall proceed to impose proper disciplinary action under the
circumstances. On March 30, 1996, MCCHI sent termination letters to union
leaders and other members who participated in the strike and picketing
activities. On April 8, 1996, it also issued a cease-and-desist order to the
rest of the striking employees stressing that the wildcat concerted activities
spearheaded by the Nava group is illegal without a valid Notice of Strike and
warning them that non-compliance will compel management to impose
disciplinary actions against them. For their continued picketing activities
despite the said warning, more than 100 striking employees were dismissed
effective April 12 and 19, 1996.
 Unfazed, the striking union members held more mass actions. The
means of ingress to and egress from the hospital were blocked so that vehicles
carrying patients and employees were barred from entering the premises.
Placards were placed at the hospital's entrance gate stating: "Please proceed
to another hospital" and "we are on protest." Employees and patients
reported acts of intimidation and harassment perpetrated by union leaders
and members. With the intensified atmosphere of violence and animosity
within the hospital premises as a result of continued protest activities by
union members, MCCHI suffered heavy losses due to low patient admission
rates. The hospital's suppliers also refused to make further deliveries on
credit. acEHCD

With the volatile situation adversely affecting hospital operations and

the condition of confined patients, MCCHI filed a petition for injunction in
the NLRC (Cebu City) on July 9, 1996 (Injunction Case No. V-0006-96). A
temporary restraining order (TRO) was issued on July 16, 1996. MCCHI
presented 12 witnesses (hospital employees and patients), including a
security guard who was stabbed by an identified sympathizer while in the
company of Nava's group. MCCHI's petition was granted and a permanent
injunction was issued on September 18, 1996 enjoining the Nava group from
committing illegal acts mentioned in Art. 264 of the LaborCode.10

On August 27, 1996, the City Government of Cebu ordered the

demolition of the structures and obstructions put up by the picketing
employees of MCCHI along the sidewalk, having determined the same as a
public nuisance or nuisance per se. 11

Thereafter, several complaints for illegal dismissal and

unfair labor practice were filed by the terminated employees against MCCHI,
Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.

On August 4, 1999, Executive Labor Arbiter Reynoso A. Belarmino

rendered his decision 12 dismissing the complaints for unfair labor practice
in NLRC Case Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and
RAB-VII-03-0596-98 filed by Nava and 90 other complainants.
Executive Labor Arbiter Belarmino found no basis for the charge of
unfair labor practice and declared the strike and picketing activities illegal
having been conducted by NAMA-MCCH-NFL which is not a
legitimate labororganization. The termination of union leaders Nava, Alsado,
Bañez, Bongcaras, Canen, Gerona and Remocaldo were upheld as valid but
MCCHI was directed to grant separation pay equivalent to one-half month
for every year of service, in the total amount of P3,085,897.40 for the 84
complainants. 13

Complainants appealed to the Commission. On March 14, 2001,

the NLRC's Fourth Division rendered its Decision, 14 the dispositive portion of
which reads:

WHEREFORE, premises considered, the decision of the

Executive Labor Arbiter dismissing the complaint for
unfair labor practice and illegal dismissal is AFFIRMED with
MODIFICATIONS declaring the dismissal of all the complainants in RAB
Case No. 07-02-0394-98 and RAB Case No. 07-03-0596-98 valid
and legal. Necessarily, the award of separation pay and attorney's fees
are hereby Deleted. aHCSTD

Resolution on RAB Case No. 07-02-0309-98 is hereby Deferred upon

Joint Motion of the parties.

SO ORDERED. 15

In its Resolution dated July 2, 2001, the NLRC denied complainants'

motion for reconsideration. 16

Complainants elevated the case to the Court of Appeals (CA) (Cebu

Station) via a petition for certiorari, docketed as CA-G.R. SP No. 66540. 17

In its Resolution dated November 14, 2001, the CA's Eighth Division
dismissed the petition on the ground that out of 88 petitioners only 47 have
signed the certification against forum shopping. 18 Petitioners moved to
reconsider the said dismissal arguing that the 47 signatories more than
constitute the principal parties as the petition involves a matter of common
concern to all the petitioning employees. 19 By Resolution 20 dated May 28,
2002, the CA reinstated the case only insofar as the 47 petitioners who
signed the petition are concerned.

Petitioners challenged the validity of the November 14, 2001 and May
28, 2002 resolutions before this Court in a petition for review on certiorari,
docketed asG.R. No. 154113.

Meanwhile, the NLRC's Fourth Division (Cebu City) rendered its

Decision 21 dated March 12, 2003 in RAB Case Nos. 07-02-0309-98
(NLRC Case No. V-001042-99) pertaining to complainants Erma Yballe,
Evelyn Ong, Nelia Angel and Eleuteria Cortez as follows:

WHEREFORE, premises considered, the decision of the

Executive Labor Arbiter dismissing the complaint for
unfair labor practice and illegal dismissal is AFFIRMED with
MODIFICATIONS declaring all complainants to have been validly
dismissed. Necessarily, the award of separation pay and attorney's fees
are hereby Deleted.

SO ORDERED. 22

The NLRC likewise denied the motion for reconsideration filed by

complainants Yballe, et al., in its Resolution dated April 13, 2004. 23 cCEAHT

On October 17, 2008, the CA rendered its Decision 24 in CA-G.R. SP

No. 66540, the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered

AFFIRMING the Decision of
the National Labor Relations Commission (NLRC) — Fourth Division
dated March 14, 2001 in NLRC Case No. V-001042-99, WITH
MODIFICATIONS to the effect that (1) the petitioners, except the union
officers, shall be awarded separation pay equivalent to one-half (1/2)
month pay for every year of service, and (2) petitioner Cecilia Sabas shall
be awarded overtime pay amounting to sixty-three (63) hours.
 SO ORDERED. 25

Petitioners filed a motion for reconsideration while private respondents

filed a motion for partial reconsideration questioning the award of separation
pay. The former also invoked the decision of this Court in Bascon v. Court of
Appeals, 26 while the latter argued for the application of the ruling in
decision rendered by the CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R.
SP No. 84538), 27 both involving similar complaints filed by dismissed
employees of MCCHI.

