G.R. No.

211145

SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by its President, ALFIE

ALIPIO, Petitioner
vs.
BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND
CONSTRUCTION CO., LTD. (HHIC-PIDL.),, Respondents

DECISION

mendoza, J.:

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

This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013
Decision and the January 28, 2014 Resolution of the Court of Appeals (CA) in CA-G.R.
1 2

SP No. 123397, which reversed the November 28, 2011 Resolution of the Bureau of Labor
3

Relations (BLR) and reinstated the April 20, 2010 Decision 4 of the Department of Labor
and Employment (DOLE) Regional Director, cancelling the registration of Samahan ng
Manggagawa sa Hanjin Shipyard (Samahan) as a worker's association under Article 243
(now Article 249) of the Labor Code.

The Facts

On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed
an application for registration 5 of its name "Samahan ng Mga Manggagawa sa Hanjin
Shipyard" with the DOLE. Attached to the application were the list of names of the
association's officers and members, signatures of the attendees of the February 7, 2010
meeting, copies of their Constitution and By-laws. The application stated that the
association had a total of 120 members.

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

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

Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed, and
those without definite employers may form a workers' association. It further posited that
one third (1/3) of the members of the association had definite employers and the
continued existence and registration of the association would prejudice the company's
goodwill.

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground
that Samahan committed a misrepresentation in connection with the list of members
and/or voters who took part in the ratification of their constitution and by-laws in its
application for registration. Hanjin claimed that Samahan made it appear that its members
were all qualified to become members of the workers' association.

On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan

requested for a 10-day period to file a responsive pleading. No pleading, however, was
submitted. Instead, Samahan filed a motion to dismiss on April 14, 2010.
9

The Ruling of the DOLE Regional Director

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

KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay

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

XXX 10

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

Regional Director, reads:

WHEREFORE, premises considered, the petition is hereby GRANTED.

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

SO DECIDED. 12

The Ruling of the Bureau of Labor Relations

Aggrieved, Samahan filed an appeal before the BLR, arguing that Hanjin had no right to
13

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

In its Comment to the Appeal, Hanjin averred that it was a party-ininterest. It reiterated
15

that Samahan committed misrepresentation in its application for registration before DOLE
Pampanga. While Samahan insisted that the remaining 63 members were either working,
or had at least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.

On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the
Regional Director. It stated that the law clearly afforded the right to self-organization to all
workers including those without definite employers. As an expression of the right to
16

self-organization, industrial, commercial and self-employed workers could form a workers'

association if they so desired but subject to the limitation that it was only for mutual aid
and protection. Nowhere could it be found that to form a workers' association was
17

prohibited or that the exercise of a workers' right to self-organization was limited to

collective bargaining.18

The BLR was of the opinion that there was no misrepresentation on the part of Samahan.
The phrase, "KAMI, ang mga Manggagawa sa Hanjin Shipyard," if translated, would be:
"We, the workers at Hanjin Shipyard." The use of the preposition "at" instead of "of' would
indicate that "Hanjin Shipyard" was intended to describe a place. Should Hanjin feel that
19

the use of its name had affected the goodwill of the company, the remedy was not to seek
the cancellation of the association's registration. At most, the use by Samahan of the
name "Hanjin Shipyard" would only warrant a change in the name of the
association. Thus, the dispositive portion of the BLR decision reads:
20

WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE

Region III Director Ernesto C. Bihis dated 20 April 2010 is REVERSED and
SET ASIDE.
 Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall
remain in the roster of legitimate workers' association.
21

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

In its Resolution, dated November 28, 2011, the BLR affirmed its September 6, 2010
23

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

WHEREFORE, premises considered, our Decision dated 6 September

2010 is hereby AFFIRMED with a DIRECTIVE for SAMAHAN to remove
"HANJIN SHIPYARD" from its name.

SO RESOLVED. 24

Unsatisfied, Samahan filed a petition for certiorari under Rule 65 before the CA, docketed
25

as CA-G.R. SP No. 123397.

In its March 21, 2012 Resolution, the CA dismissed the petition because of Samahan's
26

failure to file a motion for reconsideration of the assailed November 28, 2011 Resolution.

On April 17, 2012, Samahan filed its motion for reconsideration and on July 18, 2012,
27

Hanjin filed its comment to oppose the same. On October 22, 2012, the CA issued a
28

resolution granting Samahan's motion for reconsideration and reinstating the petition.
Hanjin was directed to file a comment five (5) days from receipt of notice. 29

On December 12, 2012, Hanjin filed its comment on the petition, arguing that to require
30

Samahan to change its name was not tantamount to interfering with the workers' right to
self-organization. Thus, it prayed, among others, for the dismissalof the petition for
31

Samahan's failure to file the required motion for reconsideration. 32

On January 17, 2013, Samahan filed its reply. 33

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

The Ruling of the Court of Appeals

On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as
a legitimate workers' association was contrary to the provisions of Article 243 of the Labor
Code. It stressed that only 57 out of the 120 members were actually working in Hanjin
35

while the phrase in the preamble of Samahan's Constitution and By-laws, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard," created an impression that all its members were
employees of HHIC. Such unqualified manifestation which was used in its application for
registration, was a clear proof of misrepresentation which warranted the cancellation of
Samahan' s registration.

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

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

WHEREFORE, the petition is DISMISSED and the BLR's directive,

ordering that the words "Hanjin Shipyard" be removed from petitioner
association's name, is AFFIRMED. The Decision dated April 20, 2010 of
the DOLE Regional Director in Case No. Ro300-1003-CP-001, which
ordered the cancellation of petitioner association's registration is
REINSTATED.

SO ORDERED. 37

Hence, this petition, raising the following

ISSUES

I. THE COURT OF APPEALS SEfilOUSLY ERRED IN FINDING THAT

SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION OF
EMPLOYEES IN HANJIN AND INSTEAD SHOULD HA VE FORMED A
UNION, HENCE THEIR REGISTRATION AS A WORKERS'
ASSOCIATION SHOULD BE CANCELLED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE

REMOVAL/DELETION OF THE WORD "HANJIN" IN THE NAME OF THE
UNION BY REASON OF THE COMPANY'S PROPERTY RIGHT OVER
THE COMP ANY NAME "HANJIN." 38

Samahan argues that the right to form a workers' association is not exclusive to
intermittent, ambulant and itinerant workers. While the Labor Code allows the workers "to
form, join or assist labor organizations of their own choosing" for the purpose of collective
bargaining, it does not prohibit them from forming a labor organization simply for purposes
of mutual aid and protection. All members of Samahan have one common place of work,
Hanjin Shipyard. Thus, there is no reason why they cannot use "Hanjin Shipyard" in their
name. 39
Hanjin counters that Samahan failed to adduce sufficient basis that all its members were
employees of Hanjin or its legitimate contractors, and that the use of the name "Hanjin
Shipyard" would create an impression that all its members were employess of HHIC. 40

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

The Court's Ruling

The petition is partly meritorious.

Right to self-organization includes

right to form a union, workers '
association and labor management
councils

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

Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. It shall guarantee the rights of all workers
to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law.
xxx [Emphasis Supplied]

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

Section 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.

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

Article 3. Declaration of basic policy. The State shall afford protection to

labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relations between
workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just
and humane conditions of work.
 [Emphasis Supplied]

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

The right to form a union or association or to self-organization comprehends two notions,

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

In view of the revered right of every worker to self-organization, the law expressly allows
and even encourages the formation of labor organizations. A labor organization is defined
as "any union or association o[ employees which exists in whole or in part for the purpose
of collective bargaining or of dealing with employers concerning terms and conditions of
employment." A labor organization has two broad rights: (1) to bargain collectively and (2)
44

to deal with the employer concerning terms and conditions of employment. To bargain
collectively is a right given to a union once it registers itself with the DOLE. Dealing with
the employer, on the other hand, is a generic description of interaction between employer
and employees concerning grievances, wages, work hours and other terms and
conditions of employment, even if the employees' group is not registered with the DOLE. 45

A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose, while a workers' association is an
46

organization of workers formed for the mutual aid and protection of its members or for any
legitimate purpose other than

collective bargaining. 47

Many associations or groups of employees, or even combinations of only several persons,

may qualify as a labor organization yet fall short of constituting a labor union. While every
labor union is a labor organization, not every labor organization is a labor union. The
difference is one of organization, composition and operation. 48

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

the employer. This explains why a workers' association or organization does not always
have to be a labor union and why employer-employee collective interactions are not
always collective bargaining.50

To further strengthen employee participation, Article 255 (now 261) of the Labor Code
51

mandates that workers shall have the right to participate in policy and decision-making
processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and employers
may form LMCs.

A cursory reading of the law demonstrates that a common element between unionism and
the formation of LMCs is the existence of an employer-employee relationship. Where
neither party is an employer nor an employee of the other, no duty to bargain collectively
would exist. In the same manner, expressed in Article 255 (now 261) is the requirement
52

that such workers be employed in the establishment before they can participate in policy
and decision making processes.

In contrast, the existence of employer-employee relationship is not mandatory in the

formation of workers' association. What the law simply requires is that the members of the
workers' association, at the very least, share the same interest. The very definition of a
workers' association speaks of "mutual aid and protection."

Right to choose whether to form or

join a union or workers' association
belongs to workers themselves

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

inherent in the right to self-organization is the right to choose whether to form a union for
purposes of collective bargaining or a workers' association for purposes of providing
mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided by law.

For instance, the Labor Code specifically disallows managerial employees from joining,
assisting or forming any labor union. Meanwhile, supervisory employees, while eligible for
membership in labor organizations, are proscribed from joining the collective bargaining
unit of the rank and file employees. Even government employees have the right to
54

self-organization. It is not, however, regarded as existing or available for purposes of

collective bargaining, but simply for the furtherance and protection of their interests.
55

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

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

Article 243. Coverage and employees' right to selforganization. All

persons employed in commercial, industrial and agricultural enterprises
and in religious, charitable, medical, or educational institutions, whether
operating for profit or not, shall have the right to self-organization and to
form, join, or assist labor organizations of their own choosing for purposes
of collective bargaining. Ambulant, intermittent and itinerant workers,
selfemployed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.
(As amended by Batas Pambansa Bilang 70, May 1, 1980)

[Emphasis Supplied]

Further, Article 243 should be read together with Rule 2 of Department Order (D. 0.) No.
40-03, Series of 2003, which provides:

RULE II

COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

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

Section 2. Who may join labor unions and workers' associations. - All
persons employed in commercial, industrial and agricultural enterprises,
including employees of government owned or controlled corporations
without original charters established under the Corporation Code, as well
as employees of religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to self-organization
and to form, join or assist labor unions for purposes of collective
bargaining: provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file employees but
 may form, join or assist separate labor unions of their own. Managerial
employees shall not be eligible to form, join or assist any labor unions for
purposes of collective bargaining. Alien employees with valid working
permits issued by the Department may exercise the right to
self-organization and join or assist labor unions for purposes of collective
bargaining if they are nationals of a country which grants the same or
similar rights to Filipino workers, as certified by the Department of Foreign
Affairs.

For purposes of this section, any employee, whether employed for a

definite period or not, shall beginning on the first day of his/her service, be
eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other workers, the
self-employed, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection and other
legitimate purposes except collective bargaining.

[Emphases Supplied]

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

No misrepresentation on the part

of Samahan to warrant cancellation
of registration

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

Misrepresentation, as a ground for the cancellation of registration of a labor organization,

is committed "in connection with the adoption, or ratification of the constitution and
by-laws or amendments thereto, the minutes of ratification, the list of members who took
part in the ratification of the constitution and by-laws or amendments thereto, and those in
connection with the election of officers, minutes of the election of officers, and the list of
voters, xxx."
56
In Takata Corporation v. Bureau of Relations, the DOLE Regional Director granted the
57

petition for the cancellation of certificate of registration of Samahang Lakas Manggagawa

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

In S.S. Ventures International v. S.S. Ventures Labor Union, the petition for cancellation
58

of certificate of registration was denied. The Court wrote:

If the union's application is infected by falsification and like serious

irregularities, especially those appearing on the face of the application
and its attachments, a union should be denied recognition as a
legitimate labor organization. Prescinding from these considerations,
the issuance to the Union of Certificate of Registration No.
R0300-oo-02-UR-0003 necessarily implies that its application for
registration and the supporting documents thereof are prima facie free
from any vitiating irregularities. Another factor which militates against the
veracity of the allegations in the Sinumpaang Petisyon is the lack
of particularities on how, when and where respondent union
perpetrated the alleged fraud on each member. Such details are
crucial for in the proceedings for cancellation of union registration
on the ground of fraud or misrepresentation, what needs to be
established is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose.

[Emphases Supplied]

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

The records of this case reveal no deliberate or malicious intent to commit

misrepresentation on the part of Samahan. The use of such words "KAMI, ang mga
1âwphi1

Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and by-laws did
not constitute misrepresentation so as to warrant the cancellation of Samahan's certificate
of registration. Hanjin failed to indicate how this phrase constitutes a malicious and
deliberate misrepresentation. Neither was there any showing that the alleged
misrepresentation was serious in character. Misrepresentation is a devious charge that
cannot simply be entertained by mere surmises and conjectures.

Even granting arguendo that Samahan' s members misrepresented themselves as

employees or workers of Hanjin, said misrepresentation does not relate to the adoption or
ratification of its constitution and by-laws or to the election of its officers.

Removal of the word "Hanjin Shipyard"

from the association 's name, however,
does not infringe on Samahan 's right to
self-organization

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

a certificate of registration, Samahan's association is now recognized by law as a

legitimate workers' association.

According to Samahan, inherent in the workers' right to selforganization is its right to

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

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

No corporate name may be allowed by the Securities and Exchange

Commission if the proposed name is identical or deceptively
or confusingly similar to that of any existing corporation or to any other
name already protected by law or is patently deceptive, confusing or
contrary to existing laws. When a change in the corporate name is
approved, the Commission shall issue an amended certificate of
incorporation under the amended name.

[Emphases Supplied]

The policy underlying the prohibition in Section 18 against the registration of a corporate
name which is "identical or deceptively or confusingly similar" to that of any existing
corporation or which is "patently deceptive" or "patently confusing" or "contrary to existing
laws," is the avoidance of fraud upon the public which would have occasion to deal with
the entity concerned, the evasion of legal obligations and duties, and the reduction of
difficulties of administration and supervision over corporations.60
For the same reason, it would be misleading for the members of Samahan to use "Hanjin
Shipyard" in its name as it could give the wrong impression that all of its members are
employed by Hanjin.

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

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

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

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

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:
G.R. No. 169717 March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN

THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER),
ZACARRIAS JERRY VICTORIO-Union President,Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

The right to file a petition for certification election is accorded to a labor organization
provided that it complies with the requirements of law for proper registration. The inclusion
of supervisory employees in a labor organization seeking to represent the bargaining unit
of rank-and-file employees does not divest it of its status as a legitimate labor organization.
We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeal’s
March 15, 2005 Decision1 in CA-G.R. SP No. 58203, which annulled and set aside the
January 13, 2000 Decision2 of the Department of Labor and Employment (DOLE) in
OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution3 denying
petitioner union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions

in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for
certification election among the regular rank-and-file employees of Charter Chemical and
Coating Corporation (respondent company) with the Mediation Arbitration Unit of the
DOLE, National Capital Region.

On April 14, 1999, respondent company filed an Answer with Motion to Dismiss4 on the
ground that petitioner union is not a legitimate labor organization because of (1) failure to
comply with the documentation requirements set by law, and (2) the inclusion of
supervisory employees within petitioner union.5

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the
petition for certification election. The Med-Arbiter ruled that petitioner union is not a
legitimate labor organization because the Charter Certificate, "Sama-samang Pahayag ng
Pagsapi at Authorization," and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at
mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and
certified by the union secretary and attested to by the union president as required by
Section 235 of the Labor Code7 in relation to Section 1, Rule VI of Department Order (D.O.)
No. 9, series of 1997. The union registration was, thus, fatally defective.

The Med-Arbiter further held that the list of membership of petitioner union consisted of 12
batchman, mill operator and leadman who performed supervisory functions. Under Article
245 of the Labor Code, said supervisory employees are prohibited from joining petitioner
union which seeks to represent the rank-and-file employees of respondent company.

As a result, not being a legitimate labor organization, petitioner union has no right to file a
petition for certification election for the purpose of collective bargaining.

Department of Labor and Employment’s Ruling

On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company
dismissing petitioner union’s appeal on the ground that the latter’s petition for certification
election was filed out of time. Although the DOLE ruled, contrary to the findings of the
Med-Arbiter, that the charter certificate need not be verified and that there was no
independent evidence presented to establish respondent company’s claim that some
members of petitioner union were holding supervisory positions, the DOLE sustained the
dismissal of the petition for certification after it took judicial notice that another
union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating
Corporation, previously filed a petition for certification election on January 16, 1998. The
Decision granting the said petition became final and executory on September 16, 1998 and
was remanded for immediate implementation. Under Section 7, Rule XI of D.O. No. 9,
series of 1997, a motion for intervention involving a certification election in an unorganized
establishment should be filed prior to the finality of the decision calling for a certification
election. Considering that petitioner union filed its petition only on February 14, 1999, the
same was filed out of time.