By Resolution 28 dated April 17, 2009, the CA denied both motions:

WHEREFORE, the petitioners' Motion for Reconsideration and the private

respondent[s'] Motion for Partial Reconsideration of the October 17,
2008 Decision are both DENIED for lack of merit.

The Motions for Substitution of Counsel and Compromise Agreements

submitted by petitioners Bernardito Lawas, Avelina Bangalao, Dailenda
Hinampas and Daylinda Tigo are hereby approved. Consequently, said
petitioners are ordered dropped from the list of petitioners and the case
is deemed dismissed as to them.

SO ORDERED. 29

Complainants Yballe, et al., also challenged before the CA the March 12,
2003 Decision and April 13, 2004 Resolution of the NLRC in a petition
for certiorari, docketed as CA-G.R. SP No. 84998 (Cebu City). By
Decision 30 dated November 7, 2008, the CA granted their petition, as
follows:

WHEREFORE, the challenged Decision of public respondent dated March

12, 2003 and its Resolution dated April 13, 2004 are hereby
REVERSED AND SET ASIDE. Private respondent Metro Cebu Community
Hospital is ordered to reinstate petitioners Erma Yballe, Eleuteria Cortes,
Nelia Angel and Evelyn Ong without loss of seniority rights and other
privileges; to pay them their full backwages inclusive of their allowances
 and other benefits computed from the time of their dismissal up to the
time of their actual reinstatement. cTADCH

No pronouncement as to costs.

SO ORDERED. 31

Private respondents (MCCHI, et al.) moved to reconsider the above

decision but the CA denied their motion on February 22, 2011. 32

Both petitioners and private respondents in CA-G.R. SP No. 66540

appealed to this Court. Private respondent MCCHI in CA-G.R. SP No. 84998,
under its new name Visayas Community Medical Center (VCMC), filed a
petition for certiorari in this Court.

In G.R. No. 187778, petitioners Nava, et al., prayed that the CA

decision be set aside and a new judgment be entered by this Court (1)
declaring private respondents guilty of unfair labor practice and union
busting; (2) directing private respondents to cease and desist from further
committing unfair labor practices against the petitioners; (3) imposing upon
MCCH the proposed CBA or, in the alternative, directing the hospital and its
officers to bargain with the local union; (4) declaring private respondents
guilty of unlawfully suspending and illegally dismissing the individual
petitioners-employees; (5) directing private respondents to reinstate
petitioners-employees to their former positions, or their equivalent, without
loss of seniority rights with full backwages and benefits until reinstatement;
and (6) ordering private respondents to pay the petitioners moral damages,
exemplary damages, legal interests, and attorney's fees. 33

On the other hand, petitioner MCCHI in G.R. No. 187861 prayed for
the modification of the CA decision by deleting the award of separation pay
and reinstating the March 14, 2001 decision of the NLRC. 34

In G.R. No. 196156, MCCHI/VCMC prayed for the annulment of the

November 7, 2008 Decision and February 22, 2011 Resolution of the CA,
for this Court to declare the dismissal of respondents Yballe, et al., as valid
and legal and to reinstate the March 12, 2003 Decision and April 13, 2004
Resolution of the NLRC.

G.R. No. 187861 was consolidated with G.R. Nos. 154113 and
187778 as they involve similar factual circumstances and identical or
related issues. G.R. No. 196156 was later also consolidated with the aforesaid
cases.

The issues are: (1) whether the CA erred in dismissing the petition
for certiorari (CA-G.R. SP No. 66540) with respect to the petitioners in G.R.
No. 154113 for their failure to sign the certification against forum shopping;
(2) whether MCCHI is guilty of unfair labor practice; (3) whether petitioning
employees were illegally dismissed; and (4) if their termination was illegal,
whether petitioning employees are entitled to separation pay, backwages,
damages and attorney's fees. IHCSTE

Dropping of petitioners who did not

sign the certification against forum
shopping improper

The Court has laid down the rule in Altres v. Empleo 35 as culled from
"jurisprudential pronouncements", that the certification against forum
shopping must be signed by all the plaintiffs or petitioners in a case; otherwise,
those who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the plaintiffs or
petitioners share a common interest and invoke a common cause of action or
defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.

In the case at bar, the signatures of 47 out of 88 petitioning employees

in the certification against forum shopping constitute substantial compliance
with the rule. There is no question that they shared a common interest and
invoked a common cause of action when they filed suit before
the Labor Arbiter and NLRCquestioning the validity of their termination and
charging MCCHI with unfair labor practice. Thus, when they appealed their
case to the CA, they pursued the same as a collective body, raising only one
argument in support of their cause of action, i.e., the illegal dismissal
allegedly committed by MCCHI when union members resorted to strike and
mass actions due to MCCHI's refusal to bargain with officers of the local
chapter. There is sufficient basis, therefore, for the 47 signatories to the
petition, to speak for and in behalf of their co-petitioners and to file the
Petition for Certiorari in the appellate court. 36 Clearly, the CA erred in
dropping as parties-petitioners those who did not sign the certification
against forum shopping.

However, instead of remanding the case to the CA for it to resolve the

petition with respect to the herein petitioners in G.R. No. 154113, and as
prayed for, the Court shall consider them parties-petitioners in CA-G.R. SP
No. 66540, which case has already been decided and now subject of appeal in
G.R. No. 187778.

MCCHI not guilty of unfair

labor practice

Art. 248 (g) of the Labor Code, as amended, makes it an

unfair labor practice for an employer "[t]o violate the duty to bargain
collectively" as prescribed by the Code. The applicable provision in this case is
Art. 253 which provides:

ART. 253. Duty to bargain collectively when there exists a collective

bargaining agreement. — When there is a collective bargaining
agreement, the duty to bargain collectively shall also mean that neither
party shall terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or modify
the agreement at least sixty (60) days prior to its expiration date. It 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. DECSIT

NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively

when the latter refused to meet and convene for purposes of collective
bargaining, or at least give a counter-proposal to the proposed CBA the
union had submitted and which was ratified by a majority of the union
membership. MCCHI, on its part, deferred any negotiations until the local
union's dispute with the national union federation (NFL) is resolved
considering that the latter is the exclusive bargaining agent which
represented the rank-and-file hospital employees in CBA negotiations since
1987.

We rule for MCCHI.

Records of the NCMB and DOLE Region 7 confirmed that

NAMA-MCCH-NFL had not registered as a labor organization, having
submitted only its charter certificate as an affiliate or local chapter of
NFL. 37 Not being a legitimate labor organization, NAMA-MCCH-NFL is not
entitled to those rights granted to a legitimatelabor organization under Art.
242, specifically:

(a) To act as the representative of its members for the purpose of

collective bargaining;

(b) To be certified as the exclusive representative of all the employees in

an appropriate collective bargaining unit for purposes of collective
bargaining;

xxx xxx xxx

Aside from the registration requirement, it is only

the labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit which is the exclusive
representative of the employees in such unit for the purpose of collective
bargaining, as provided in Art. 255. 38 NAMA-MCCH-NFL is not
the labor organization certified or designated by the majority of the
rank-and-file hospital employees to represent them in the CBA negotiations
but the NFL, as evidenced by CBAs concluded in 1987, 1991 and 1994.
While it is true that a local union has the right to disaffiliate from
the national federation, NAMA-MCCH-NFL has not done so as there was no
any effort on its part to comply with the legal requisites for a valid
disaffiliation during the "freedom period" 39 or the last 60 days of the last
year of the CBA, through a majority vote in a secret balloting in accordance
with Art. 241 (d). 40 Nava and her group simply demanded that MCCHI
directly negotiate with the local union which has not even registered as
one. aCHDST

To prove majority support of the employees, NAMA-MCCH-NFL

presented the CBA proposal allegedly signed by 153 union members.
However, the petition signed by said members showed that the signatories
endorsed the proposed terms and conditions without stating that they were
likewise voting for or designating the NAMA-MCCH-NFL as their exclusive
bargaining representative. In any case, NAMA-MCCH-NFL at the time of
submission of said proposals was not a duly registered labor organization,
hence it cannot legally represent MCCHI's rank-and-file employees for
purposes of collective bargaining. Hence, even assuming that
NAMA-MCCH-NFL had validly disaffiliated from its mother union, NFL, it
still did not possess the legal personality to enter into CBA negotiations. A
local union which is not independently registered cannot, upon disaffiliation
from the federation, exercise the rights and privileges granted by law to
legitimate labor organizations; thus, it cannot file a petition for certification
election. 41 Besides, the NFL as the mother union has the right to investigate
members of its local chapter under the federation's Constitution and
By-Laws, and if found guilty to expel such members. 42 MCCHI therefore
cannot be faulted for deferring action on the CBA proposal submitted by
NAMA-MCCH-NFL in view of the union leadership's conflict with
the national federation. We have held that the issue of disaffiliation is an
intra-union dispute 43 which must be resolved in a different forum in an
action at the instance of either or both the federation and the local union or
a rival labor organization, not the employer. 44

Not being a legitimate labor organization nor the certified exclusive

bargaining representative of MCCHI's rank-and-file employees,
NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain
collectively in their behalf. 45 Hence, MCCHI's refusal to bargain then with
NAMA-MCCH-NFL cannot be considered an unfairlabor practice to justify
the staging of the strike. 46 EHCDSI

Strike and picketing activities

conducted by union officers and
members were illegal

Art. 263 (b) of the Labor Code, as amended, provides:

ART. 263. Strikes, picketing and lockouts. — . . .

(b) Workers shall have the right to engage in concerted activities for
purposes of collective bargaining or for their mutual benefit and
protection. The right oflegitimate labor organizations to strike and
picket and of employers to lockout, consistent with the national interest,
shall continue to be recognized and respected. However, no labor union
may strike and no employer may declare a lockout on grounds involving
inter-union and intra-union disputes.

xxx xxx xxx (Emphasis supplied.)

As borne by the records, NAMA-MCCH-NFL was not a duly registered

or an independently registered union at the time it filed the notice of strike
on March 13, 1996 and when it conducted the strike vote on April 2, 1996.
It could not then legally represent the union members. Consequently, the
mandatory notice of strike and the conduct of the strike vote report were
ineffective for having been filed and conducted by NAMA-MCCH-NFL which
has no legal personality as a legitimatelabor organization, in violation of Art.
263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus
Rules Implementing the Labor Code. 47

Art. 263 of the Labor Code provides:

ART. 263. Strikes, picketing and lockouts. — (a) . . .

xxx xxx xxx

(c) In cases of bargaining deadlocks, the duly certified or recognized

bargaining agent may file a notice of strike or the employer may file a
notice of lockout with the Department at least 30 days before the
intended date thereof. In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a duly certified or
recognized bargaining agent, the notice of strike may be filed by any
legitimate labor organization in behalf of its members. However, in case of
dismissal from employment of union officers duly elected in accordance
with the union constitution and by-laws, which may constitute union
busting, where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action
immediately. (As amended by Executive Order No. 111, December 24,
1986.)