On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its
January 13, 2000 Decision, the DOLE found that a review of the records indicates that no
certification election was previously conducted in respondent company. On the contrary,
the prior certification election filed by Pinag-isang Lakas Manggagawa sa Charter
Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on
appeal, was dismissed by the DOLE for being filed out of time. Hence, there was no
obstacle to the grant of petitioner union’s petition for certification election, viz:

WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of
this Office dated 16 July 1999 is MODIFIED to allow the certification election among the
regular rank-and-file employees of Charter Chemical and Coating Corporation with the
following choices:

1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for

Empowerment and Reform (SMCC-SUPER); and
2. No Union.

Let the records of this case be remanded to the Regional Office of origin for the immediate
conduct of a certification election, subject to the usual pre-election conference.

SO DECIDED.9

Court of Appeal’s Ruling

On March 15, 2005, the CA promulgated the assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution
dated January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET ASIDE.

SO ORDERED.10

In nullifying the decision of the DOLE, the appellate court gave credence to the findings of
the Med-Arbiter that petitioner union failed to comply with the documentation requirements
under the Labor Code. It, likewise, upheld the Med-Arbiter’s finding that petitioner union
consisted of both rank-and-file and supervisory employees. Moreover, the CA held that
the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition
for certification election and the infirmity in the membership of petitioner union cannot be
remedied through the exclusion-inclusion proceedings in a pre-election conference
pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines Corporation
Labor Union.11 Thus, considering that petitioner union is not a legitimate labor organization,
it has no legal right to file a petition for certification election.

Issues

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion

tantamount to lack of jurisdiction in granting the respondent [company’s] petition
for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of the
respondent company[’s] petition was already settled with finality and barred from being
re-litigated.

II

Whether x x x the Honorable Court of Appeals committed grave abuse of discretion

tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and
supervisory employee[s] of petitioner [union’s] membership is [a] ground for the
cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for
certification election.

III
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath the
local charter certificate issued by its mother federation and list of the union membership
attending the organizational meeting [is a ground] for the cancellation of petitioner [union’s]
legal personality as a labor organization and for the dismissal of the petition for
certification election.12

Petitioner Union’s Arguments

Petitioner union claims that the litigation of the issue as to its legal personality to file the
subject petition for certification election is barred by the July 16, 1999 Decision of the
DOLE. In this decision, the DOLE ruled that petitioner union complied with all the
documentation requirements and that there was no independent evidence presented to
prove an illegal mixture of supervisory and rank-and-file employees in petitioner union.
After the promulgation of this Decision, respondent company did not move for
reconsideration, thus, this issue must be deemed settled.

Petitioner union further argues that the lack of verification of its charter certificate and the
alleged illegal composition of its membership are not grounds for the dismissal of a
petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as
amended, nor are they grounds for the cancellation of a union’s registration under Section
3, Rule VIII of said issuance. It contends that what is required to be certified under oath by
the local union’s secretary or treasurer and attested to by the local union’s president are
limited to the union’s constitution and by-laws, statement of the set of officers, and the
books of accounts.

Finally, the legal personality of petitioner union cannot be collaterally attacked but may be
questioned only in an independent petition for cancellation pursuant to Section 5, Rule V,
Book IV of the Rules to Implement the Labor Code and the doctrine enunciated
in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.13

Respondent Company’s Arguments

Respondent company asserts that it cannot be precluded from challenging the July 16,
1999 Decision of the DOLE. The said decision did not attain finality because the DOLE
subsequently reversed its earlier ruling and, from this decision, respondent company
timely filed its motion for reconsideration.

On the issue of lack of verification of the charter certificate, respondent company notes
that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of
Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter
certificate be certified under oath.
It also contends that petitioner union is not a legitimate labor organization because its
composition is a mixture of supervisory and rank-and-file employees in violation of Article
245 of the Labor Code. Respondent company maintains that the ruling in Toyota Motor
Philippines vs. Toyota Motor Philippines Labor Union14 continues to be good case law.
Thus, the illegal composition of petitioner union nullifies its legal personality to file the
subject petition for certification election and its legal personality may be collaterally
attacked in the proceedings for a petition for certification election as was done here.

Our Ruling

The petition is meritorious.

The issue as to the legal personality of petitioner union is not barred by the July 16, 1999
Decision of the DOLE.

A review of the records indicates that the issue as to petitioner union’s legal personality
has been timely and consistently raised by respondent company before the Med-Arbiter,
DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that
petitioner union complied with the documentation requirements of the Labor Code and
that the evidence was insufficient to establish that there was an illegal mixture of
supervisory and rank-and-file employees in its membership. Nonetheless, the petition for
certification election was dismissed on the ground that another union had previously filed
a petition for certification election seeking to represent the same bargaining unit in
respondent company.

Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE
reversed its previous ruling. It upheld the right of petitioner union to file the subject petition
for certification election because its previous decision was based on a mistaken
appreciation of facts.15 From this adverse decision, respondent company timely moved for
reconsideration by reiterating its previous arguments before the Med-Arbiter that
petitioner union has no legal personality to file the subject petition for certification
election.

The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the
parties timely moved for reconsideration. The issue then as to the legal personality of
petitioner union to file the certification election was properly raised before the DOLE, the
appellate court and now this Court.

The charter certificate need not be certified under oath by the local union’s secretary or
treasurer and attested to by its president.

Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 948116 which
took effect on June 14, 2007.17 This law introduced substantial amendments to the Labor
Code. However, since the operative facts in this case occurred in 1999, we shall decide
the issues under the pertinent legal provisions then in force (i.e., R.A. No.
6715,18 amending Book V of the Labor Code, and the rules and regulations19 implementing
R.A. No. 6715, as amended by D.O. No. 9,20

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines,
Inc.21

In the main, the CA ruled that petitioner union failed to comply with the requisite
documents for registration under Article 235 of the Labor Code and its implementing rules.
It agreed with the Med-Arbiter that the Charter Certificate, Sama-samang Pahayag ng
Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at
mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus,
petitioner union cannot be accorded the status of a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended
by D.O. No. 9, series of 1997, provides:

Section 1. Chartering and creation of a local chapter — A duly registered federation or

national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;

(b) The names of the local/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 [are] the same as [those] of the federation or national union, this
fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng

mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang
Batas are not among the documents that need to be submitted to the Regional Office or
Bureau of Labor Relations in order to register a labor organization. As to the charter
certificate, the above-quoted rule indicates that it should be executed under oath.
Petitioner union concedes and the records confirm that its charter certificate was not
executed under oath. However, in San Miguel Corporation (Mandaue Packaging Products
Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies
Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),22 which was decided under
the auspices of D.O. No. 9, Series of 1997, we ruled –
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the
Court ruled that it was not necessary for the charter certificate to be certified and attested
by the local/chapter officers. Id. While this ruling was based on the interpretation of
the previous Implementing Rules provisions which were supplanted by the 1997
amendments, we believe that the same doctrine obtains in this case. Considering that
the charter certificate is prepared and issued by the national union and not the
local/chapter, it does not make sense to have the local/chapter’s officers x x x certify
or attest to a document which they had no hand in the preparation of.23 (Emphasis
supplied)

In accordance with this ruling, petitioner union’s charter certificate need not be executed
under oath. Consequently, it validly acquired the status of a legitimate labor organization
upon submission of (1) its charter certificate,24 (2) the names of its officers, their addresses,
and its principal office,25 and (3) its constitution and by-laws26— the last two requirements
having been executed under oath by the proper union officials as borne out by the
records.

The mixture of rank-and-file and supervisory employees in petitioner union does not nullify
its legal personality as a legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and
supervisory employees. However, petitioner union sought to represent the bargaining unit
consisting of rank-and-file employees. Under Article 24527 of the Labor Code, supervisory
employees are not eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union cannot be considered a
legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor
Philippines Corporation Labor Union28 (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the
Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of
batchman, mill operator and leadman, are supervisory employees. However, petitioner
union failed to present any rebuttal evidence in the proceedings below after respondent
company submitted in evidence the job descriptions29 of the aforesaid employees. The job
descriptions indicate that the aforesaid employees exercise recommendatory managerial
actions which are not merely routinary but require the use of independent judgment,
hence, falling within the definition of supervisory employees under Article 212(m)30 of the
Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld
by the appellate court, that petitioner union consisted of both rank-and-file and
supervisory employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union

does not divest it of its status as a legitimate labor organization. The appellate court’s
reliance on Toyota is misplaced in view of this Court’s subsequent ruling in Republic v.
Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima). In Kawashima, we
explained at length how and why the Toyota doctrine no longer holds sway under the
altered state of the law and rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on
the co-mingling of supervisory and rank-and-file employees] would bring about on
the legitimacy of a labor organization.

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

"Sec. 1. Who may join unions. - x x x Supervisory employees and

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

"Sec. 1. Where to file. - A petition for certification election may be filed with
the Regional Office which has jurisdiction over the principal office of the
employer. The petition shall be in writing and under oath.

Sec. 2. Who may file. - Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.

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

among others:

xxxx

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

unit unless circumstances otherwise require; and provided further,
that the appropriate bargaining unit of the rank-and-file employees
shall not include supervisory employees and/or security
guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise

legitimate and duly registered labor organization from exercising its right to
file a petition for certification election.

Thus, when the issue of the effect of mingling was brought to the fore
in Toyota, the Court, citing Article 245 of the Labor Code, as amended by
R.A. No. 6715, held:
 "Clearly, based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file
and supervisory employees cannot possess any of the rights of a
legitimate labor organization, including the right to file a petition for
certification election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of
any labor organization whenever the status of the labor organization
is challenged on the basis of Article 245 of the Labor Code.

xxxx

In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not,
prior to purging itself of its supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot possess the requisite personality to
file a petition for certification election." (Emphasis supplied)

In Dunlop, in which the labor organization that filed a petition for certification election was
one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long as
it counted rank-and-file employees among its members.

It should be emphasized that the petitions for certification election involved

in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.

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

Rule XI
Certification Elections

xxxx

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

and under oath and shall contain, among others, the following: x x x (c)
The description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the
1997 Amended Omnibus Rules, although the specific provision involved therein was only
Sec. 1, Rule VI, to wit:

"Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or

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

All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President."

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

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

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File
Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not
require a local or chapter to provide a list of its members, it would be improper for the
DOLE to deny recognition to said local or chapter on account of any question pertaining to
its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in 1999
against a rank-and-file labor organization on the ground of mixed membership: the Court
therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of
disqualified employees is not among the grounds for cancellation, unless such inclusion is
due to misrepresentation, false statement or fraud under the circumstances enumerated
in Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.32 [Underline supplied]

The applicable law and rules in the instant case are the same as those
in Kawashima because the present petition for certification election was filed in 1999 when
D.O. No. 9, series of 1997, was still in effect. Hence, Kawashimaapplies with equal force
here. As a result, petitioner union was not divested of its status as a legitimate labor
organization even if some of its members were supervisory employees; it had the right to
file the subject petition for certification election.

The legal personality of petitioner union cannot be collaterally attacked by respondent

company in the certification election proceedings.

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in
the certification election proceedings. As we explained in Kawashima:

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

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

The amendments to the Labor Code and its implementing rules have buttressed that
policy even more.33

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16,
2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203
are REVERSED and SET ASIDE. The January 13, 2000 Decision of the Department of
Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 164561 August 30, 2006

CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR., VIRGILIO AGERO,

and LEONARDO VISORRO, JR., Petitioners,
vs.
HON. COURT OF APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES
(CUSE) and ENRIQUE TAMONDONG III, Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a special civil action for Certiorari under Rule 65 of the Rules of Court seeking to
annul and set aside, on the ground of grave abuse of discretion amounting to lack or
excess of jurisdiction, (1) the Decision 1 of the Court of Appeals in CA-G.R. SP No. 57179
dated 28 October 2003 which annulled the Decision 2 of the National Labor Relations
Commission (NLRC) in NLRC Case No. 017822-99 dated 25 August 1999, thereby,
reinstating the Decision 3 of Acting Executive Labor Arbiter Pedro C. Ramos dated 7
August 1998; and (2) the Resolution 4 of the same court, dated 3 June 2004, which denied
the petitioners’ Motion for Reconsideration.

Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a domestic

corporation engaged in the business of manufacturing steel products; Benjamin Chua, Jr.
(now deceased), the former CAPASCO President; Virgilio Agerro, CAPASCO’s
Vice-President; and Leonardo Visorro, Jr., CAPASCO’s Administrative-Personnel
Manager. Herein private respondents are Enrique Tamondong III, the Personnel
Superintendent of CAPASCO who was previously assigned at the petitioners’ Cainta
Plant, and CAPASCO Union of Supervisory Employees (CUSE), a duly registered union
of CAPASCO.

The facts of the case are as follows:

Four former employees of CAPASCO originally filed this labor case before the NLRC,
namely: Fidel Lacambra, Armando Dayson, Reynaldo Vacalares, and Enrique
Tamondong III. However, in the course of the proceedings, Fidel Lacambra 5 and
Armando Dayson 6 executed a Release and Quitclaim, thus, waiving and abandoning any
and all claims that they may have against petitioner CAPASCO. On 3 November 1999,
Reynaldo Vacalares also signed a Quitclaim/Release/Waiver. 7 Hence, this Petition shall
focus solely on issues affecting private respondent Tamondong.

Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the Personnel

Manager for its Cainta Plant on 16 February 1990. Thereafter, he was promoted to the
position of Personnel/Administrative Officer, and later to that of Personnel Superintendent.
Sometime in June 1996, the supervisory personnel of CAPASCO launched a move to
organize a union among their ranks, later known as private respondent CUSE. Private
respondent Tamondong actively involved himself in the formation of the union and was
even elected as one of its officers after its creation. Consequently, petitioner CAPASCO
sent a memo 8 dated 3 February 1997, to private respondent Tamondong requiring him to
explain and to discontinue from his union activities, with a warning that a continuance
thereof shall adversely affect his employment in the company. Private respondent
Tamondong ignored said warning and made a reply letter 9 on 5 February 1997, invoking
his right as a supervisory employee to join and organize a labor union. In view of that, on 6
February 1997, petitioner CAPASCO through a memo 10 terminated the employment of
private respondent Tamondong on the ground of loss of trust and confidence, citing his
union activities as acts constituting serious disloyalty to the company.

Private respondent Tamondong challenged his dismissal for being illegal and as an act
involving unfair labor practice by filing a Complaint for Illegal Dismissal and Unfair Labor
Practice before the NLRC, Regional Arbitration Branch IV. According to him, there was no
just cause for his dismissal and it was anchored solely on his involvement and active
participation in the organization of the union of supervisory personnel in CAPASCO.
Though private respondent Tamondong admitted his active role in the formation of a union
composed of supervisory personnel in the company, he claimed that such was not a valid
ground to terminate his employment because it was a legitimate exercise of his
constitutionally guaranteed right to self-organization.

In contrast, petitioner CAPASCO contended that by virtue of private respondent

Tamondong’s position as Personnel Superintendent and the functions actually performed
by him in the company, he was considered as a managerial employee, thus, under the law
he was prohibited from joining a union as well as from being elected as one of its officers.
Accordingly, petitioners maintained their argument that the dismissal of private
respondent Tamondong was perfectly valid based on loss of trust and confidence
because of the latter’s active participation in the affairs of the union.

On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision in
favor of private respondent Tamondong, decreeing as follows:

WHEREFORE, premises considered, judgment is hereby rendered finding [petitioner

CAPASCO] guilty of unfair labor practice and illegal dismissal. Concomitantly, [petitioner
CAPASCO] is hereby ordered:

1. To cease and desist from further committing acts of unfair labor practice, as charged;

2. To reinstate [private respondent Tamondong] to his former position without loss of

seniority rights and other privileges and his full backwages inclusive of allowances, and to
his other benefits or their monetary equivalent, computed from the time his compensation
was withheld from him up to the time of his actual reinstatement, and herein partially
computed as follows:
a) P167,076.00 - backwages from February 7, 1997 to August 7, 1998;

b) P18,564.00 - 13th month pay for 1997 and 1998;

c) P4,284.00 - Holiday pay for 12 days;

d) P3,570.00 - Service Incentive Leave for 1997 and 1998.

P 193,494.00 - Total partial backwages and benefits. 11

Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On 25 August

1999, the NLRC rendered its Decision modifying the Decision of the Acting Executive
Labor Arbiter Pedro C. Ramos, thus:

WHEREFORE, premises all considered, the decision appealed from is hereby

MODIFIED:

a) Dismissing the Complaint for Illegal Dismissal filed by [private respondent Tamondong]
for utter lack of merit;

b) Dismissing the Complaint for Unfair Labor Practice for lack of factual basis;

c) Deleting the awards to [private respondent Tamondong] of backwages, moral and

exemplary damages, and attorney’s fees;

d) Affirming the awards to [private respondent Tamondong], representing 13th month pay
for 1997 and 1998, holiday pay for 12 days, and service incentive leave for 1997
totaling P26,418.00; and

e) Ordering the payment of backwages to [private respondent Tamondong] reckoned from

16 September 1998 up to the date of this Decision. 12

Petitioners filed a Motion for Clarification and Partial Reconsideration, while, private
respondent Tamondong filed a Motion for Reconsideration of the said NLRC Decision, but
the NLRC affirmed its original Decision in its Resolution13 dated 25 November 1999.