(d) The notice must be in accordance with such implementing rules and
regulations as the Department of Labor and Employment may
promulgate. TcSCEa

xxx xxx xxx

(f) A decision to declare a strike must be approved by a majority of the

total union membership in the bargaining unit concerned, obtained by
secret ballot in meetings or referenda called for that purpose. A decision
to declare a lockout must be approved by a majority of the board of
directors of the corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting called for that
purpose. The decision shall be valid for the duration of the dispute based
on substantially the same grounds considered when the strike or lockout
 vote was taken. The Department may, at its own initiative or upon the
request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the
Ministry the voting at least seven days before the intended strike or
lockout, subject to the cooling-off period herein provided. (As amended
by Batas Pambansa Bilang 130, August 21, 1981 and further amended
byExecutive Order No. 111, December 24, 1986.) (Emphasis supplied.)

Rule XXII, Book V of the Omnibus Rules Implementing the Labor

Code reads:

RULE XXII

CONCILIATION, STRIKES AND LOCKOUTS

xxx xxx xxx

SEC. 6. Who may declare a strike or lockout. — Any certified or duly

recognized bargaining representative may declare a strike in cases of
bargaining deadlocks and unfair labor practices. The employer may
declare a lockout in the same cases. In the absence of a certified or duly
recognized bargaining representative, any
legitimate labor organization in the establishment may declare a strike
but only on grounds of unfair labor practice. (Emphasis supplied.)

Furthermore, the strike was illegal due to the commission of the

following prohibited activities: 48 (1) violence, coercion, intimidation and
harassment against non-participating employees; and (2) blocking of free
ingress to and egress from the hospital, including preventing patients and
their vehicles from entering the hospital and other employees from reporting
to work, the putting up of placards with a statement advising incoming
patients to proceed to another hospital because MCCHI employees are on
strike/protest. As shown by photographs 49 submitted by MCCHI, as well as
the findings of the NCMB and Cebu City Government, the hospital premises
and sidewalk within its vicinity were full of placards, streamers and
makeshift structures that obstructed its use by the public who were likewise
barraged by the noise coming from strikers using megaphones. 50 On the
other hand, the affidavits 51 executed by several hospital employees and
patients narrated in detail the incidents of harassment, intimidation,
violence and coercion, some of these witnesses have positively identified the
perpetrators. The prolonged work stoppage and picketing activities of the
striking employees severely disrupted hospital operations that MCCHI
suffered heavy financial losses. TSaEcH

The findings of the Executive Labor Arbiter and NLRC, as sustained by

the appellate court, clearly established that the striking union members
created so much noise, disturbance and obstruction that the local
government authorities eventually ordered their removal for being a public
nuisance. This was followed by an injunction from the NCMB enjoining the
union leaders from further blocking the free ingress to and egress from the
hospital, and from committing threats, coercion and intimidation against
non-striking employees and patients/vehicles desiring to enter for the
purpose of seeking medical treatment/confinement. By then, the illegal strike
had lasted for almost five months.

Consequences of illegal strike

to union officers and members

Art. 264 (a) of the Labor Code, as amended, provides for the
consequences of an illegal strike to the participating workers:

. . . Any union officer who knowingly participates in illegal strike and any
worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment
status: Provided, That mere participation of a worker in a lawful strike
shall not constitute sufficient ground for termination of his employment,
even if a replacement had been hired by the employer during such lawful
strike.

The above provision makes a distinction between workers and union

officers who participate in an illegal strike: an ordinary striking worker
cannot be terminated for mere participation in an illegal strike. There must
be proof that he or she committed illegal acts during a strike. A union officer,
on the other hand, may be terminated from work when he knowingly
participates in an illegal strike, and like other workers, when he commits an
illegal act during a strike. 52

Considering their persistence in holding picketing activities despite the

declaration by the NCMB that their union was not duly registered as a
legitimate labororganization and the letter from NFL's legal counsel
informing that their acts constitute disloyalty to the national federation, and
their filing of the notice of strike and conducting a strike vote
notwithstanding that their union has no legal personality to negotiate with
MCCHI for collective bargaining purposes, there is no question that
NAMA-MCCH-NFL officers knowingly participated in the illegal strike. The
CA therefore did not err in ruling that the termination of union officers Perla
Nava, Catalina Alsado, Albina Bañez, Hannah Bongcaras, Ernesto Canen,
Jesusa Gerona and Guillerma Remocaldo was valid and justified. HDATCc

With respect to the dismissed union members, although MCCHI

submitted photographs taken at the picket line, it did not individually name
those striking employees and specify the illegal act committed by each of
them. As to the affidavits executed by non-striking employees, they identified
mostly union officers as the persons who blocked the hospital entrance,
harassed hospital employees and patients whose vehicles were prevented
from entering the premises. Only some of these witnesses actually named a
few union members who committed similar acts of harassment and coercion.
Consequently, we find no error committed by the CA in CA-G.R. SP No.
66540 when it modified the decision of the NLRC and ruled that the
dismissal of union members who merely participated in the illegal strike was
illegal. On the other hand, in CA-G.R. SP No. 84998, the CA did not err in
ruling that the dismissal of Yballe, et al. was illegal; however, it also ordered
their reinstatement with full back wages.
Dismissed union members not
entitled to backwages but
should be awarded separation
pay in lieu of reinstatement

Since there is no clear proof that union members actually participated

in the commission of illegal acts during the strike, they are not deemed to
have lost their employment status as a consequence of a declaration of
illegality of the strike.

Petitioners in G.R. Nos. 154113 and 187778 assail the CA in not

ordering their reinstatement with back wages. Invoking stare decisis, they
cited the case ofBascon v. Court of Appeals 53 decided by this Court in 2004
and which involved two former hospital employees who likewise sued MCCHI
after the latter terminated their employment due to their participation in
the same illegal strike led by NAMA-MCCH-NFL. In said case we ruled that
petitioners Cole and Bascon were illegally dismissed because MCCHI failed to
prove that they committed illegal acts during the strike. We thus ordered the
reinstatement of petitioners Bascon and Cole without loss of seniority rights
and other privileges and payment of their back wages inclusive of allowances,
and other benefits computed from the time they were dismissed up to the
time of their actual reinstatement. Bascon was also the basis of the award of
back wages in CA-G.R. SP No. 84998.

Stare decisis et non quieta movere. Stand by the decision and disturb
not what is settled. Under the doctrine of stare decisis, once a court has laid
down a principle of law as applicable to a certain state of facts, it will adhere
to that principle and apply it to all future cases where the facts are
substantially the same, 54even though the parties may be different. It
proceeds from the first principle of justice that, absent any powerful
countervailing considerations, like cases ought to be decided alike. Thus,
where the same questions relating to the same event have been put forward
by parties similarly situated as in a previous case litigated and decided by a
competent court, the rule of stare decisis is a bar to any attempt to relitigate
the same issue. 55 TCacIA

The doctrine though is not cast in stone for upon a showing that
circumstances attendant in a particular case override the great benefits
derived by our judicial system from the doctrine of stare decisis, the Court is
justified in setting it aside. 56 For the Court, as the highest court of the land,
may be guided but is not controlled by precedent. Thus, the Court, especially
with a new membership, is not obliged to follow blindly a particular decision
that it determines, after re-examination, to call for a rectification. 57

Although the Bascon case involved the very same illegal strike in MCCHI
which led to the termination of herein petitioners, its clearly erroneous
application of the law insofar only as the award of back wages warrants
setting aside the doctrine. Indeed, the doctrine of stare
decisis notwithstanding, the Court has abandoned or overruled precedents
whenever it realized that the Court erred in the prior decisions. "Afterall,
more important than anything else is that this Court should be right." 58

In G & S Transport Corporation v. Infante, 59 the Court explained the

rationale for its recent rulings deleting back wages awarded to the dismissed
workers if the strike was found to be illegal. Considering that they did not
render work for the employer during the strike, they are entitled only to
reinstatement.

With respect to backwages, the principle of a "fair day's wage for a fair
day's labor" remains as the basic factor in determining the award
thereof. If there is no work performed by the employee there can be no
wage or pay unless, of course, the laborer was able, willing and ready to
work but was illegally locked out, suspended or dismissed or otherwise
illegally prevented from working. While it was found that respondents
expressed their intention to report back to work, the latter exception
cannot apply in this case. In Philippine Marine Officers' Guild v. Compañia
Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila
 Diamond Hotel Employees Union, the Court stressed that for this
exception to apply, it is required that the strike be legal, a situation that
does not obtain in the case at bar.

Under the circumstances, respondents' reinstatement without backwages

suffices for the appropriate relief. If reinstatement is no longer possible,
given the lapse of considerable time from the occurrence of the strike, the
award of separation pay of one (1) month salary for each year of service,
in lieu of reinstatement, is in order. 60(Emphasis supplied.) AaCcST

The CA decision in CA-G.R. SP No. 66540 ordering the payment of

separation pay in lieu of reinstatement without back wages is thus in order,
to conform to the policy of a fair day's wage for a fair day's labor. The
amount of separation pay is increased to one month pay for every year of
service, consistent with jurisprudence. Accordingly, the decision in CA-G.R.
SP No. 84998 is modified by deleting the award of back wages and granting
separation pay in lieu of reinstatement.

It is to be noted that as early as April 8, 1996, union members who

took part in the concerted activities have been warned by management that
NAMA-MCCH-NFL is not a legitimate labor organization and its notice of
strike was denied by the NCMB, and directed to desist from further
participating in such illegal activities. Despite such warning, they continued
with their picketing activities and held more mass actions after management
sent them termination notices. The prolonged work stoppage seriously
disrupted hospital operations, which could have eventually brought MCCHI
into bankruptcy had the City Government of Cebu not issued a demolition
order and the NLRC Region 7 not formally enjoined the prohibited picketing
activities. Also, the illegal dismissal complaints subsequently filed by the
terminated employees did not obliterate the fact that they did not suffer loss
of earnings by reason of the employer's unjustified acts, there being no
unfair laborpractice committed by MCCHI. Hence, fairness and justice dictate
that back wages be denied the said employees who participated in the illegal
concerted activities to the great detriment of the employer.