Dissatisfied with the above-mentioned Decision of the NLRC, private respondents

Tamondong and CUSE filed a Petition for Certiorari under Rule 65 of the Rules of Court
before the Court of Appeals, alleging grave abuse of discretion on the part of the NLRC.
Then, the Court of Appeals in its Decision dated 28 October 2003, granted the said Petition.
The dispositive of which states that:

WHEREFORE, premises considered, the instant Petition for Certiorari is GRANTED and
the herein assailed Decision dated August 25, 1999 of the NLRC, Third Division is
ANNULLED and SET ASIDE. Accordingly, the Decision dated August 7, 1998 of NLRC,
RAB IV Acting Executive Labor Arbiter Pedro C. Ramos, insofar as [private respondent
Tamondong] is concerned is hereby REINSTATED. 14

Consequently, petitioners filed a Motion for Reconsideration of the aforesaid Decision of

the Court of Appeals. Nonetheless, the Court of Appeals denied the said Motion for
Reconsideration for want of convincing and compelling reason to warrant a reversal of its
judgment.

Hence, this present Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure.

In the Memorandum 15 filed by petitioners, they aver that private respondent Tamondong
as Personnel Superintendent of CAPASCO was performing functions of a managerial
employee because he was the one laying down major management policies on personnel
relations such as: issuing memos on company rules and regulations, imposing disciplinary
sanctions such as warnings and suspensions, and executing the same with full power and
discretion. They claim that no further approval or review is necessary for private
respondent Tamondong to execute these functions, and the notations "NOTED BY" of
petitioner Agerro, the Vice-President of petitioner CAPASCO, on the aforesaid memos are
nothing but mere notice that petitioner Agerro was aware of such company actions
performed by private respondent Tamondong. Additionally, private respondent
Tamondong was not only a managerial employee but also a confidential employee having
knowledge of confidential information involving company policies on personnel relations.
Hence, the Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it held that private respondent Tamondong was not a
managerial employee but a mere supervisory employee, therefore, making him eligible to
participate in the union activities of private respondent CUSE.

Petitioners further argue that they are not guilty of illegal dismissal and unfair labor
practice because private respondent Tamondong was validly dismissed and the reason
for preventing him to join a labor union was the nature of his position and functions as
Personnel Superintendent, which position was incompatible and in conflict with his union
activities. Consequently, it was grave abuse of discretion on the part of the Court of
Appeals to rule that petitioner CAPASCO was guilty of illegal dismissal and unfair labor
practice.

Lastly, petitioners maintain that the Court of Appeals gravely abused its discretion when it
reinstated the Decision of Executive Labor Arbiter Pedro C. Ramos holding CAPASCO
liable for backwages, 13th month pay, service incentive leave, moral damages, exemplary
damages, and attorney’s fees.

On the other hand, private respondents, assert that the assailed Decision being a final
disposition of the Court of Appeals is appealable to this Court by a Petition for Review on
Certiorari under Rule 45 of the Rules of Court and not under Rule 65 thereof. They also
claim that petitioners new ground that private respondent Tamondong was a confidential
employee of CAPASCO, thus, prohibited from participating in union activities, is not a
valid ground to be raised in this Petition for Certiorari seeking the reversal of the assailed
Decision and Resolution of the Court of Appeals.

Now, given the foregoing arguments raise by both parties, the threshold issue that must
first be resolved is whether or not the Petition for Certiorari under Rule 65 of the 1997
Rules of Civil Procedure is the proper remedy for the petitioners, to warrant the reversal of
the Decision and Resolution of the Court of Appeals dated 28 October 2003 and 3 June
2004, respectively.

The petition must fail.

The special civil action for Certiorari is intended for the correction of errors of jurisdiction
only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal
office is only to keep the inferior court within the parameters of its jurisdiction or to prevent
it from committing such a grave abuse of discretion amounting to lack or excess of
jurisdiction. 16

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is
directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial
function; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is
no appeal or any plain, speedy, and adequate remedy in the ordinary course of
law. 17 Excess of jurisdiction as distinguished from absence of jurisdiction means that an
act, though within the general power of a tribunal, board or officer is not authorized, and
invalid with respect to the particular proceeding, because the conditions which alone
authorize the exercise of the general power in respect of it are wanting. 18 Without
jurisdiction means lack or want of legal power, right or authority to hear and determine a
cause or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority. 19 Grave abuse of discretion implies such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in
other words, where the power is exercised in an arbitrary manner by reason of passion,
prejudice, or personal hostility, and it must be so patent or gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all
in contemplation of law. 20

In the case before this Court, petitioners fail to meet the third requisite for the proper
invocation of Petition for Certiorari under Rule 65, to wit: that there is no appeal or any
plain, speedy, and adequate remedy in the ordinary course of law. They simply alleged
that the Court of Appeals gravely abuse its discretion which amount to lack or excess of
jurisdiction in rendering the assailed Decision and Resolution. They did not bother to
explain why an appeal cannot possibly cure the errors committed by the appellate court. It
must be noted that the questioned Decision of the Court of Appeals was already a
disposition on the merits; this Court has no remaining issues to resolve, hence, the proper
remedy available to the petitioners is to file Petition for Review under Rule 45 not under
Rule 65.

Additionally, the general rule is that a writ of certiorari will not issue where the remedy of
appeal is available to the aggrieved party. The remedies of appeal in the ordinary course
of law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually
exclusive and not alternative or cumulative. 21 Time and again this Court reminded
members of the bench and bar that the special civil action of Certiorari cannot be used as
a substitute for a lost appeal 22 where the latter remedy is available. Such a remedy will not
be a cure for failure to timely file a Petition for Review on Certiorari under Rule 45. Nor can
it be availed of as a substitute for the lost remedy of an ordinary appeal, especially if such
loss or lapse was occasioned by one’s own negligence or error in the choice of
remedies. 23

In the case at bar, petitioners received on 9 June 2004 the Resolution of the Court of
Appeals dated 3 June 2004 denying their Motion for Reconsideration. Upon receipt of the
said Resolution, they had 15 days or until 24 June 2004 within which to file an appeal by
way of Petition for Review under Rule 45, but instead of doing so, they just allowed the 15
day period to lapse, and then on the 61st day from receipt of the Resolution denying their
Motion for Reconsideration, they filed this Petition for Certiorari under Rule 65 alleging
grave abuse of discretion on the part of the appellate court. Admittedly, this Court, in
accordance with the liberal spirit pervading the Rules of Court and in the interest of justice,
has the discretion to treat a Petition for Certiorari as a Petition for Review on Certiorari
under Rule 45, especially if filed within the reglementary period for filing a Petition for
Review. 24 However, in the present case, this Court finds no compelling reason to justify a
liberal application of the rules, as this Court did in the case of Delsan Transport Lines, Inc.
v. Court of Appeals. 25 In the said case, this Court treated the Petition for Certiorari filed by
the petitioner therein as having been filed under Rule 45 because said Petition was filed
within the 15-day reglementary period for filing a Petition for Review on Certiorari.
Petitioner’s counsel therein received the Court of Appeals Resolution denying their Motion
for Reconsideration on 26 October 1993 and filed the Petition for Certiorari on 8 November
1993, which was within the 15-day reglementary period for filing a Petition for Review on
Certiorari. It cannot therefore be claimed that the Petition was used, as a substitute for
appeal after that remedy has been lost through the fault of the petitioner. 26 Conversely,
such was not the situation in the present case. Hence, this Court finds no reason to justify
a liberal application of the rules.

Accordingly, where the issue or question involves or affects the wisdom or legal
soundness of the decision, and not the jurisdiction of the court to render said decision, the
same is beyond the province of a petition for certiorari. 27 It is obvious in this case that the
arguments raised by the petitioners delved into the wisdom or legal soundness of the
Decision of the Court of Appeals, therefore, the proper remedy is a Petition for Review on
Certiorari under Rule 45. Consequently, it is incumbent upon this Court to dismiss this
Petition.
In any event, granting arguendo, that the present petition is proper, still it is dismissible.
The Court of Appeals cannot be said to have acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in annulling the Decision of the NLRC because
the findings of the Court of Appeals that private respondent Tamondong was indeed a
supervisory employee and not a managerial employee, thus, eligible to join or participate
in the union activities of private respondent CUSE, were supported by evidence on record.
In the Decision of the Court of Appeals dated 28 October 2003, it made reference to the
Memorandum 28 dated 12 September 1996, which required private respondent Tamondong
to observe fixed daily working hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00
pm. This imposition upon private respondent Tamondong, according to the Court of
Appeals, is very uncharacteristic of a managerial employee. To support such a conclusion,
the Court of Appeals cited the case of Engineering Equipment, Inc. v. NLRC 29 where this
Court held that one of the essential characteristics 30 of an employee holding a managerial
rank is that he is not subjected to the rigid observance of regular office hours or maximum
hours of work.

Moreover, the Court of Appeals also held that upon careful examination of the documents
submitted before it, it found out that:

[Private respondent] Tamondong may have possessed enormous powers and was
performing important functions that goes with the position of Personnel Superintendent,
nevertheless, there was no clear showing that he is at liberty, by using his own discretion
and disposition, to lay down and execute major business and operational policies for and
in behalf of CAPASCO. [Petitioner] CAPASCO miserably failed to establish that [private
respondent] Tamondong was authorized to act in the interest of the company using his
independent judgment. x x x. Withal, [private respondent] Tamondong may have been
exercising certain important powers, such as control and supervision over erring
rank-and-file employees, however, x x x he does not possess the power to hire, transfer,
terminate, or discipline erring employees of the company. At the most, the record merely
showed that [private respondent] Tamondong informed and warned rank-and-file
employees with respect to their violations of CAPASCO’s rules and regulations. x x x.
[Also, the functions performed by private respondent such as] issuance of warning 31 to
employees with irregular attendance and unauthorized leave of absences and requiring
employees to explain regarding charges of abandonment of work, are normally performed
by a mere supervisor, and not by a manager. 32

Accordingly, Article 212(m) of the Labor Code, as amended, differentiates supervisory

employees from managerial employees, to wit: supervisory employees are those who, in
the interest of the employer, effectively recommend such managerial actions, if the
exercise of such authority is not merely routinary or clerical in nature but requires the use
of independent judgment; whereas, managerial employees are those who are vested with
powers or prerogatives to lay down and execute management policies and/or hire,
transfer, suspend, lay off, recall, discharge, assign or discipline employees. Thus, from
the foregoing provision of the Labor Code, it can be clearly inferred that private
respondent Tamondong was just a supervisory employee. Private respondent
Tamondong did not perform any of the functions of a managerial employee as stated in
the definition given to it by the Code. Hence, the Labor Code 33 provisions regarding
disqualification of a managerial employee from joining, assisting or forming any labor
organization does not apply to herein private respondent Tamondong. Being a
supervisory employee of CAPASCO, he cannot be prohibited from joining or participating
in the union activities of private respondent CUSE, and in making such a conclusion, the
Court of Appeals did not act whimsically, capriciously or in a despotic manner, rather, it
was guided by the evidence submitted before it. Thus, given the foregoing findings of the
Court of Appeals that private respondent is a supervisory employee, it is indeed an unfair
labor practice 34 on the part of petitioner CAPASCO to dismiss him on account of his union
activities, thereby curtailing his constitutionally guaranteed right to self-organization. 35

With regard to the allegation that private respondent Tamondong was not only a
managerial employee but also a confidential employee, the same cannot be validly raised
in this Petition for Certiorari. It is settled that an issue which was not raised in the trial court
cannot be raised for the first time on appeal. This principle applies to a special civil action
for certiorari under Rule 65. 36 In addition, petitioners failed to adduced evidence which will
prove that, indeed, private respondent was also a confidential employee.

WHEREFORE, premises considered, the instant Petition is DISMISSED. The Decision

and Resolution of the Court of Appeals dated 28 October 2003 and 3 June 2004,
respectively, in CA-G.R. SP No. 57179, which annulled the Decision of the NLRC in NLRC
Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision of Acting
Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998, is hereby AFFIRMED. With
costs against petitioners.

SO ORDERED.
G.R. No. 207971

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,

vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the January 8, 2013 Decision of the Court of
1 2

Appeals (CA) which dismissed the Petition for Certiorari in CA-G.R. SP No. 114122, and its
3

subsequent June 27, 2013 Resolution denying herein petitioner's Motion for
4

Reconsideration. 5

Factual Antecedents

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit

educational institution. Respondent Asian Institute of Management Faculty Association
(AFA) is a labor organization composed of members of the AIM faculty, duly registered
under Certificate of Registration No. NCR-UR-12-4076-2004.

On May 16, 2007, respondent filed a petition for certification election seeking to
6

represent a bargaining unit in AIM consisting of forty (40) faculty members. The case
was docketed as DOLE Case No. NCR-OD-M-0705-007. Petitioner opposed the petition,
claiming that respondent's members are neither rank-and-file nor supervisory, but rather,
managerial employees. 7

On July 11, 2007, petitioner filed a petition for cancellation of respondent's certificate
of registration - docketed as DOLE Case No. NCROD-0707-001-LRD - on the grounds
8

of misrepresentation in registration and that respondent is composed of managerial

employees who are prohibited from organizing as a union.

On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued an
Order denying the petition for certification election on the ground that AIM' s faculty
9

members are managerial employees. This Order was appealed by respondent before the
Secretary of the Department of Labor and Employment (DOLE), who reversed foe same
10

via a February 20, 2009 Decision and May 4, 2009 Resolution, decreeing thus:
11 12

WHEREFORE, the appeal filed by the Asian Institute of Management

Faculty Association (AIMFA) is GRANTED. The Order dated 30 August
2007 of DOLE-NCR Mediator-Arbiter Michael T. Parado is hereby
REVERSED and SET ASIDE.
 Accordingly, let the entire records of the case be remanded to DOLEN CR
for the conduct of a certification election among the faculty members of the
Asian Institute of Management (AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION

(AIMFA); and

2. No Union.

SO ORDERED. 13

Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order dated February 16,14

2009 was issued by DOLE-NCR Regional Director Raymundo G. Agravante granting

AIM's petition for cancellation of respondent's certificate of registration and ordering its
delisting from the roster of legitimate labor organizations. 1bis Order was appealed by
respondent before the Bureau labor Relations (BLR), which, in a December 29, 2009
15

Decision, reversed the same and ordered respondent's retention in the roster of
16

legitimate labor organizations. The BLR held that the grounds relied upon in the petition
for cancellation are not among the grounds authorized under Article 239 of the Labor
Code, and that respondent's members are not managerial employees. Petitioner moved
17

to reconsider, but was rebuffed in a March 18, 2010 Resolution. 18

CA-G.R. SP No.109487 and G.R. No.197089

Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE Secretary's
February 20, 2009 Decision and May 4, 2009 Resolution relative to DOLE Case No.
NCR-OD-M-0705-007, or respondent's petition for certification election. Docketed as
CA-G.R. SP No. 109487, the petition is based on the arguments that 1) the bargaining unit
within AIM sought to be represented is composed of managerial employees who are not
eligible to join, assist, or form any labor organization, and 2) respondent is not a legitimate
labor organization that may conduct a certification election.

On October 22, 2010, the CA rendered its Decision 19

containing the following
pronouncement:

AIM insists that the members of its tenure-track faculty are managerial
employees, and therefore, ineligible to join, assist or form a labor
organization. It ascribes grave abuse of discretion on SOLE for its rash
20

conclusion that the members of said tenure-track faculty are not

managerial employees solely because the faculty's actions are still subject
to evaluation, review or final approval by the board of trustees ("BOT').
AIM argues that the BOT does not manage the day-to-day affairs, nor the
making and implementing of policies of the Institute, as such functions are
vested with the tenure-track faculty.
We agree.

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x x x

(m) 'Managerial employee' is one who is vested with

powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any
of the above definitions are considered rank-and-file
employees for purposes of this Book.'

There are, therefore, two (2) kinds of managerial employees under Art.
212(m) of the Labor Code. Those who 'lay down x x x management
policies', such as the Board of Trustees, and those who 'execute
management policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees'.

xxxx

On its face, the SOLE's opinion is already erroneous because in claiming

that the 'test of 'supervisory' or 'managerial status' depends on whether a
person possesses authority to act in the interest of his employer in the
matter specified in Article 212(m) of the Labor Code and Section l(m) of
its Implementing Rules', he obviously was referring to the old definition
of a managerial employee. Such is evident in his use of 'supervisory or
managerial status', and reference to 'Section l(m) of its Implementing
Rules'. For presently, as aforequoted in Article 212(m) of the Labor Code
and as amended by Republic Act 6715 which took effect on March 21,
1989, a managerial employee is already different from a supervisory
employee. x x x

xxxx

In further opining that a managerial employee is one whose 'authority is

not merely routinary or clerical in nature but requires the use of
independent judgment', a description which fits now a supervisory
employee under Section l(t), Rule I, Book V of the Omnibus Rules
Implementing the Labor Code, it then follows that the SOLE was not
aware of the change in the law and thus gravely abused its discretion
amounting to lack of jurisdiction in concluding that
AIM's 'tenure-track' faculty are not managerial employees.