Separation pay is made an alternative relief in lieu of reinstatement in

certain circumstances, like: (a) when reinstatement can no longer be effected
in view of the passage of a long period of time or because of the realities of the
situation; (b) reinstatement is inimical to the employer's
interest; (c) reinstatement is no longer feasible; (d) reinstatement does not
serve the best interests of the parties involved; (e) the employer is prejudiced
by the workers' continued employment; (f) facts that make execution unjust
or inequitable have supervened; or (g) strained relations between the
employer and employee. 61

Considering that 15 years had lapsed from the onset of

this labor dispute, and in view of strained relations that ensued, in addition
to the reality of replacements already hired by the hospital which had
apparently recovered from its huge losses, and with many of the petitioners
either employed elsewhere, already old and sickly, or otherwise incapacitated,
separation pay without back wages is the appropriate relief. We note that
during the pendency of the cases in this Court, some of the petitioners have
entered into compromise agreements with MCCHI, all of which were duly
approved by this Court. Thus, excluded from the herein monetary awards are
the following petitioners whose compromise agreements have been approved
by this Court and judgment having been entered therein: Gloria Arguilles,
Romulo Alforque, Gerna Patigdas-Barte, Daylinda Tigo Merlyn Nodado,
Ramon Tagnipis, Bernabe Lumapguid, Romeo Empuerto, Marylen Labra,
Milagros Castillo Bernadette Pontillas-Tibay, Constancio Pagador, Nolan
Alvin Panal, Edilberto Villa, Roy Malazarte, Felecianita Malazarte and Noel
Hortelano. DaTISc

Attorney's fees

The dismissed employees having been compelled to litigate in order to

seek redress and protect their rights, they are entitled to reasonable
 attorney's fees pursuant to Art. 2208 (2) of the Civil Code. In view of the
attendant circumstances of this case, we hold that attorney's fees in the
amount of P50,000.00 is reasonable and justified. However, the respondents
in G.R. No. 196156 are not entitled to the same relief since they did not
appeal from the CA decision which did not include the award of attorney's
fees.

WHEREFORE, the petition for review on certiorari in G.R. No. 187861

is DENIED while the petitions in G.R. Nos. 154113, 187778 and 196156
are PARTLY GRANTED. The Decision dated October 17, 2008 of the Court
of Appeals in CA-G.R. SP No. 66540 is
hereby AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay
the petitioners in G.R. Nos. 154113 and 187778, except the petitioners who
are union officers, separation pay equivalent to one month pay for every year
of service, and reasonable attorney's fees in the amount of P50,000.00. The
Decision dated November 7, 2008 is
likewise AFFIRMED with MODIFICATIONS in that MCCHI is ordered to pay
the private respondents in G.R. No. 196156 separation pay equivalent to one
month pay for every year of service, and that the award of back wages
is DELETED.

The case is hereby remanded to the Executive Labor Arbiter for the
recomputation of separation pay due to each of the petitioners union
members in G.R. Nos. 154113, 187778 and 196156 except those who have
executed compromise agreements approved by this Court.

No pronouncement as to costs.

SO ORDERED.

||| (Abaria v. National Labor Relations Commission, G.R. No. 154113, 187778,
187861, 196156, [December 7, 2011], 678 PHIL 64-101)

[G.R. No. 181806. March 12, 2014.]

 WESLEYAN UNIVERSITY-PHILIPPINES, petitioner, vs. WESLEYAN
UNIVERSITY-FACULTY AND STAFF ASSOCIATION, respondent.

DECISION

DEL CASTILLO, J : p

A Collective Bargaining Agreement (CBA) is a contract entered into by an

employer and a legitimate labor organization concerning the terms and
conditions of employment. 1 Like any other contract, it has the force of law
between the parties and, thus, should be complied with in good
faith. 2 Unilateral changes or suspensions in the implementation of the
provisions of the CBA, therefore, cannot be allowed without the consent of both
parties.

This Petition for Review on Certiorari 3 under Rule 45 of the Rules of Court
assails the September 25, 2007 Decision 4 and the February 5, 2008
Resolution 5 of the Court of Appeals (CA) in CA-G.R. SP No. 97053.

Factual Antecedents

Petitioner Wesleyan University-Philippines is a non-stock, non-profit

educational institution duly organized and existing under the laws of the
Philippines. 6 Respondent Wesleyan University-Philippines Faculty and Staff
Association, on the other hand, is a duly registered labor organization 7 acting
as the sole and exclusive bargaining agent of all rank-and-file faculty and staff
employees of petitioner. 8

In December 2003, the parties signed a 5-year CBA 9 effective June 1, 2003
until May 31, 2008. 10

On August 16, 2005, petitioner, through its President, Atty. Guillermo T.

Maglaya (Atty. Maglaya), issued a Memorandum 11 providing guidelines on the
implementation of vacation and sick leave credits as well as vacation leave
commutation. The pertinent portions of the Memorandum read: CAHaST

1. VACATION AND SICK LEAVE CREDITS

Vacation and sick leave credits are not automatic. They have to be
earned. Monthly, a qualified employee earns an equivalent of 1.25
days credit each for VL and SL. Vacation Leave and Sick Leave
credits of 15 days become complete at the cut off date of May 31
of each year. (Example, only a total of 5 days credit will be given to
an employee for each of sick leave [or] vacation leave, as of month
end September, that is, 4 months from June to September
multiplied by 1.25 days). An employee, therefore, who takes VL or
SL beyond his leave credits as of date will have to file leave without
pay for leaves beyond his credit.

2. VACATION LEAVE COMMUTATION

Only vacation leave is commuted or monetized to cash. Vacation

leave commutation is effected after the second year of continuous
service of an employee. Hence, an employee who started working
June 1, 2005 will get his commutation on May 31, 2007 or
thereabout. 12

On August 25, 2005, respondent's President, Cynthia L. De Lara (De Lara)

wrote a letter 13 to Atty. Maglaya informing him that respondent is not
amenable to the unilateral changes made by petitioner. 14 De Lara questioned
the guidelines for being violative of existing practices and the CBA, 15 specifically
Sections 1 and 2, Article XII of the CBA, to wit:

ARTICLE XII

VACATION LEAVE AND SICK LEAVE

SECTION 1. VACATION LEAVE. — All regular and non-tenured

rank-and-file faculty and staff who are entitled to receive shall enjoy
fifteen (15) days vacation leave with pay annually.
 1.1 All unused vacation leave after the second year of service shall be
converted into cash and be paid to the entitled employee at the end of
each school year to be given not later than August 30 of each year.