SOLE further committed grave abuse of discretion when it concluded that

said tenure-track faculty members are not managerial employees on the
basis of a 'footnote' in AIM's Policy Manual, which provides that
'the policy[-] making authority of the faculty members is merely
recommendatory in nature considering that the faculty standards they
formulate are still subject to evaluation, review or final approval by the
[AIM]'s Board of Trustees'. x x x

xxxx

Clearly, AIM's tenure-track faculty do not merely recommend faculty

standards. They 'determine all faculty standards', and are thus
1âwphi1

managerial employees. The standards' being subjected to the approval of

the Board of Trustees would not make AIM's tenure-track faculty
non-managerial because as earlier mentioned, managerial employees are
now of two categories: (1) those who 'lay down policies', such as the
members of the Board of Trustees, and (2) those
who 'execute management policies (etc.)’, such as AIM's tenure-track
faculty.

xxxx

It was also grave abuse of discretion on the part of the SOLE when he
opined that AIM' s tenure-track faculty members are not managerial
employees, relying on an impression that they were subjected to rigid
observance of regular hours of work as professors. x x x

xxxx

More importantly, it behooves the SOLE to deny AFA's appeal in light

of the February 16, 2009 Order of Regional Director Agravante
delisting AFA from the roster of legitimate labor organizations. For,
only legitimate labor organizations are given the right to be certified
as sole and exclusive bargaining agent in an establishment.

xxxx

Here, the SOLE committed grave abuse of discretion by giving due course
to AFA's petition for certification election, despite the fact that: (1) AFA's
members are managerial employees; and (2) AFA is not a legitimate labor
organization. 'These facts rendered AFA ineligible, and without any right to
 file a petition for certification election, the object of which is to determine
the sole and exclusive bargaining representative of qualified AIM
employees.

WHEREFORE, the instant petition is GRANTED. The assailed Decision

dated February 20, 2009 and Resolution dated May 4, 2009 are
hereby REVERSED and SET ASIDE. The Order dated August 30, 2007 of
Mediator-Arbiter Parado is hereby REINSTATED.

SO ORDERED. (Emphasis in the original)

21

Respondent sought reconsideration, but was denied. It thus instituted a Petition for
Review on Certiorari before this Court on July 4, 2011. The Petition, docketed as G.R. No.
197089, remains pending to date.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition

for cancellation of respondent's certificate of registration, petitioner filed on May 24, 20 l 0
a Petition for Certiorari before the CA, questioning the BLR's December 29, 2009 decision
22

and March 18, 2010 resolution. The petition, docketed as CA-G.R. SP No. 114122, alleged
that the BLR committed grave abuse of discretion in granting respondent's appeal and
affirming its certificate of registration notwithstanding that its members are managerial
employees who may not join, assist, or form a labor union or organization.

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

xxxx

It is therefore incumbent upon the Institute to prove that the BLR

committed grave abuse of discretion in issuing the questioned
Decision. Towards this end, AIM must lay the basis by showing that any of
1âwphi1

the grounds provided under Article 239 of the Labor Code, exists, to wit:

Article 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.

Article 238 of the Labor Code provides that the enumeration of the grounds
for cancellation of union registration, is exclusive; in other words, no other
grow1ds for cancellation is acceptable, except for the three (3) grounds
stated in Article 239. The scope of the grounds for cancellation has been
explained-

For the purpose of de-certifying a union such as

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

The bare fact that two signatures appeared twice on the

list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel
respondent's certificate of registration. The cancellation of
a union's registration doubtless has an impairing
dimension on the right of labor to self-organization. For
fraud and misrepresentation to be grounds for cancellation
of union registration under the Labor Code, the nature of
the fraud andmisrepresentation must be grave and
compelling enough to

vitiate the consent of a majority of union members. 23

In this regard, it has also been held that:

Another factor which militates against the veracity of the

allegations in the Sinumpaang Petisyon is the lack of
particularities on how, when and where respondent union
perpetrated the alleged fraud on each member. Such
details are crucial for, in the proceedings for cancellation of
union registration on the ground of fraud or
misrepresentation, what needs to be established is that
 the specific act or omission of the union deprived the
complaining employees-members of their right to choose. 24

A cursory reading of the Petition shows that AIM did NOT allege any
specific act of fraud or misrepresentation committed by AFA. What is clear
is that the Institute seeks the cancellation of the registration of AFA based
on Article 245 of the Labor Code on the ineligibility of managerial
employees to form or join labor unions. Unfortunately for the petitioner,
even assuming that there is a violation of Article 245, such violation will not
result in the cancellation of the certificate of registration of a labor
organization.

It should be stressed that a Decision had already been issued by the

DOLE in the Certification Election case; and the Decision ordered the
conduct of a certification election among the faculty members of the
Institute, basing its directive on the finding that the members of AFA were
not managerial employees and are therefore eligible to form, assist and
join a labor union. As a matter of fact, the certification election had already
been held on October 16, 2009, albeit the results have not yet been
resolved as inclusion/exclusion proceedings are still pending before the
DOLE. The remedy available to the Institute is not the instant Petition, but
to question the status of the individual union members of the AFA in the
inclusion/exclusion proceedings pursuant to Article 245-A of the Labor
Code, which reads:

Article 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.

Petitioner insists that Article 245-A is not applicable to this case as all AF A
members are managerial employees. We are not persuaded.

The determination of whether any or all of the members of AFA should be

considered as managerial employees is better left to the DOLE because,

It has also been established that in the determination of

whether or not certain employees are managerial
employees, this Court accords due respect and therefore
sustains the findings of fact made by quasi-judicial
agencies which are supported by substantial evidence
considering their expertise in their respective fields.25
 From the discussion, it is manifestly clear that the petitioner foiled to prove
that the BLR committed grave abuse of discretion; consequently, the
Petition must fail.

WHEREFORE, the Petition is hereby DENIED. The Decision and

Resolution of public respondent Bureau of Labor Relations in
BLR-A-C-19-3-6-09 (NCR-OD-0707-001) are hereby AFFIRMED.

SO ORDERED. (Emphasis in the original)

26

Petitioner filed its Motion for Reconsideration, which was denied by the CA via its June 27,
2013 Resolution. Hence, the instant Petition.

In a November 10, 2014 Resolution, the Court resolved to give due course to the Petition.
27

Issue

Petitioner claims that the CA seriously erred in affirming the dispositions of the BLR and
thus validating the respondent's certificate of registration notwithstanding the fact that its
members are all managerial employees who are disqualified from joining, assisting, or
forming a labor organization.

Petitioner's Arguments

Praying that the assailed CA dispositions be set aside and that the DOLE-NCR Regional
Director's February 16, 2009 Order granting AIM's petition for cancellation of respondent's
certificate of registration and ordering its delisting from the roster of legitimate labor
organizations be reinstated instead, petitioner maintains in its Petition and Reply that 28

respondent's members are all managerial employees; that the CA erred in declaring that
even if respondent's members are all managerial employees, this alone is not a ground for
cancellation of its certificate of registration; that precisely, the finding in DOLE Case No.
NCR-ODM- 0705-007, which the CA affirmed in CA-G.R. SP No. 109487, is that
respondent's members are managerial employees; that respondent's declaration that its
members are eligible to join, assist, or form a labor organization is an act of
misrepresentation, given the finding in CA-G.R. SP No. 109487 that they are managerial
employees; and that the grounds for cancellation of union registration enumerated in
Article 239 of the Labor Code are not exclusive.

Respondent's Arguments

In its Comment, respondent maintains that the CA was right to treat petitioner’s case for
29

cancellation of its union registration with circumspection; that petitioner's ground for filing
the petition for cancellation is not recognized under Article 239; that petitioner's accusation
of misrepresentation is unsubstantiated, and is being raised for the first time at this stage;
that its members are not managerial employees; and that petitioner's opposition to
respondent's attempts at self-organization constitutes harassment, oppression, and
violates the latter's rights under the Labor Code and the Constitution.

Our Ruling

In Holy Child Catholic School v. Hon. Sto. Tomas, this Court declared that "[i]n case of
30

alleged inclusion of disqualified employees in a union, the proper procedure for an

employer like petitioner is to directly file a petition for cancellation of the union's certificate
of registration due to misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended."

On the basis of the ruling in the above-cited case, it can be said that petitioner was correct
in filing a petition for cancellation of respondent's certificate of registration. Petitioner's
sole ground for seeking cancellation of respondent's certificate of registration - that its
members are managerial employees and for this reason, its registration is thus a patent
nullity for being an absolute violation of Article 245 of the Labor Code which declares that
managerial employees are ineligible to join any labor organization --- is, in a sense, an
accusation that respondent is guilty of misrepresentation for registering under the claim
that its members are not managerial employees.

However, the issue of whether respondent's members are managerial employees is still
pending resolution by way of petition for review on certiorari in G.R. No. 197089, which is
the culmination of all proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where the
issue relative to the nature of respondent's membership was first raised by petitioner itself
and is there fiercely contested. The resolution of this issue cannot be pre-empted; until it is
determined with finality in G.R. No. l 97089, the petition for cancellation of respondent's
certificate of registration on the grounds alleged by petitioner cannot be resolved. As a
matter of courtesy and in order to avoid conflicting decisions, We must await the
resolution of the petition in G.R. No. 197089.

x x x If a particular point or question is in issue in the second action, and

the judgment will depend on the determination of that particular point or
question, a former judgment between the same parties or their privies will
be final and conclusive in the second if that same point or question was in
issue and adjudicated in the first suit. x x x Identity of cause of action is not
required, but merely identity of issues. (Citation omitted)
31

WHEREFORE, considering that the outcome of this case depends on the resolution of the
issue relative to the nature of respondent's membership pending in G.R. No. 197089, this
case is ordered CONSOLIDATED with G.R. No. 197089.
ART. 247-249 (258-260)

G.R. No. 178647 February 13, 2009

GENERAL SANTOS COCA-COLA PLANT FREE WORKERS

UNION-TUPAS, Petitioner,
vs.
COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF
APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, Respondents.

RESOLUTION

NACHURA, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil
Procedure, petitioner General Santos Coca-Cola Plant Free Workers Union-Tupas (Union)
is seeking the reversal of the April 18, 2006 Decision1and May 30, 2007 Resolution2 of the
Court of Appeals in CA-G.R. SP No. 80916. The CA affirmed the January 31, 2003 and
August 29, 2003 Resolutions3 of the National Labor Relations Commission (NLRC) in favor
of respondent Coca-Cola Bottlers Phil., Inc. (CCBPI).

Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due to
the Asian economic crisis, decrease in sales, and tougher competition. To curb the
negative effects on the company, it implemented three (3) waves of an Early Retirement
Program.4 Meanwhile, there was an inter-office memorandum sent to all of CCBPI’s Plant
Human Resources Managers/Personnel Officers, including those of the CCBPI General
Santos Plant (CCBPI Gen San) mandating them to put on hold "all requests for hiring to fill
in vacancies in both regular and temporary positions in [the] Head Office and in the
Plants." Because several employees availed of the early retirement program, vacancies
were created in some departments, including the production department of CCBPI Gen
San, where members of petitioner Union worked. This prompted petitioner to negotiate
with the Labor Management Committee for filling up the vacancies with permanent
employees. No resolution was reached on the matter.5

Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP
Services Corporation (JLBP), a company in the business of providing labor and
manpower services, including janitorial services, messengers, and office workers to
various private and government offices.6

On January 21, 2002, petitioner filed with the National Conciliation and Mediation Board
(NCMB), Regional Branch 12, a Notice of Strike on the ground of alleged unfair labor
practice committed by CCBPI Gen San for contracting-out services regularly performed by
union members ("union busting"). After conciliation and mediation proceedings before the
NCMB, the parties failed to come to an amicable settlement. On July 3, 2002, CCBPI filed
a Petition for Assumption of Jurisdiction with the Office of the Secretary of Labor and
Employment. On July 26, 2002, the Secretary of Labor issued an Order enjoining the
threatened strike and certifying the dispute to the NLRC for compulsory arbitration.7 1avvphi1

In a Resolution8 dated January 31, 2003, the NLRC ruled that CCBPI was not guilty of
unfair labor practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the
validity of the "Going-to-the-Market" (GTM) system implemented by the company, which
called for restructuring its selling and distribution system, leading to the closure of certain
sales offices and the elimination of conventional sales routes. The NLRC held that
petitioner failed to prove by substantial evidence that the system was meant to curtail the
right to self-organization of petitioner’s members. Petitioner filed a motion for
reconsideration, which the NLRC denied in a Resolution9 dated August 29, 2003. Hence,
petitioner filed a Petition for Certiorari before the CA.

The CA issued the assailed Decision10 on April 18, 2006 upholding the NLRC’s finding that
CCBPI was not guilty of unfair labor practice. The CA based its decision on the validity of
CCBPI’s contracting out of jobs in its production department. It held that the contract
between CCBPI and JLBP did not amount to labor-only contracting. It found that JLBP
was an independent contractor and that the decision to contract out jobs was a valid
exercise of management prerogative to meet exigent circumstances. On the other hand,
petitioner failed to adduce evidence to prove that contracting out of jobs by the company
resulted in the dismissal of petitioner’s members, prevented them from exercising their
right to self-organization, led to the Union’s demise or that their group was singled out by
the company. Consequently, the CA declared that CCBPI was not guilty of unfair labor
practice.

Its motion for reconsideration having been denied,11 petitioner now comes to this Court
seeking the reversal of the CA Decision.

The petition is bereft of merit. Hence, we deny the Petition.

Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be
raised in a Petition for Review on Certiorari.12

There is a question of law if the issue raised is capable of being resolved without need of
reviewing the probative value of the evidence. The resolution of the issue must rest solely
on what the law provides on a given set of circumstances. Once it is clear that the issue
invites a review of the evidence presented, the question posed is one of fact. If the query
requires a re-evaluation of the credibility of witnesses, or the existence or relevance of
surrounding circumstances and their relation to one another, the issue in that query is
factual.13

An examination of the issues raised by petitioner reveals that they are questions of fact.
The issues raised, i.e., whether JLBP is an independent contractor, whether CCBPI’s
contracting-out of jobs to JLBP amounted to unfair labor practice, and whether such action
was a valid exercise of management prerogative, call for a re-examination of evidence,
which is not within the ambit of this Court’s jurisdiction.

Moreover, factual findings of the NLRC, an administrative agency deemed to have

acquired expertise in matters within its jurisdiction, are generally accorded not only
respect but finality especially when such factual findings are affirmed by the CA.14

Furthermore, we find no reversible error in the assailed Decision.1avvphi1

It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI
Gen San was due to the GTM system, which actually affected CCBPI’s sales and
marketing departments, and had nothing to do with petitioner’s complaint. However, this
does not diminish the NLRC’s finding that JLBP was a legitimate, independent contractor
and that CCBPI Gen San engaged the services of JLBP to meet business exigencies
created by the freeze-hiring directive of the CCBPI Head Office.

On the other hand, the CA squarely addressed the issue of job contracting in its assailed
Decision and Resolution. The CA itself examined the facts and evidence of the
parties15 and found that, based on the evidence, CCBPI did not engage in labor-only
contracting and, therefore, was not guilty of unfair labor practice.

The NLRC found – and the same was sustained by the CA – that the company’s action to
contract-out the services and functions performed by Union members did not constitute
unfair labor practice as this was not directed at the members’ right to self-organization.

Article 248 of the Labor Code provides:

ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. – It shall be unlawful for an

employer to commit any of the following unfair labor practices:

xxx

(c) To contract out services or functions being performed by union members when such
will interfere with, restrain or coerce employees in the exercise of their right to
self-organization;

xxx

Unfair labor practice refers to "acts that violate the workers’ right to organize." The
prohibited acts are related to the workers’ right to self-organization and to the observance
of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices.16

Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair
labor practice. It was the Union that had the burden of adducing substantial evidence to
support its allegations of unfair labor practice,17which burden it failed to discharge.
WHEREFORE, the foregoing premises considered, the Petition is DENIED. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 80916 are
AFFIRMED.

G.R. No. 180892 April 7, 2009

UST FACULTY UNION, Petitioner,

vs.
UNIVERSITY OF SANTO TOMAS, REV. FR. ROLANDO DE LA ROSA, REV. FR.
RODELIO ALIGAN, DOMINGO LEGASPI, and MERCEDES HINAYON, Respondents.

DECISION

VELASCO, JR., J.:

The Case

This Petition for Review on Certiorari under Rule 45 seeks the reversal of the June 14,
2007 Decision1 and November 26, 2007 Resolution2 of the Court of Appeals (CA) in
CA-G.R. SP No. 92236. The CA Decision affirmed the November 28, 20033 and July 29,
20054 Resolutions of the Third Division of the National Labor Relations Commission
(NLRC) in NLRC CA No. 037320-03. These Resolutions, in turn, affirmed the August 15,
2003 Decision of Labor Arbiter Edgardo M. Madriaga in NLRC NCR Case No. 10-06255-96.
Entitled University of Santo Tomas Faculty Union v. University of Santo Tomas, Rev. Fr.
Rolando De La Rosa, Rev. Fr. Rodelio Aligan, Domingo Legaspi, and Mercedes Hinayon,
these decisions and resolutions were all in favor of respondents that were found not guilty
of Unfair Labor Practice (ULP).

The Facts

On September 21, 1996, the University of Santo Tomas Faculty Union (USTFU) wrote a
letter5 to all its members informing them of a General Assembly (GA) that was to be held
on October 5, 1996. The letter contained an agenda for the GA which included an election
of officers. The then incumbent president of the USTFU was Atty. Eduardo J. Mariño, Jr.

On October 2, 1996, Fr. Rodel Aligan, O.P., Secretary General of the UST, issued a
Memorandum6 allowing the request of the Faculty Clubs of the university to hold a
convocation on October 4, 1996.

Members of the faculties of the university attended the convocation, including members of
the USTFU, without the participation of the members of the UST administration. Also
during the convocation, an election for the officers of the USTFU was conducted by a
group called the Reformist Alliance. Upon learning that the convocation was intended to
be an election, members of the USTFU walked out. Meanwhile, an election was
conducted among those present, and Gil Gamilla and other faculty members (Gamilla
Group) were elected as the president and officers, respectively, of the union. Such
election was communicated to the UST administration in a letter dated October 4,
1996.7 Thus, there were two (2) groups claiming to be the USTFU: the Gamilla Group and
the group led by Atty. Mariño, Jr. (Mariño Group).

On October 8, 1996, the Mariño Group filed a complaint for ULP against the UST with the
Arbitration Branch of the NLRC, docketed as NLRC NCR Case No. 10-06255-96. It also
filed on October 11, 1996 a complaint with the Office of the Med-Arbiter of the Department
of Labor and Employment (DOLE), praying for the nullification of the election of the
Gamilla Group as officers of the USTFU. The complaint was docketed as Case No.
NCR-OD-M-9610-016 and entitled UST Faulty Union, Gil Y. Gamilla, Corazon Qui, et al., v.
Eduardo J. Mariño, Jr., Ma. Melvyn Alamis, Norma Collantes, et al.

On December 3, 1996, a Collective Bargaining Agreement8 (CBA) was entered into by the
Gamilla Group and the UST. The CBA superseded an existing CBA entered into by the
UST and USTFU which was intended for the period of June 1, 1993 to May 31, 1998.9

On January 27, 1997, Gamilla, accompanied by the barangay captain in the area, Dupont
E. Aseron, and Justino Cardenas, Chief Security Officer of the UST, padlocked the office
of the USTFU. Afterwards, an armed security guard of the UST was posted in front of the
USTFU office.

On February 11, 1997, the med-arbiter issued a Resolution, declaring the election of the
Gamilla group as null and void and ordering that this group cease and desist from
performing the duties and responsibilities of USTFU officers. This Resolution was
appealed to the Director of the Bureau of Labor Relations (BLR), docketed as BLR Case
No. A-8-49-97 and entitled UST Faulty Union, Gil Y. Gamilla, Corazon Qui, et al. v.
Med-Arbiter Tomas F. Falconitin of the National Capital Region, Department of Labor and
Employment (DOLE), Eduardo J. Mariño, Jr., et al. Later, the director issued a Resolution
dated August 15, 1997 affirming the Resolution of the med-arbiter. His Resolution was
then appealed to this Court which rendered its November 16, 1999 Decision10 in G.R. No.
131235 upholding the ruling of the BLR.

Thus, on January 21, 2000, USTFU filed a Manifestation11 with the Arbitration Branch of
the NLRC in NLRC Case No. 10-06255-96, informing it of the Decision of the Court.
Thereafter, on August 15, 2003, the Arbitration Branch of the NLRC issued a
Decision12 dismissing the complaint for lack of merit.

The complaint was dismissed on the ground that USTFU failed to establish with clear and
convincing evidence that indeed UST was guilty of ULP. The acts of UST which USTFU
complained of as ULP were the following: (1) allegedly calling for a convocation of faculty
members which turned out to be an election of officers for the faculty union; (2)
subsequently dealing with the Gamilla Group in establishing a new CBA; and (3) the
assistance to the Gamilla Group in padlocking the USTFU office.

In his Decision, the labor arbiter explained that the alleged Memorandum dated October 2,
1996 merely granted the request of faculty members to hold such convocation. Moreover,
by USTFU’s own admission, no member of the UST administration attended or
participated in the convocation.

As to the CBA, the labor arbiter ruled that when the new CBA was entered into, (1) the
Gamilla Group presented more than sufficient evidence to establish that they had been
duly elected as officers of the USTFU; and (2) the ruling of the med-arbiter that the
election of the Gamilla Group was null and void was not yet final and executory. Thus,
UST was justified in dealing with and entering into a CBA with the Gamilla Group,
including helping the Gamilla Group in securing the USTFU office.

The USTFU appealed the labor arbiter’s Decision to the Third Division of the NLRC which
rendered a Resolution dated November 28, 2003 affirming the Decision of the labor arbiter.
USTFU’s Motion for Reconsideration of the NLRC’s November 28, 2003 Resolution was
denied in a Resolution dated July 29, 2005.

The case was then elevated to the CA which rendered the assailed Decision affirming the
Resolutions of the NLRC. The CA also denied the Motion for Reconsideration of USTFU
in the assailed resolution.

Hence, we have this petition.

The Issues

1. The Honorable Court of Appeals committed serious and reversible error when it
dismissed the Petition for Certiorari in CA-G.R. SP No. 92236 and sustained the National
Labor Relations Commission’s ruling that the herein respondents are not guilty of Unfair
Labor Practice despite abundance of evidence showing that Unfair Labor Practices were
indeed committed.

2. The Honorable Court of Appeals committed serious and reversible error when it
manifestly overlooked relevant facts not disputed by the parties which, if properly
considered, would justify a different conclusion and in rendering a judgment that is based
on a misapprehension of facts.13

The Court’s Ruling

The petition must be denied.

UST Is Not Guilty of ULP

Petitioner claims that given the factual circumstances attendant to the instant case, the
labor arbiter, NLRC, and CA should have found that UST is guilty of ULP. Petitioner
enumerates the acts constituting ULP as follows: (1) Atty. Domingo Legaspi, the legal
counsel for the UST, conducted a faculty meeting in his office, supplying derogatory
information about the Mariño Group; (2) respondents provided the Gamilla Group with the
facilities and forum to conduct elections, in the guise of a convocation; and (3)
respondents transacted business with the Gamilla Group such as the processing of
educational and hospital benefits, deducting USTFU dues from the faculty members
without turning over the dues to the Mariño Group, and entering into a CBA with them.

Additionally, petitioner claims that the CA, NLRC, and labor arbiter ignored vital pieces of
evidence. These were the Affidavit dated January 21, 2000 of Edgar Yu, the Certification
dated January 27, 1997 of Alexander Sibug, and the picture of a security guard posted
outside the USTFU office purportedly to "prevent entry into and exit from the union office."

The concept of ULP is contained in Article 247 of the Labor Code which states:

Article 247. Concept of unfair labor practice and procedure for prosecution
thereof.––Unfair labor practices violate the constitutional right of workers and employees
to self-organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations. (Emphasis supplied.)

Notably, petitioner claims that respondents violated paragraphs (a) and (d) of Art. 248 of
the Code which provide:

Article 248. Unfair labor practices of employers.––It shall be unlawful for an employer to
commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;

xxxx

(d) To initiate, dominate, assist or otherwise interfere with the formation or administration
of any labor organization, including the giving of financial or other support to it or its
organizers or supporters.

The general principle is that one who makes an allegation has the burden of proving it.
While there are exceptions to this general rule, in the case of ULP, the alleging party has
the burden of proving such ULP.
Thus, we ruled in De Paul/King Philip Customs Tailor v. NLRC that "a party alleging a
critical fact must support his allegation with substantial evidence. Any decision based on
unsubstantiated allegation cannot stand as it will offend due process."14

While in the more recent and more apt case of Standard Chartered Bank Employees
Union (NUBE) v. Confesor, this Court enunciated:

In order to show that the employer committed ULP under the Labor Code, substantial
evidence is required to support the claim. Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.15 (Emphasis supplied.)

In other words, whether the employee or employer alleges that the other party committed
ULP, it is the burden of the alleging party to prove such allegation with substantial
evidence. Such principle finds justification in the fact that ULP is punishable with both civil
and/or criminal sanctions.16

Given the above rulings of this Court, we shall now examine the acts of respondents
which allegedly constitute ULP.

With regard to the alleged derogatory remarks of Atty. Legaspi, the three tribunals
correctly ruled that there was no evidence to support such allegation. The alleged
evidence to support petitioner’s claim, the Affidavit dated January 21, 2000 of Yu, is
unacceptable. In the Affidavit it is stated that: "6. That in the said meeting, Atty. Legaspi
gave the participants information that are derogatory to the officers of the UST Faculty
Union."17

It may be observed that the information allegedly provided during the meeting as
"derogatory" is a conclusion of law and not of fact. What may be derogatory to Yu may not
be punishable under the law. There was, therefore, no fact that was established by the
Affidavit. Hence, petitioner failed to present evidence in support of its claim that
respondents committed ULP through alleged remarks of Atty. Legaspi.

As to the convocation, petitioner avers that: "Indeed, Respondents, under the guise of a
faculty convocation, ordered the suspension of classes and required the faculty members
to attend the supposed faculty convocation which was to be held at the Education
Auditorium of the University of Santo Tomas."18 An examination of the Memorandum
dated October 2, 199619 would, however, rebut such allegation. It stated:

MEMORANDUM TO

THE DEANS, REGENTS, PRINCIPALS

AND HEADS OF DEPARTMENTS

Re: Convocation of Faculty Club

 As per request of the Faculty Clubs of the different Faculties, Colleges,
Schools and Institutes in the University through their Presidents, we are
allowing them to hold a convocation on Friday, October 4, 1996 at 9:00 in
the morning to 12:00 noon at the Education Auditorium.

The officers and members of said faculty clubs are, therefore, excused
from their classes on Friday from 9:00 to 12:00 noon to allow them to
attend.

Regular classes shall resume at 1:00 in the afternoon. Please be guided

accordingly.

Thank you.

FR. RODEL ALIGAN, O.P. (Sgd.)

Secretary General

In no way can the contents of this memorandum be interpreted to mean that faculty
members were required to attend the convocation. Not one coercive term was used in the
memorandum to show that the faculty club members were compelled to attend such
convocation. And the phrase "we are allowing them to hold a convocation" negates any
idea that the UST would participate in the proceedings.

Moreover, the CA ruled properly:

More importantly, USTFU itself even admitted that during the October [4], 1996
convocation/election, not a single University Official was present. And the Faculty
Convocation was held without the overt participation of any UST Administrator or Official.20

In other words, the Memorandum dated October 2, 1996 does not support a claim that
UST organized the convocation in connivance with the Gamilla Group.

Anent UST’s dealing with the Gamilla Group, including the processing of faculty members’
educational and hospitalization benefits, the labor arbiter ruled that:

Neither are We persuaded by complainant’s stand that respondents’ acquiescence to

bargain with USTFU, through Gamilla’s group, constitutes unfair labor practice. x x x Such
conduct alone, uncorroborated by other overt acts leading to the commission of ULP,
does not conclusively show and establish the commission of such unlawful acts.21

The fact of the matter is, the Gamilla Group represented itself to respondents as the duly
elected officials of the USTFU.22 As such, respondents were bound to deal with them.

Art. 248(g) of the Labor Code provides that:

ART. 248. Unfair labor practices of employers.––It shall be unlawful for an employer to
commit any of the following unfair labor practice:

xxxx

(g) To violate the duty to bargain collectively as prescribed by this Code.

Correlatively, Art. 250(a) of the Code provides:

ART. 250. Procedure in collective bargaining.––The following procedures shall be

observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon
the other party with a statement of its proposals. The other party shall make a reply
thereto not later than ten (10) calendar days from receipt of such notice;

Moreover, Art. 252 of the Code defines the duty to bargain collectively as:

ART. 252. Meaning of duty to bargain collectively.––The duty to bargain collectively

means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any concession.
(Emphasis ours.)

In the instant case, until our Decision in G.R. No. 131235 that the Gamilla Group was not
validly elected into office, there was no reason to believe that the members of the Gamilla
Group were not the validly elected officers and directors of USTFU. To reiterate, the
Gamilla Group submitted a Letter dated October 4, 1996 whereby it informed Fr. Rolando
De La Rosa that its members were the newly elected officers and directors of USTFU. In
the Letter, every officer allegedly elected was identified with the Letter signed by the
alleged newly elected Secretary General and President, Ma. Lourdes Medina and Gamilla,
respectively.

More important though is the fact that the records are bereft of any evidence to show that
the Mariño Group informed the UST of their objections to the election of the Gamilla
Group. In fact, there is even no evidence to show that the scheduled elections on October
5, 1996 that was supposed to be presided over by the Mariño Group ever pushed through.
Instead, petitioner filed a complaint with the med-arbiter on October 11, 1996 praying for
the nullification of the election of the Gamilla Group.
lavvphil.zw+

As such, there was no reason not to recognize the Gamilla Group as the new officers and
directors of USTFU. And as stated in the above-quoted provisions of the Labor Code, the
UST was obligated to deal with the USTFU, as the recognized representative of the
bargaining unit, through the Gamilla Group. UST’s failure to negotiate with the USTFU
would have constituted ULP.

It is not the duty or obligation of respondents to inquire into the validity of the election of
the Gamilla Group. Such issue is properly an intra-union controversy subject to the
jurisdiction of the med-arbiter of the DOLE. Respondents could not have been expected to
stop dealing with the Gamilla Group on the mere accusation of the Mariño Group that the
former was not validly elected into office.

The subsequent ruling of this Court in G.R. No. 131235 that the Gamilla Group was not
validly elected into office cannot support petitioner’s allegation of ULP. Had respondents
dealt with the Gamilla Group after our ruling in G.R. No. 131235 had become final and
executory, it would have been a different story. As the CA ruled correctly, until the validity
of the election of the Gamilla Group is resolved with finality, respondents could not be
faulted for negotiating with said group.

Petitioner further alleges that respondents are guilty of ULP when on January 27, 1997,
"Justino Cardenas, Detachment Commander of the security agency contracted by the
UST to provide security services to the university, led a group of persons, including Dr. Gil
Gamilla, who padlocked the door leading to the USTFU."23 Petitioner claims that "Gamilla
who was and is still being favored by the employer, had no right whatsoever to padlock
the union office. And, yet the Administrators of the University of Santo Tomas aided him in
performing an unlawful act." Petitioner adds that an armed security guard was posted at
the USTFU office in order to prevent the Mariño Group from performing its duties.24 To
support such contention, petitioner provides as evidence a Certification dated January 27,
199725 of Sibug, a messenger of the USTFU, and a photograph26 of a security guard
standing before the USTFU office.

These pieces of evidence fail to support petitioner’s conclusions.

As to the padlocking of the USTFU office, it must be emphasized that based on the
Certification of Sibug, Cardenas was merely present, with Brgy. Captain Aseron of Brgy.
470, Zone 46, at the padlocking of the USTFU office. The Certification also stated that
Sibug himself also padlocked the USTFU office and that he was neither harassed nor
coerced by the padlocking group. Clearly, Cardenas’ mere presence cannot be equated to
a positive act of "aiding" the Gamilla Group in securing the USTFU office.

With regard to the photograph, while it evidences that there was indeed a guard posted at
the USTFU office, such cannot be used to claim that the guard prevented the Mariño
Group from performing its duties.

Petitioner again failed to present evidence to support its contention that UST committed
acts amounting to ULP.
In any event, it bears stressing that at the time of these events, the legitimacy of the
Gamilla Group as the valid officers and directors of the USTFU was already submitted to
the med-arbiter and no decision had yet been reached on the matter. Having been shown
evidence to support the legitimacy of the Gamilla Group with no counter-evidence from
the Mariño Group, UST had to recognize the Gamilla Group and negotiate with it. Thus,
the acts of UST in support of the USTFU as the legitimate representative of the bargaining
unit, albeit through the Gamilla Group, cannot be considered as ULP.

Finally, petitioner claims that "despite the ruling of this Honorable Court, the University of
Santo Tomas still entertains the interlopers whose claim to the leadership of the USTFU
has been rejected by the [DOLE] and the Highest Tribunal."27 Petitioner, however, fails to
enumerate such objectionable actions of the UST. Again, petitioner fails to present
substantial evidence in support of its claim.
1avvphi1

In sum, petitioner makes several allegations that UST committed ULP. The onus probandi
falls on the shoulders of petitioner to establish or substantiate such claims by the requisite
quantum of evidence. In labor cases as in other administrative proceedings, substantial
evidence or such relevant evidence as a reasonable mind might accept as sufficient to
support a conclusion is required. In the petition at bar, petitioner miserably failed to
adduce substantial evidence as basis for the grant of relief.

WHEREFORE, the petition is hereby DENIED. The June 14, 2007 Decision and November
26, 2007 Resolution of the CA in CA-G.R. SP No. 92236 are hereby AFFIRMED.
G.R. No. 127374 January 31, 2002

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO

DAKILA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON
TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU)
SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.

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

G.R. No. 127431 January 31, 2002

PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO

CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, DANILO CARBONEL,
MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH
MARISOL, NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES, MANUEL
CADIENTE and HERMINIA RIOSA, petitioners,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now
UNIFIED PAFLU) and NATIONAL LABOR RELATIONS COMMISSION, SECOND
DIVISION, respondents.

BELLOSILLO, J.:

This is a petition for certiorari seeking to set aside the 31 July 1996 Decision of the
1 2

National Labor Relations Commission affirming the 30 June 1995 Decision of the Labor
Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C. Romulo and Francisco
3

Dakila as well as the elected officers of the Philippine Skylanders Employees and Workers
Association-PAFLU guilty of unfair labor practice and ordering them to pay private
4

respondent Philippine Association of Free Labor Union (PAFLU) September ₱150,000.00

5

as damages. Petitioners likewise seek the reversal of the 31 October 1996 Resolution of
the NLRC denying their Motion for Reconsideration.