SECTION 2. SICK LEAVE. — All regular and non-tenured

rank-and-file faculty and staff shall enjoy fifteen (15) days sick leave
with pay annually. 16

On February 8, 2006, a Labor Management Committee (LMC) Meeting was

held during which petitioner advised respondent to file a grievance complaint on
the implementation of the vacation and sick leave policy. 17 In the same
meeting, petitioner announced its plan of implementing a one-retirement
policy, 18 which was unacceptable to respondent.

Ruling of the Voluntary Arbitrator

Unable to settle their differences at the grievance level, the parties referred the
matter to a Voluntary Arbitrator. During the hearing, respondent submitted
affidavits to prove that there is an established practice of giving two retirement
benefits, one from the Private Education Retirement Annuity Association
(PERAA) Plan and another from the CBA Retirement Plan. Sections 1, 2, 3 and
4 of Article XVI of the CBA provide:

ARTICLE XVI

SEPARATION, DISABILITY AND RETIREMENT PAY

SECTION 1. ELIGIBILITY FOR MEMBERSHIP. — Membership in the

Plan shall be automatic for all full-time, regular staff and tenured faculty
of the University, except the University President. Membership in the
Plan shall commence on the first day of the month coincident with or
next following his statement of Regular/Tenured Employment Status. EACIaT

SECTION 2. COMPULSORY RETIREMENT DATE. — The compulsory

retirement date of each Member shall be as follows:
 a. Faculty — The last day of the School Year, coincident with his
attainment of age sixty (60) with at least five (years) of unbroken,
credited service.

b. Staff — Upon reaching the age of sixty (60) with at least five (5)
years of unbroken, credited service.

SECTION 3. OPTIONAL RETIREMENT DATE. — A Member may opt

for an optional retirement prior to his compulsory retirement. His
number of years of service in the University shall be the basis of
computing . . . his retirement benefits regardless of his chronological age.

SECTION 4. RETIREMENT BENEFIT. — The retirement benefit shall be

a sum equivalent to 100% of the member's final monthly salary for
compulsory retirement.

For optional retirement, the vesting schedule shall be:

xxx xxx xxx 19

On November 2, 2006, the Voluntary Arbitrator rendered a

Decision 20 declaring the one-retirement policy and the Memorandum dated
August 16, 2005 contrary to law. The dispositive portion of the Decision reads:

WHEREFORE, the following award is hereby made:

1. The assailed University guidelines on the availment of vacation and

sick leave credits and vacation leave commutation are contrary to law.
The University is consequently ordered to reinstate the earlier scheme,
practice or policy in effect before the issuance of the said guidelines on
August 16, 2005;

2. The "one retirement" policy is contrary to law and is hereby revoked

and rescinded. The University is ordered . . . to resume and proceed with
the established practice of extending to qualified employees retirement
benefits under both the CBA and the PERAA Plan.

3. The other money claims are denied. 21

Ruling of the Court of Appeals

Aggrieved, petitioner appealed the case to the CA via a Petition for Review
under Rule 43 of the Rules of Court.

On September 25, 2007, the CA rendered a Decision 22 finding the rulings of

the Voluntary Arbitrator supported by substantial evidence. It also affirmed the
nullification of the one-retirement policy and the Memorandum dated August
16, 2005 on the ground that these unilaterally amended the CBA without the
consent of respondent.23 Thus:

WHEREFORE, the instant appeal is DISMISSED for lack of merit.

SO ORDERED. 24

Petitioner moved for reconsideration but the same was denied by the CA in its
February 5, 2008 Resolution. 25

Issues

Hence, this recourse by petitioner raising the following issues:

a.

Whether . . . the [CA] committed grave and palpable error in sustaining

the Voluntary Arbitrator's ruling that the Affidavits submitted by
Respondent WU-PFSA are substantial evidence as defined by the rules
and jurisprudence that would substantiate that Petitioner WU-P has long
been in the practice of granting its employees two (2) sets of Retirement
Benefits. SHECcT

b.

Whether . . . the [CA] committed grave and palpable error in sustaining

the Voluntary Arbitrator's ruling that a university practice of granting its
employees two (2) sets of Retirement Benefits had already been
established as defined by the law and jurisprudence especially in light of
the illegality and lack of authority of such alleged grant.

c.

Whether . . . the [CA] committed grave and palpable error in sustaining

the Voluntary Arbitrator's ruling that it is incumbent upon Petitioner
 WU-P to show proof that no Board Resolution was issued granting two
(2) sets of Retirement Benefits.

d.