In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor
union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September
(PAFLU), won in the certification election conducted among the rank and file employees of
Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees
Association-WATU (PSEA-WATU) immediately protested the result of the election before
the Secretary of Labor.

Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice
of disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of
duty toward its members. Attached to the notice was a copy of the resolution adopted and
signed by the officers and members of PSEA authorizing their local union to disaffiliate
from its mother federation.

PSEA subsequently affiliated itself with the National Congress of Workers (NCW),
changed its name to Philippine Skylanders Employees Association - National Congress of
Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the
former officers of PSEA-PAFLU to continue occupying their positions as elected officers in
the newly-forged PSEA-NCW.

On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI
which was immediately registered with the Department of Labor and Employment.

Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General

Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited financial
statement. Ayroso explained that with the dismissal of PSEA-WATU's election protest the
time was ripe for the parties to enter into a collective bargaining agreement.

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request
citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW.

Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a

complaint for unfair labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU alleged that aside from PSI's refusal to
bargain collectively with its workers, the company through its president and personnel
manager, was also liable for interfering with its employees' union activities.
6

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU
for unfair labor practice against Francisco Dakila. Through Ayroso PAFLU claimed that
Dakila was present in PSEA's organizational meeting thereby confirming his illicit
participation in union activities. Ayroso added that the members of the local union had
unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing
a collective bargaining agreement which was detrimental to their interests. The two (2)
7

complaints were thereafter consolidated.

On 1 February 1995 PAFLU amended its complaint by including the elected officers of
PSEA-PAFLU as additional party respondents. PAFLU averred that the local officers of
PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo
Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol,
Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa,
were equally guilty of unfair labor practice since they brazenly allowed themselves to be
manipulated and influenced by petitioner Francisco Dakila. 8

PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the
dismissal of the complaint on the ground that the issue of disaffiliation was an inter-union
conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other hand,
PSEA-NCW took the cudgels for its officers who were being sued in their capacities as
former officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated
with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant
complaint. In support of this assertion, PSEA-NCW submitted in evidence
a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing
Ayroso or PAFLU from instituting any action in their behalf. 9

In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation
from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of
unfair labor practice. The Decision explained that despite PSEA-PAFLU's status as the
sole and exclusive bargaining agent of PSI's rank and file employees, the company
knowingly sanctioned and confederated with Dakila in actively assisting a rival union. This,
according to the Labor Arbiter, was a classic case of interference for which PSI could be
held responsible. As PSEA-NCW's personality was not accorded recognition, its collective
bargaining agreement with PSI was struck down for being invalid. Ayroso's legal
personality to file the complaint was sustained on the ratiocination that under the Labor
Code no petition questioning the majority status of the incumbent bargaining agent shall
be entertained outside of the sixty (60)-day period immediately before the expiry date of
such five (5)-year term of the collective bargaining agreement that the parties may enter
into. Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their officers to
pay PAFLU ₱150,000.00 in damages. 10

PSI, PSEA and their respective officers appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and
conjectured that since an election protest questioning PSEA-PAFLU's certification as the
sole and exclusive bargaining agent was pending resolution before the Secretary of Labor,
PSEA could not validly separate from PAFLU, join another national federation and
subsequently enter into a collective bargaining agreement with its employer-company. 11

Petitioners separately moved for reconsideration but both motions were denied. Hence,
these petitions for certiorari filed by PSI and PSEA-NCW together with their respective
officers pleading for a reversal of the NLRC's Decision which they claimed to have been
rendered in excess of jurisdiction. In due time, both petitions were consolidated.

In these petitions, petitioner PSEA together with its officers argued that by virtue of their
disaffiliation PAFLU as a mere agent had no authority to represent them before any
proceedings. They further asserted that being an independent labor union PSEA may
freely serve the interest of all its members and readily disaffiliate from its mother
federation when circumstances so warrant. This right, they averred, was consistent with
the constitutional guarantee of freedom of association. 12

For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain
collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's behavior.
Having heard no objections or protestations from PAFLU relative to PSEA's disaffiliation,
they reckoned that PSEA's subsequent association with NSW was done bona fide. 13
The Solicitor General filed a Manifestation in Lieu of Comment recommending that both
petitions be granted. In his Manifestation, the Solicitor General argued against the Labor
Arbiter's assumption of jurisdiction citing the following as reasons: first, there was no
employer-employee relationship between complainant Ayroso and PSI over which the
Labor Arbiter could rightfully assert his jurisdiction; second, since the case involved a
dispute between PAFLU as mother federation and PSEA as local union, the controversy
fell within the jurisdiction of the Bureau of Labor Relations; and lastly, the relationship of
principal-agent between PAFLU and PSEA had been severed by the local union through
the lawful exercise of its right of disaffiliation.
14

Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's
disaffiliation. To be more precise, may PSEA, which is an independent and separate local
union, validly disaffiliate from PAFLU pending the settlement of an election protest
questioning its status as the sole and exclusive bargaining agent of PSI's rank and file
employees?

At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the
jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with
the Labor Arbiter. Nonetheless, with due recognition of this fact, we deem it proper to
15

settle the controversy at this instance since to remand the case to the BLR would only
mean intolerable delay for the parties.

The right of a local union to disaffiliate from its mother federation is not a novel thesis
unillumined by case law. In the landmark case of Liberty Cotton Mills Workers Union vs.
Liberty Cotton Mills, Inc. we upheld the right of local unions to separate from their mother
16

federation on the ground that as separate and voluntary associations, local unions do not
owe their creation and existence to the national federation to which they are affiliated but,
instead, to the will of their members. The sole essence of affiliation is to increase, by
collective action, the common bargaining power of local unions for the effective
enhancement and protection of their interests. Admittedly, there are times when without
succor and support local unions may find it hard, unaided by other support groups, to
secure justice for themselves.

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

Such dictum has been punctiliously followed since then. 17

Upon an application of the aforecited principle to the issue at hand, the impropriety of the
questioned Decisions becomes clearly apparent. There is nothing shown in the records
nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from
the federation nor were there any conditions imposed for a valid breakaway. As such, the
pendency of an election protest involving both the mother federation and the local union
did not constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111
signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total
union membership supported the claim of disaffiliation and had in fact disauthorized
PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one
(1) or two (2) members of the local union decided to disaffiliate from the mother federation,
but it is a case where almost all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement with
PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no
restrictions which could validly hinder it from subsequently affiliating with NCW and
entering into a collective bargaining agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It
stands unchallenged that PAFLU instituted the complaint for unfair labor practice against
the wishes of workers whose interests it was supposedly protecting. The mere act of
disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the
license to act independently of the local union. Recreant to its mission, PAFLU cannot
simply ignore the demands of the local chapter and decide for its welfare. PAFLU might
have forgotten that as an agent it could only act in representation of and in accordance
with the interests of the local union. The complaint then for unfair labor practice lodged by
PAFLU against PSI, PSEA and their respective officers, having been filed by a party
which has no legal personality to institute the complaint, should have been dismissed at
the first instance for failure to state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as against those
of a national federation, those of the former must be preferred. Parenthetically though, the
desires of the mother federation to protect its locals are not altogether to be shunned. It
will however be to err greatly against the Constitution if the desires of the federation would
be favored over those of its members. That, at any rate, is the policy of the law. For if it
were otherwise, instead of protection, there would be disregard and neglect of the lowly
workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders

and Workers Association-NCW, together with their respective officers, are GRANTED.
The Decision of the National Labor Relations Commission of 31 July 1996 affirming the
Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders
and Workers Association-NCW, Philippine Skylanders, Inc. and their respective officers,
guilty of unfair labor practice and ordering them to pay damages to private respondent
Philippine Association of Free Labor Unions (PAFLU) September (now UNIFIED PAFLU)
as well as the Resolution of 31 October 1996 denying reconsideration
is REVERSED and SET ASIDE. No costs.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-43495-99 January 20, 1990

TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS TRIBINO,

FELIPE DURAN, MANUEL MANGYAO, MAMERTO CAHUCOM, NEMESIO BARRO,
TEODULFO CAPAGNGAN, VICTORINO ABORRO, VIDAL MANTOS, DALMACIO
DALDE, LUCIO PIASAN, CANUTO LABADAN, TERESO ROMERDE, CONRADO
ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN, BONIFACIO CAGATIN,
BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO
BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION,
FULGENCIO BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO,
GODOFREDO CAMINOS, GILDARDO DUMAS, JORGE SALDIVAR, GENARO
MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, ROGELIO
CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA,
CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU, FABIAN CAHUCOM,
EMILIANO VILLAMOR, RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL
CHUA, ARMANDO ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA, DANILO
CASTRO, CENON VALLENAS, DANILO CAWALING, SIMPLICIO GALLEROS,
PERFECTO CUIZON, PROCESO LAUROS, ANICETO BAYLON, EDISON ANDRES,
REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO
ORENCIO, ARMANDO LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL
ROSARIO, EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN,
JACINTO BANAL AND BONIFACIO PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG,
MARCELINO LONTOK JR., NATIONAL ASSOCIATION OF TRADE UNIONS (NATU),
NATIONAL LABOR RELATIONS COMMISSION (NLRC), HON. DIEGO P. ATIENZA,
GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON. BLAS F.
OPLE, respondents.

Pacifico C. Rosal for petitioners.

Marcelino Lontok, Jr. for private respondents.

Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.

MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the
public respondents Secretary of Labor and National Labor Relations Commission which
reversed the Arbitrators rulings in favor of petitioners herein.

The following factual background of this case appears from the record:

On January 2, 1968, the rank and file workers of the Tropical Hut Food Market
Incorporated, referred to herein as respondent company, organized a local union called
the Tropical Hut Employees Union, known for short as the THEU, elected their officers,
adopted their constitution and by-laws and immediately sought affiliation with the National
Association of Trade Unions (NATU). On January 3, 1968, the NATU accepted the THEU
application for affiliation. Following such affiliation with NATU, Registration Certificate No.
5544-IP was issued by the Department of Labor in the name of the Tropical Hut
Employees Union — NATU. It appears, however, that NATU itself as a labor federation,
was not registered with the Department of Labor.

After several negotiations were conducted between THEU-NATU, represented by its local
president and the national officers of the NATU, particularly Ignacio Lacsina, President,
Pacifico Rosal, Executive Vice-President and Marcelino Lontok, Jr., Vice President, and
respondent Tropical Hut Food Market, Incorporated, thru its President and General
Manager, Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded between
the parties on April 1, 1968, the term of which expired on March 31, 1971. Said agreement'
contained these clear and unequivocal terms:

This Agreement made and entered into this __________ day of ___________, 1968, by
and between:

The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and
by virtue of the laws of the Republic of the Philippines, with principal office at Quezon City,
represented in this Act by its President, Cesar B. Azcona (hereinafter referred to as the
Company)

—and—

The Tropical Hut Employees Union — NATU, a legitimate labor organization duly
organized and existing in accordance with the laws of the Republic of the Philippines, and
affiliated with the National Association of Trade Unions, with offices at San Luis Terraces,
Ermita, Manila, and represented in this Act by its undersigned officers (hereinafter
referred to as the UNION)

Witnesseth:

xxx xxx xxx

Article I
 Coverage and Effectivity

Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages, hours
of work, and other terms and conditions of employment.

xxx xxx xxx

Article III

Union Membership and Union Check-off

Sec. 1 —. . . Employees who are already members of the UNION at the time of the signing
of this Agreement or who become so thereafter shall be required to maintain their
membership therein as a condition of continued employment.

xxx xxx xxx

Sec. 3—Any employee who is expelled from the UNION for joining another federation or
forming another union, or who fails or refuses to maintain his membership therein as
required, . . . shall, upon written request of the UNION be discharged by the COMPANY.
(Rollo, pp. 667-670)

And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the
terms of which are as follows:

We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of
which the TROPICAL HUT EMPLOYEES UNION is an affiliate as sole collective
bargaining agent in all matters relating to salary rates, hours of work and other terms and
conditions of employment in the Tropical Hut Food Market, Inc. and we hereby authorize
the said company to deduct the amount of Four (P 4.00) Pesos each every month as our
monthly dues and to deliver the amount to the Treasurer of the Union or his duly
authorized representatives. (Rollo, pp. 680-684)

On May 21, 1971, respondent company and THEU-NATU entered into a new Collective
Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the
previous union-shop security clause and the attached check-off authorization form.

Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed
by the respondent company as Assistant Unit Manager. On July 24, 1973, he wrote the
general membership of his union that for reason of his present position, he was resigning
as President of the THEU-NATU effective that date. As a consequence thereof, his
Vice-President, Jose Encinas, assumed and discharged the duties of the presidency of
the THEU-NATU.
On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by
the incumbent officers of the local union informing the NATU that THEU was disaffiliating
from the NATU federation. On December 20, 1973, the Secretary of the THEU, Nemesio
Barro, made an announcement in an open letter to the general membership of the THEU,
concerning the latter's disaffiliation from the NATU and its affiliation with the
Confederation of General Workers (CGW). The letter was passed around among the
members of the THEU-NATU, to which around one hundred and thirty-seven (137)
signatures appeared as having given their consent to and acknowledgment of the
decision to disaffiliate the THEU from the NATU.

On January 1, 1974, the general membership of the so-called THEU-CGW held its annual
election of officers, with Jose Encinas elected as President. On January 3, 1974, Encinas,
in his capacity as THEU-CGW President, informed the respondent company of the result
of the elections. On January 9, 1974, Pacifico Rosal, President of the Confederation of
General Workers (CGW), wrote a letter in behalf of complainant THEU-CGW to the
respondent company demanding the remittance of the union dues collected by the
Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the
respondent company.

On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal
Mantos, requiring the latter to assume immediately the position of President of the
THEU-NATU in place of Jose Encinas, but the position was declined by Mantos. On the
same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the
NATU federation to the respondent company to dismiss him (Encinas) in view of his
violation of Section 3 of Article III of the Collective Bargaining Agreement. Encinas was
also advised in the letter that NATU was returning the letter of disaffiliation on the ground
that:

1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine
National Trade Union Center in conjunction with the NATU and other established national
labor centers, retail clerks and employees such as our members in the Tropical Hut
pertain to Industry II which by consensus, has been assigned already to the jurisdiction of
the NATU;

2. The right to disaffiliate belongs to the union membership who — on the basis of verified
reports received by — have not even been consulted by you regarding the matter;

3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless
is unacceptable in view of Article V, Section 1, of the NATU Constitution which provides
that "withdrawal from the organization shall he valid provided three (3) months notice of
intention to withdraw is served upon the National Executive Council." (p. 281, Rollo)

In view of NATU's request, the respondent company, on the same day, which was
January 11, 1974, suspended Encinas pending the application for clearance with the
Department of Labor to dismiss him. On January 12, 1974, members of the THEU-CGW
passed a resolution protesting the suspension of Encinas and reiterated their ratification
and approval of their union's disaffiliation from NATU and their affiliation with the
Confederation of General Workers (CGW). It was Encinas' suspension that caused the
filing of NLRC Case No. LR-2511 on January 11, 1974 against private respondents herein,
charging them of unfair labor practice.

On January 15,1974, upon the request of NATU, respondent company applied for
clearance with the Secretary of Labor to dismiss the other officers and members of
THEU-CGW. The company also suspended them effective that day. NLRC Case No.
LR-2521 was filed by THEU-CGW and individual complainants against private
respondents for unfair labor practices.

On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of
officers of the remaining THEU-NATU in an emergency meeting pending the holding of a
special election to be called at a later date. In the alleged election, Arturo Dilag was
elected acting THEU-NATU President together with the other union officers. On February
14, 1974, these temporary officers were considered as having been elected as regular
officers for the year 1974.

On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary
of National Defense, complaining of the unfair labor practices committed by respondent
company against its members and requesting assistance on the matter. The
aforementioned letter contained the signatures of one hundred forty-three (143) members.

On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file
employees of the company that they will be given forty-eight (48) hours upon receipt of the
notice within which to answer and affirm their membership with THEU-NATU. When the
petitioner employees failed to reply, Arturo Dilag advised them thru letters dated February
26, March 2 and 5, 1974, that the THEU-NATU shall enforce the union security clause set
forth in the CBA, and that he had requested respondent company to dismiss them.

Respondent company, thereafter, wrote the petitioner employees demanding the latter's
comment on Dilag's charges before action was taken thereon. However, no comment or
reply was received from petitioners. In view of this, Estelita Que, President/General
Manager of respondent company, upon Dilag's request, suspended twenty four (24)
workers on March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2) more on
March 11, 1974, pending approval by the Secretary of Labor of the application for their
dismissal.

As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case
were filed by petitioners against Tropical Hut Food Market, Incorporated, Estelita Que,
Hernando Sarmiento and Arturo Dilag.

It is significant to note that the joint letter petition signed by sixty-seven (67) employees
was filed with the Secretary of Labor, the NLRC Chairman and Director of Labor Relations
to cancel the words NATU after the name of Tropical Hut Employee Union under
Registration Certificate No. 5544 IP. Another letter signed by one hundred forty-six (146)
members of THEU-CGW was sent to the President of the Philippines informing him of the
unfair labor practices committed by private respondents against THEU-CGW members.

After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor
Arbiter, Arbitrator Daniel Lucas issued an order dated March 21, 1974, holding that the
issues raised by the parties became moot and academic with the issuance of NLRC Order
dated February 25, 1974 in NLRC Case No. LR-2670, which directed the holding of a
certification election among the rank and file workers of the respondent company between
the THEU-NATU and THEU-CGW. He also ordered: a) the reinstatement of all
complainants; b) for the respondent company to cease and desist from committing further
acts of dismissals without previous order from the NLRC and for the complainant Tropical
Hut Employees UNION-CGW to file representation cases on a case to case basis during
the freedom period provided for by the existing CBA between the parties (pp.
91-93, Rollo).

With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator
Cleto T. Villatuya rendered a decision dated October 14, 1974, the dispositive portion of
which states:

Premises considered, a DECISION is hereby rendered ordering respondent company to

reinstate immediately the sixty three (63) complainants to their former positions with back
wages from the time they were illegally suspended up to their actual reinstatement without
loss of seniority and other employment rights and privileges, and ordering the
respondents to desist from further committing acts of unfair labor practice. The
respondent company's application for clearance filed with the Secretary of Labor to
terminate the subject complainants' services effective March 20 and 23, 1974, should be
denied.

SO ORDERED. (pp. 147-148, Rollo)

From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511
and LR-2521 and by Arbitrator Cleto Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and
the unnumbered case, all parties thereto, namely, petitioners herein, respondent company,
NATU and Dilag appealed to the National Labor Relations Commission.

In a decision rendered on August 1, 1975, the National Labor Relations Commission found
the private respondents' appeals meritorious, and stated, inter alia:

WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC
CASE NOS. LR-2511, 2521 and the decision of Arbitrator Villatuya in NLRC CASE NOS.
LR-2971, 3015 and the unnumbered Case are hereby REVERSED. Accordingly, the
individual complainants are deemed to have lost their status as employees of the
respondent company. However, considering that the individual complainants are not
presumed to be familiar with nor to have anticipated the legal mesh they would find
themselves in, after their "disaffiliation" from National Association of Trade Unions and the
THEU-NATU, much less the legal consequences of the said action which we presume
they have taken in all good faith; considering, further, that the thrust of the new orientation
in labor relations is not towards the punishment of acts violative of contractual relations
but rather towards fair adjustments of the resulting complications; and considering, finally,
the consequent economic hardships that would be visited on the individual complainants,
if the law were to be strictly enforced against them, this Commission is constrained to be
magnanimous in this instant, notwithstanding its obligation to give full force and effect to
the majesty of the law, and hereby orders the respondent company, under pain of being
cited for contempt for failure to do so, to give the individual complainants a second chance
by reemploying them upon their voluntary reaffirmation of membership and loyalty to the
Tropical Hut Employees Union-NATU and the National Association of Trade Unions in the
event it hires additional personnel.

SO ORDERED. (pp. 312-313, Rollo)

The petitioner employees appealed the decision of the respondent National Labor
Relations Commission to the Secretary of Labor. On February 23, 1976, the Secretary of
Labor rendered a decision affirming the findings of the Commission, which provided inter
alia:

We find, after a careful review of the record, no sufficient justification to alter the decision
appealed from except that portion of the dispositive part which states:

. . . this Commission . . . hereby orders respondent company under pain of being cited for
contempt for failure to do so, to give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of membership and loyalty to the
Tropical Hut Employees UNION-NATU and the National Association of Trade Union in the
event it hires additional personnel.

Compliance by respondent of the above undertaking is not immediately feasible

considering that the same is based on an uncertain event, i.e., reemployment of individual
complainants "in the event that management hires additional personnel," after they shall
have reaffirmed their loyalty to THEU-NATU, which is unlikely.

In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9,
Implementing Instruction No. 1. dated November 9, 1972, respondent is hereby ordered to
grant to all the individual complainants financial assistance equivalent to one (1) month
salary for every year of service.

WHEREFORE, with the modification as above indicated, the Decision of the National
Labor Relations Commission is hereby affirmed.

SO ORDERED.(pp. 317-318, Rollo)

From the various pleadings filed and arguments adduced by petitioners and respondents,
the following issues appear to be those presented for resolution in this petition to wit: 1)
whether or not the petitioners failed to exhaust administrative remedies when they
immediately elevated the case to this Court without an appeal having been made to the
Office of the President; 2) whether or not the disaffiliation of the local union from the
national federation was valid; and 3) whether or not the dismissal of petitioner employees
resulting from their unions disaffiliation for the mother federation was illegal and
constituted unfair labor practice on the part of respondent company and federation.

We find the petition highly meritorious.

The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21,
1975, which states:

Art. 222. Appeal — . . .

xxx xxx xxx

Decisions of the Secretary of Labor may be appealed to the President of the Philippines
subject to such conditions or limitations as the President may direct. (Emphasis ours)

The remedy of appeal from the Secretary of Labor to the Office of the President is not a
mandatory requirement before resort to courts can be had, but an optional relief provided
by law to parties seeking expeditious disposition of their labor disputes. Failure to avail of
such relief shall not in any way served as an impediment to judicial intervention. And
where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of
the Secretary of Labor may be questioned in a certiorari proceeding without prior appeal
to the President (Arrastre Security Association —TUPAS v. Ople, No. L-45344, February
20, 1984, 127 SCRA 580). Since the instant petition raises the same issue of grave abuse
of discretion of the Secretary of Labor amounting to lack of or in excess of jurisdiction in
deciding the controversy, this Court can properly take cognizance of and resolve the
issues raised herein.

This brings Us to the question of the legality of the dismissal meted to petitioner
employees. In the celebrated case of Liberty Cotton Mills Workers Union v. Liberty Cotton
Mills, L-33187, September 4, 1975, 66 SCRA 512, We held that the validity of the dismissals
pursuant to the union security clause in the collective bargaining agreement hinges on the
validity of the disaffiliation of the local union from the federation.

The right of a local union to disaffiliate from its mother federation is well-settled. A local
union, being a separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances warrant. This right is
consistent with the constitutional guarantee of freedom of association (Volkschel Labor
Union v. Bureau of Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42).
All employees enjoy the right to self organization and to form and join labor organizations
of their own choosing for the purpose of collective bargaining and to engage in concerted
activities for their mutual aid or protection. This is a fundamental right of labor that derives
its existence from the Constitution. In interpreting the protection to labor and social justice
provisions of the Constitution and the labor laws or rules or regulations, We have always
adopted the liberal approach which favors the exercise of labor rights.

Relevant on this point is the basic principle We have repeatedly in affirmed in many
rulings:

. . . The locals are separate and distinct units primarily designed to secure and maintain
an equality of bargaining power between the employer and their employee-members in
the economic struggle for the fruits of the joint productive effort of labor and capital; and
the association of the locals into the national union (PAFLU) was in furtherance of the
same end. These associations are consensual entities capable of entering into such legal
relations with their member. The essential purpose was the affiliation of the local unions
into a common enterprise to increase by collective action the common bargaining power in
respect of the terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free also to
renounce the affiliation for mutual welfare upon the terms laid down in the agreement
which brought it into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120, January
31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955,
December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty Cotton
Mills, Inc., supra).

The inclusion of the word NATU after the name of the local union THEU in the registration
with the Department of Labor is merely to stress that the THEU is NATU's affiliate at the
time of the registration. It does not mean that the said local union cannot stand on its own.
Neither can it be interpreted to mean that it cannot pursue its own interests independently
of the federation. A local union owes its creation and continued existence to the will of its
members and not to the federation to which it belongs.

When the local union withdrew from the old federation to join a new federation, it was
merely exercising its primary right to labor organization for the effective enhancement and
protection of common interests. In the absence of enforceable provisions in the
federation's constitution preventing disaffiliation of a local union a local may sever its
relationship with its parent (People's Industrial and Commercial Employees and Workers
Organization (FFW) v. People's Industrial and Commercial Corporation, No. 37687, March
15, 1982, 112 SCRA 440).

There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU
that the THEU was expressly forbidden to disaffiliate from the federation (pp. 62,
281, Rollo), The alleged non-compliance of the local union with the provision in the NATU
Constitution requiring the service of three months notice of intention to withdraw did not
produce the effect of nullifying the disaffiliation for the following grounds: firstly, NATU was
not even a legitimate labor organization, it appearing that it was not registered at that time
with the Department of Labor, and therefore did not possess and acquire, in the first place,
the legal personality to enforce its constitution and laws, much less the right and privilege
under the Labor Code to organize and affiliate chapters or locals within its group, and
secondly, the act of non-compliance with the procedure on withdrawal is premised on
purely technical grounds which cannot rise above the fundamental right of
self-organization.

Respondent Secretary of Labor, in affirming the decision of the respondent Commission,

concluded that the supposed decision to disaffiliate was not the subject of a free and open
discussion and decision on the part of the THEU-NATU general membership (p.
305, Rollo). This, however, is contradicted by the evidence on record. Moreover, We are
inclined to believe Arbitrator Villatuya's findings to the contrary, as follows:

. . . . However, the complainants refute this allegation by submitting the following: a) Letter
dated December 20, 1.973 signed by 142 members (Exhs. "B to B-5") resolution dated
January 12, 1974, signed by 140 members (Exhs. "H to H-6") letter dated February 26, 1974
to the Department of Labor signed by 165 members (Exhs. "I to I-10"); d) letter dated
January 30, 1974 to the Secretary of the National Defense signed by 144 members (Exhs.
"0 to 0-5") and; e) letter dated March 6, 1974 signed by 146 members addressed to the
President of the Philippines (Exhs. "HH to HH-5"), to show that in several instances, the
members of the THEU-NATU have acknowledged their disaffiliation from NATU. The
letters of the complainants also indicate that an overwhelming majority have freely and
voluntarily signed their union's disaffiliation from NATU, otherwise, if there was really
deception employed in securing their signatures as claimed by NATU/ Dilag, it could not
be possible to get their signatures in five different documents. (p. 144, Rollo)

We are aware of the time-honored doctrine that the findings of the NLRC and the
Secretary of Labor are binding on this Court if supported by substantial evidence.
However, in the same way that the findings of facts unsupported by substantial and
credible evidence do not bind this Court, neither will We uphold erroneous conclusions of
the NLRC and the Secretary of Labor when We find that the latter committed grave abuse
of discretion in reversing the decision of the labor arbiter (San Miguel Corporation v.
NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual findings of
the arbitrator were correct against that of public respondents.

Further, there is no merit in the contention of the respondents that the act of disaffiliation
violated the union security clause of the CBA and that their dismissal as a consequence
thereof is valid. A perusal of the collective bargaining agreements shows that the
THEU-NATU, and not the NATU federation, was recognized as the sole and exclusive
collective bargaining agent for all its workers and employees in all matters concerning
wages, hours of work and other terms and conditions of employment (pp. 667-706, Rollo).
Although NATU was designated as the sole bargaining agent in the check-off
authorization form attached to the CBA, this simply means it was acting only for and in
behalf of its affiliate. The NATU possessed the status of an agent while the local union
remained the basic principal union which entered into contract with the respondent
company. When the THEU disaffiliated from its mother federation, the former did not lose
its legal personality as the bargaining union under the CBA. Moreover, the union security
clause embodied in the agreements cannot be used to justify the dismissals meted to
petitioners since it is not applicable to the circumstances obtaining in this case. The CBA
imposes dismissal only in case an employee is expelled from the union for joining another
federation or for forming another union or who fails or refuses to maintain membership
therein. The case at bar does not involve the withdrawal of merely some employees from
the union but of the whole THEU itself from its federation. Clearly, since there is no
violation of the union security provision in the CBA, there was no sufficient ground to
terminate the employment of petitioners.

Public respondents considered the existence of Arturo Dilag's group as the remaining true
and valid union. We, however, are inclined to agree instead with the Arbitrator's findings
when he declared:

. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the
original THEU-NATU has a very doubtful and questionable existence not to mention that
the alleged president is performing supervisory functions and not qualified to be a bona
fide member of the rank and file union. (p. 146, Rollo)

Records show that Arturo Dilag had resigned in the past as President of THEU-NATU
because of his promotion to a managerial or supervisory position as Assistant Unit
Manager of respondent Company. Petitioner Jose Encinas replaced Dilag as President
and continued to hold such position at the time of the disaffiliation of the union from the
federation. It is therefore improper and contrary to law for Dilag to reassume the
leadership of the remaining group which was alleged to be the true union since he
belonged to the managerial personnel who could not be expected to work for the
betterment of the rank and file employees. Besides, managers and supervisors are
prohibited from joining a rank and file union (Binalbagan Isabela Sugar Co., Inc. (BISCOM)
v. Philippine Association of Free Labor Unions (PAFLU), et al., L-18782, August 29, 1963, 8
SCRA 700). Correspondingly, if a manager or supervisor organizes or joins a rank and file
union, he will be required to resign therefrom (Magalit, et al. v. Court of Industrial
Relations, et al., L-20448, May 25, 1965,14 SCRA 72).

Public respondents further submit that several employees who disaffiliate their union from
the NATU subsequently retracted and reaffirmed their membership with the THEU-NATU.
In the decision which was affirmed by respondent Secretary of Labor, the respondent
Commission stated that:

. . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW
whose signatures appeared in the "Analysis of Various Documents Signed by Majority
Members of the THEU-CGW, (Annex "T", Complainants), which incidentally was relied
upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the
majority of employees in respondent company, ninety-three (93) of the alleged signatories
reaffirmed their membership with the THEU-NATU and renounced whatever connection
they may have had with other labor unions, (meaning the complainant THEU-CGW) either
through resolution or membership application forms they have unwittingly signed." (p.
306, Rollo)

Granting arguendo, that the fact of retraction is true, the evidence on record shows that
the letters of retraction were executed on various dates beginning January 11, 1974 to
March 8, 1974 (pp. 278-280, Rollo). This shows that the retractions were made more or
less after the suspension pending dismissal on January 11, 1974 of Jose Encinas, formerly
THEU-NATU President, who became THEU-CGW President, and the suspension
pending their dismissal of the other elected officers and members of the THEU-CGW on
January 15, 1974. It is also clear that some of the retractions occurred after the suspension
of the first set of workers numbering about twenty-four (24) on March 5, 1974. There is no
use in saying that the retractions obliterated the act of disaffiliation as there are doubts
that they were freely and voluntarily done especially during such time when their own
union officers and co-workers were already suspended pending their dismissal.

Finally, with regard to the process by which the workers were suspended or dismissed,
this Court finds that it was hastily and summarily done without the necessary due process.
The respondent company sent a letter to petitioners herein, advising them of
NATU/Dilag's recommendation of their dismissal and at the same time giving them
forty-eight (48) hours within which to comment (p. 637, Rollo). When petitioners failed to
do so, respondent company immediately suspended them and thereafter effected their
dismissal. This is certainly not in fulfillment of the mandate of due process, which is to
afford the employee to be dismissed an opportunity to be heard.

The prerogative of the employer to dismiss or lay-off an employee should be done without
abuse of discretion or arbitrainess, for what is at stake is not only the employee's name or
position but also his means of livelihood. Thus, the discharge of an employee from his
employment is null and void where the employee was not formally investigated and given
the opportunity to refute the alleged findings made by the company (De Leon v. NLRC,
L-52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be adjudged guilty
of unfair labor practice for having dismissed its employees in line with a closed shop
provision if they were not given a proper hearing (Binalbagan-Isabela Sugar Co.,
Inc.,(BISCOM) v. Philippine Association of Free Labor Unions (PAFLU) et al., L-18782,
August 29, 1963, 8 SCRA 700).

In view of the fact that the dispute revolved around the mother federation and its local,
with the company suspending and dismissing the workers at the instance of the mother
federation then, the company's liability should be limited to the immediate reinstatement of
the workers. And since their dismissals were effected without previous hearing and at the
instance of NATU, this federation should be held liable to the petitioners for the payment
of their backwages, as what We have ruled in the Liberty Cotton Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of
respondent Secretary of Labor is REVERSED and SET ASIDE, and the respondent
company is hereby ordered to immediately reinstate all the petitioner employees within
thirty (30) days from notice of this decision. If reinstatement is no longer feasible, the
respondent company is ordered to pay petitioners separation pay equivalent to one (1)
month pay for every year of service. The respondent NATU federation is directed to pay
petitioners the amount of three (3) years backwages without deduction or qualification.
This decision shall be immediately executory upon promulgation and notice to the parties.

SO ORDERED.
G.R. No. 150896 August 28, 2008

PUREFOODS CORPORATION, petitioner,

vs.
NAGKAKAISANG SAMAHANG MANGGAGAWA NG PUREFOODS RANK-AND-FILE, ST.
THOMAS FREE WORKERS UNION, PUREFOODS GRANDPARENT FARM WORKERS UNION
and PUREFOODS UNIFIED LABOR ORGANIZATION,respondents.

DECISION

NACHURA, J.:

The petitioner, Purefoods Corporation, in this Rule 45 petition seeks the reversal of the appellate
court’s dismissal of its certiorari petition, and our consequent review of the labor commission’s
finding that it committed unfair labor practice and illegally dismissed the concerned union
members.