Whether . . . the [CA] committed grave and palpable error in revoking

the 16 August 2005 Memorandum of Petitioner WU-P for being
contrary to extant policy. 26

Petitioner's Arguments

Petitioner argues that there is only one retirement plan as the CBA Retirement
Plan and the PERAA Plan are one and the same. 27 It maintains that there is no
established company practice or policy of giving two retirement benefits to its
employees. 28 Assuming, without admitting, that two retirement benefits were
released, 29petitioner insists that these were done by mere oversight or mistake
as there is no Board Resolution authorizing their release. 30 And since these
benefits are unauthorized and irregular, these cannot ripen into a company
practice or policy. 31 As to the affidavits submitted by respondent, petitioner
claims that these are self-serving declarations, 32 and thus, should not be given
weight and credence. 33

In addition, petitioner claims that the Memorandum dated August 16, 2005,
which provides for the guidelines on the implementation of vacation and sick
leave credits as well as vacation leave commutation, is valid because it is in full
accord with existing policy. 34

Respondent's Arguments

Respondent belies the claims of petitioner and asserts that there are two
retirement plans as the PERAA Retirement Plan, which has been implemented
for more than 30 years, is different from the CBA Retirement
Plan. 35 Respondent further avers that it has always been a practice of
petitioner to give two retirement benefits 36 and that this practice was
established by substantial evidence as found by both the Voluntary Arbitrator
and the CA. 37
As to the Memorandum dated August 16, 2005, respondent asserts that it is
arbitrary and contrary to the CBA and existing practices as it added
qualifications or limitations which were not agreed upon by the parties. 38

Our Ruling

The Petition is bereft of merit.

The Non-Diminution Rule found in Article 100 39 of the Labor Code explicitly
prohibits employers from eliminating or reducing the benefits received by their
employees. This rule, however, applies only if the benefit is based on an express
policy, a written contract, or has ripened into a practice. 40 To be considered a
practice, it must be consistently and deliberately made by the employer over a
long period of time. 41

An exception to the rule is when "the practice is due to error in the construction
or application of a doubtful or difficult question of law." 42 The error, however,
must be corrected immediately after its discovery; 43 otherwise, the rule on
Non-Diminution of Benefits would still apply. CTDAaE

The practice of giving two retirement

benefits to petitioner's employees is
supported by substantial evidence.

In this case, respondent was able to present substantial evidence in the form of
affidavits to support its claim that there are two retirement plans. Based on the
affidavits, petitioner has been giving two retirement benefits as early as
1997. 44 Petitioner, on the other hand, failed to present any evidence to refute
the veracity of these affidavits. Petitioner's contention that these affidavits are
self-serving holds no water. The retired employees of petitioner have nothing to
lose or gain in this case as they have already received their retirement benefits.
Thus, they have no reason to perjure themselves. Obviously, the only reason they
executed those affidavits is to bring out the truth. As we see it then, their
affidavits, corroborated by the affidavits of incumbent employees, are more
than sufficient to show that the granting of two retirement benefits to retiring
employees had already ripened into a consistent and deliberate practice.

Moreover, petitioner's assertion that there is only one retirement plan as the
CBA Retirement Plan and the PERAA Plan are one and the same is not
supported by any evidence. There is nothing in Article XVI of the CBA to
indicate or even suggest that the "Plan" referred to in the CBA is the PERAA
Plan. Besides, any doubt in the interpretation of the provisions of the CBA
should be resolved in favor of respondent. In fact, petitioner's assertion is
negated by the announcement it made during the LMC Meeting on February 8,
2006 regarding its plan of implementing a "one-retirement plan." For if it were
true that petitioner was already implementing a one-retirement policy, there
would have been no need for such announcement. Equally damaging is the
letter-memorandum 45 dated May 11, 2006, entitled "Suggestions on the
defenses we can introduce to justify the abolition of double retirement policy,"
prepared by the petitioner's legal counsel. These circumstances, taken together,
bolster the finding that the two-retirement policy is a practice. Thus, petitioner
cannot, without the consent of respondent, eliminate the two-retirement policy
and implement a one-retirement policy as this would violate the rule on
non-diminution of benefits.

As a last ditch effort to abolish the two-retirement policy, petitioner contends

that such practice is illegal or unauthorized and that the benefits were
erroneously given by the previous administration. No evidence, however, was
presented by petitioner to substantiate its allegations.

Considering the foregoing disquisition, we agree with the findings of the

Voluntary Arbitrator, as affirmed by the CA, that there is substantial evidence
to prove that there is an existing practice of giving two retirement benefits, one
under the PERAA Plan and another under the CBA Retirement Plan. cIACaT

The Memorandum dated August 16,

2005 is contrary to the existing CBA.
Neither do we find any reason to disturb the findings of the CA that the
Memorandum dated August 16, 2005 is contrary to the existing CBA.

Sections 1 and 2 of Article XII of the CBA provide that all covered employees
are entitled to 15 days sick leave and 15 days vacation leave with pay every
year and that after the second year of service, all unused vacation leave shall be
converted to cash and paid to the employee at the end of each school year, not
later than August 30 of each year.

The Memorandum dated August 16, 2005, however, states that vacation and
sick leave credits are not automatic as leave credits would be earned on a
month-to-month basis. This, in effect, limits the available leave credits of an
employee at the start of the school year. For example, for the first four months
of the school year or from June to September, an employee is only entitled to
five days vacation leave and five days sick leave. 46 Considering that the
Memorandum dated August 16, 2005 imposes a limitation not agreed upon by
the parties nor stated in the CBA, we agree with the CA that it must be struck
down.

In closing, it may not be amiss to mention that when the provision of the CBA is
clear, leaving no doubt on the intention of the parties, the literal meaning of the
stipulation shall govern. 47 However, if there is doubt in its interpretation, it
should be resolved in favor of labor, 48 as this is mandated by no less than the
Constitution.49

WHEREFORE, the Petition is hereby DENIED. The assailed September 25, 2007
Decision and the February 5, 2008 Resolution of the Court of Appeals in
CA-G.R. SP No. 97053 are hereby AFFIRMED.

SO ORDERED.

||| (Wesleyan University - Phils. v. Wesleyan University - Faculty and Staff

Association, G.R. No. 181806, [March 12, 2014], 729 PHIL 240-252)