Three labor organizations and a federation are respondents in this case—Nagkakaisang

Samahang Manggagawa Ng Purefoods Rank-And-File (NAGSAMA-Purefoods), the exclusive
bargaining agent of the rank-and-file workers of Purefoods’ meat division throughout Luzon; St.
Thomas Free Workers Union (STFWU), of those in the farm in Sto. Tomas, Batangas; and
Purefoods Grandparent Farm Workers Union (PGFWU), of those in the poultry farm in Sta. Rosa,
Laguna. These organizations were affiliates of the respondent federation, Purefoods Unified Labor
Organization (PULO).1

On February 8, 1995, NAGSAMA-Purefoods manifested to petitioner corporation its desire to

re-negotiate the collective bargaining agreement (CBA) then due to expire on the 28th of the said
month. Together with its demands and proposal, the organization submitted to the company its
January 28, 1995 General Membership Resolution approving and supporting the union’s affiliation
with PULO, adopting the draft CBA proposals of the federation, and authorizing a negotiating panel
which included among others a PULO representative. While Purefoods formally acknowledged
receipt of the union’s proposals, it refused to recognize PULO and its participation, even as a mere
observer, in the negotiation. Consequently, notwithstanding the PULO representative’s
non-involvement, the negotiation of the terms of the CBA still resulted in a deadlock. A notice of
strike was then filed by NAGSAMA-Purefoods on May 15, 1995. In the subsequent conciliation
conference, the deadlock issues were settled except the matter of the company’s recognition of the
union’s affiliation with PULO.2

In the meantime, STFWU and PGFWU also submitted their respective proposals for CBA renewal,
and their general membership resolutions which, among others, affirmed the two organizations’
affiliation with PULO. Consistent with its stance, Purefoods refused to negotiate with the unions
should a PULO representative be in the panel. The parties then agreed to postpone the
negotiations indefinitely.3
On July 24, 1995, however, the petitioner company concluded a new CBA with another union in its
farm in Malvar, Batangas. Five days thereafter, or on July 29, 1995, at around 8:00 in the evening,
four company employees facilitated the transfer of around 23,000 chickens from the poultry farm in
Sto. Tomas, Batangas (where STFWU was the exclusive bargaining agent) to that in Malvar. The
following day, the regular rank-and-file workers in the Sto. Tomas farm were refused entry in the
company premises; and on July 31, 1995, 22 STFWU members were terminated from employment.
The farm manager, supervisors and electrical workers of the Sto. Tomas farm, who were members
of another union, were nevertheless retained by the company in its employ.4

Aggrieved by these developments, the four respondent labor organizations jointly instituted a
complaint for unfair labor practice (ULP), illegal lockout/dismissal and damages, docketed as NLRC
Case No. NLRC-NCR-00-07-05159-95, with the Labor Arbitration Branch of the National Labor
Relations Commission (NLRC).5

In the proceedings before the Labor Arbiter (LA), Purefoods interposed, among others, the
defenses that PULO was not a legitimate labor organization or federation for it did not have the
required minimum number of member unions; that the closure of the Sto. Tomas farm was not
arbitrary but was the result of the financial non-viability of the operations therein, or the
consequence of the landowner’s pre-termination of the lease agreement; that the other
complainants had no cause of action considering that it was only the Sto. Tomas farm which was
closed; that the termination of the employees complied with the 30-day notice requirement and that
the said employees were paid 30-day advance salary in addition to separation pay; and that the
concerned union, STFWU, lost its status as bargaining representative when the Sto. Tomas farm
was closed.6

On August 17, 1999, the LA rendered a Decision7 dismissing the complaint, and declaring that the
company neither committed ULP nor illegally dismissed the employees.

On appeal, the NLRC reversed the ruling of the LA, ordered the payment of P500,000.00 as moral
and exemplary damages and the reinstatement with full backwages of the STFWU members. In its
March 16, 2001 Decision (CA No. 022059-00), the labor commission ruled that the petitioner
company’s refusal to recognize the labor organizations’ affiliation with PULO was unjustified
considering that the latter had been granted the status of a federation by the Bureau of Labor
Relations; and that this refusal constituted undue interference in, and restraint on the exercise of
the employees’ right to self-organization and free collective bargaining. The NLRC said that the real
motive of the company in the sudden closure of the Sto. Tomas farm and the mass dismissal of the
STFWU members was union busting, as only the union members were locked out, and the
company subsequently resumed operations of the closed farm under a new contract with the
landowner. Because the requisites of a valid lockout were absent, the NLRC concluded that the
company committed ULP. The dispositive portion of the NLRC decision reads:

WHEREFORE, respondent Purefoods Corporation is hereby directed to reinstate effective October

1, 2000 employees-members of the STFWU-PULO who were illegally locked out on July 30, 1995
and to pay them their full backwages.
SO ORDERED.

Its motion for reconsideration having been denied,8 the petitioner corporation filed a Rule 65 petition
before the Court of Appeals (CA) docketed as CA-G.R. SP No. 66871.

In the assailed October 25, 2001 Resolution,9 the appellate court dismissed outright the company’s
petition for certiorari on the ground that the verification and certification of non-forum shopping was
defective since no proof of authority to act for and on behalf of the corporation was submitted by the
corporation’s senior vice-president who signed the same; thus, the petition could not be deemed
filed for and on behalf of the real party-in-interest. Then, the CA, in its November 22, 2001
Resolution,10 denied petitioner’s motion for reconsideration of the dismissal order.

Dissatisfied, petitioner instituted before us the instant petition for review on certiorari under Rule 45.

The petition is denied.

Section 1, Rule 65 of the Rules of Court explicitly mandates that the petition for certiorari shall be
accompanied by a sworn certification of non-forum shopping.11 When the petitioner is a corporation,
inasmuch as corporate powers are exercised by the board, the certification shall be executed by a
natural person authorized by the corporation’s board of directors.12 Absent any authority from the
board, no person, not even the corporate officers, can bind the corporation.13 Only individuals who
are vested with authority by a valid board resolution may sign the certificate of non-forum shopping
in behalf of the corporation, and proof of such authority must be attached to the petition.14 Failure to
attach to the certification any proof of the signatory’s authority is a sufficient ground for the
dismissal of the petition.15

In the instant case, the senior vice-president of the petitioner corporation signed the certificate of
non-forum shopping. No proof of his authority to sign the said certificate was, however, attached to
the petition. Thus, applying settled jurisprudence, we find that the CA committed no error when it
dismissed the petition.

The Court cannot even be liberal in the application of the rules because liberality is warranted only
in instances when there is substantial compliance with the technical requirements in pleading and
practice, and when there is sufficient explanation that the non-compliance is for a justifiable cause,
such that the outright dismissal of the case will defeat the administration of justice.16 Here, the
petitioner corporation, in its motion for reconsideration before the appellate court and in its petition
before us, did not present a reasonable explanation for its non-compliance with the rules. Further, it
cannot be said that petitioner substantially complied therewith, because it did not attach to its
motion for reconsideration any proof of the authority of its signatory. It stands to reason, therefore,
that this Court now refuses to condone petitioner’s procedural transgression.

We must reiterate that the rules of procedure are mandatory, except only when, for the most
persuasive of reasons, they may be relaxed to relieve a litigant of an injustice not commensurate to
the degree of his thoughtlessness in not complying therewith.17 While technical rules of procedure
are not designed to frustrate the ends of justice, they are provided to effect the proper and orderly
disposition of cases and effectively prevent the clogging of court dockets.18

Be that as it may, this Court has examined the records if only to dispel any doubt on the propriety of
the dismissal of the case, and we found no abuse of discretion, much more a grave one, on the part
of the labor commission in reversing the ruling of the LA.

It is crystal clear that the closure of the Sto. Tomas farm was made in bad faith. Badges of bad faith
are evident from the following acts of the petitioner: it unjustifiably refused to recognize the
STFWU’s and the other unions’ affiliation with PULO; it concluded a new CBA with another union in
another farm during the agreed indefinite suspension of the collective bargaining negotiations; it
surreptitiously transferred and continued its business in a less hostile environment; and it suddenly
terminated the STFWU members, but retained and brought the non-members to the Malvar farm.
Petitioner presented no evidence to support the contention that it was incurring losses or that the
subject farm’s lease agreement was pre-terminated. Ineluctably, the closure of the Sto. Tomas farm
circumvented the labor organization’s right to collective bargaining and violated the members’ right
to security of tenure.19

The Court reiterates that the petition for certiorari under Rule 65 of the Rules of Court filed with the
CA will prosper only if there is clear showing of grave abuse of discretion or an act without or in
excess of jurisdiction on the part of the NLRC.20 It was incumbent, then, for petitioner to prove
before the appellate court that the labor commission capriciously and whimsically exercised its
judgment tantamount to lack of jurisdiction, or that it exercised its power in an arbitrary or despotic
manner by reason of passion or personal hostility, and that its abuse of discretion is so patent and
gross as to amount to an evasion of a positive duty enjoined or to act at all in contemplation of
law.21 Here, as aforesaid, no such proof was adduced by petitioner. We, thus, declare that the
NLRC ruling is not characterized by grave abuse of discretion. Accordingly, the same is also
affirmed.

However, this Court makes the following observations and modifications:

We deem as proper the award of moral and exemplary damages. We hold that the sudden
termination of the STFWU members is tainted with ULP because it was done to interfere with,
restrain or coerce employees in the exercise of their right to self-organization. Thus, the petitioner
company is liable for the payment of the aforesaid damages.22 Notable, though, is that this award,
while stated in the body of the NLRC decision, was omitted in the dispositive portion of the said
ruling. To prevent any further confusion in the implementation of the said decision, we correct the
dispositive portion of the ruling to include the payment of P500,000.00 as moral and exemplary
damages to the illegally dismissed STFWU members.

As to the order of reinstatement, the Court modifies the same in that if it is no longer feasible
considering the length of time that the employees have been out of petitioner’s employ,23 the
company is ordered to pay the illegally dismissed STFWU members separation pay equivalent to
one (1) month pay, or one-half (1/2) month pay for every year of service, whichever is higher.24
The releases and quitclaims, as well as the affidavits of desistance,25 signed by the concerned
employees, who were then necessitous men at the time of execution of the documents, are
declared invalid and ineffective. They will not bar the workers from claiming the full measure of
benefits flowing from their legal rights.26

WHEREFORE, premises considered, the petition for review on certiorari is DENIED. The October
25, 2001 and the November 22, 2001 Resolutions of the Court of Appeals in CA-G.R. SP No. 66871
are AFFIRMED. The March 16, 2001 Decision of the National Labor Relations Commission in
NLRC-NCR-00-07-05159-95 (CA No. 022059-00) is AFFIRMED with the MODIFICATION that
petitioner company is ordered to: (1) reinstate the illegally dismissed STFWU members and pay
them full backwages from the time of illegal termination up to actual reinstatement; (2) if
reinstatement is no longer feasible, pay the illegally dismissed STFWU members their separation
pay equivalent to one month pay, or one-half month pay for every year of service, whichever is
higher; and (3) pay moral and exemplary damages in the aggregate amount of P500,000.00 to the
said illegally dismissed STFWU members.

SO ORDERED.
G.R. No. 177283 April 7, 2009

DE LA SALLE UNIVERSITY and DR. CARMELITA I. QUEBENGCO, Petitioners,

vs.
DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION
(DLSUEA-NAFTEU), Respondent.

DECISION

CARPIO MORALES, J.:

On challenge by the De La Salle University and its Executive Vice President Dr. Carmelita
I. Quebengco (petitioners) via the present petition for review on certiorari is the Court of
Appeals First Division Decision of September 16, 20051 in CA-G.R. No. SP No.
81220 which SET ASIDE the National Labor Relations Commission
(NLRC) Second Division Orders of June 26, 2003 and September 30, 2003 affirming the
dismissal of the complaint for Unfair Labor Practices (ULP) filed by De La Salle University
Employees Association (respondent), and directed the NLRC Second Division to transmit
the records of the said complaint to the NLRC Third Division.

The antecedent facts of the case are as follows:

In 2001, a splinter group of respondent led by one Belen Aliazas (Aliazas group) filed a
petition for conduct of elections with the Department of Labor and Employment (DOLE),
alleging that the then incumbent officers of respondent had failed to call for a regular
election since 1985.

Disputing the Aliazas group’s allegation, respondent claimed that an election was
conducted in 1987 but by virtue of the enactment of Republic Act 6715,2 which amended
the Labor Code, the term of office of its officers was extended to five years or until 1992
during which a general assembly was held affirming their hold-over tenure until the
termination of collective bargaining negotiations; and that a collective bargaining
agreement (CBA) was executed only on March 30, 2000.

Acting on the petition for the conduct of election filed by the Aliazas group, the DOLE-NCR
held, by Decision of March 19, 2001, that the holdover authority of respondent’s incumbent
set of officers had been extinguished by virtue of the execution of the CBA. It accordingly
ordered the conduct of elections to be placed under the control and supervision of its
Labor Relations Division3 and subject to pre-election conferences.

The conditions for the conduct of election imposed by the DOLE-NCR notwithstanding,
respondent called for a regular election on July 9, 2001, without prior notice to the DOLE
and without the conduct of pre-election conference, prompting the Aliazas group to file an
Urgent Motion for Intervention with the Bureau of Labor Relations (BLR) of the DOLE. The
BLR granted the Aliaza’s group’s motion for intervention three days before the intended
date of election or on July 6, 2001 and thus disposed as follows:

WHEREFORE, without necessarily resolving the merits of the appeal and considering the
urgency of the issues raised by appellees and the limited time involved, the motion is
hereby GRANTED. Consequently, appellants and or the members of the
DLSUEA-COMELEC headed by Mr. Dominador Almodovar or any of their authorized
representatives are hereby directed to cease and desist from holding the general
election of DLSUEA officers on 9 July 2001, until further ordered by this Office.

SO ORDERED.4 (Emphasis and underscoring supplied)

The Aliazas group thereupon, via letter of August 7, 2001 to Brother Rolando Dizon, FSC,
President of petitioner DLSU, requested the University "to please put on escrow all union
dues/agency fees and whatever money considerations deducted from salaries of
concerned co-academic personnel until such time that an election of union officials has
been scheduled and subsequent elections has been held."5 (Underscoring in the original;
emphasis supplied)

Responding to the Aliazas group’s request, petitioners, citing the abovementioned DOLE
and BLR Orders, advised respondent by letter of August 16, 2001 as follows:

x x x By virtue of the 19 March 2001 Decision and the 06 July 2001 Order of the
Department of Labor and Employment (DOLE), the hold-over authority of your incumbent
set of officers has been considered extinguished and an election of new union officers, to
be conducted and supervised by the DOLE has been directed to be held. Until the result
of this election comes out and a declaration by the DOLE of the validly elected officers is
made, a void in the Union leadership exists.

In the light of these circumstances, the University has no other alternative but to
temporarily do the following:

1. Establish a savings account for the Union where all collected union dues and agency
fees will be deposited and held in trust; and

2. Discontinue normal relations with any group within the Union including the incumbent
set of officers.

We are informing you of this decision of the University not only for your guidance but also
for the apparent reason that the University does not want itself to be unnecessarily
involved in your intra-union dispute. This is the only way that the University can maintain
neutrality on this matter of grave concern. (Emphasis and underscoring supplied)

Petitioners’ above-quoted move drew respondent to file a complaint against petitioners for
Unfair Labor Practice (ULP complaint), claiming that petitioners unduly interfered with its
internal affairs and discriminated against its members. The ULP complaint was docketed
as NLRC-NCR Case No. S-30-08-03757-01.

During the pendency of its ULP complaint or on March 7, 2002, respondent filed its First
Notice of Strike with the Office of the Secretary of Labor (OSL), charging petitioners for 1)
gross violation of the CBA and 2) bargaining in bad faith which was certified for
compulsory arbitration to the NLRC (certified case). The certified case, docketed as
NLRC-NCR CC000222-02, was raffled to the NLRC Third Division.

In the meantime, Labor Arbiter Felipe Pati, by Decision of July 12, 2002, dismissed
respondent’s ULP complaint. Respondent appealed to the NLRC. The appeal was
docketed as NLRC-NCR CA No. 033173-02 and lodged at the NLRC Second Division.

While the dismissal of its ULP complaint was pending appeal before the
NLRC Second Division, respondent, on behalf of some of its members, filed four other
cases against petitioners which were lodged at the NLRC SecondDivision.

Respondent thereafter filed in the certified case which was lodged at the
NLRC Third Division a motion to have its four other cases and its ULP complaint
then pending appeal before the NLRC Second Division to have these cases "subsumed"
in the certified case. The NLRC Third Division granted respondent’s motion by Order of
April 30, 2003. Petitioners moved to reconsider this Order but it was denied, prompting
petitioners to elevate the matter via certiorari to the Court of Appeals. This petition,
docketed as CA G.R. No. SP-79798, was raffled to the appellate court’s Tenth Division.

The NLRC Second Division, in the meantime, affirmed by Decision of June 26, 2003, the
dismissal by the Arbiter of respondent’s ULP complaint. Respondent thus elevated the
case to the Court of Appeals via certiorari, docketed as CA-G.R. No. 81220. This was
raffled to the appellate court’s First Division.

By Decision of June 17, 2004, the Court of Appeals Tenth Division, to which petitioners’
certiorari petition in CA-G.R. No. SP-79798 challenging the April 30, 2003
NLRC Third Division Order "subsuming" respondent’s complaints including the ULP
Complaint under the certified case, REVERSED the said Order of the
NLRC Third Division6 with respect to the "subsuming" of respondent’s ULP complaint
under the certified case, the ULP complaint having been, at the time the
NLRC Third Division Order was issued, "already disposed of" (dismissed) by the Arbiter
and was in fact pending appeal before the NLRC Second Division. Thus the Tenth
Division of the appellate court held:

Anent ULP case with docket No. NLRC-NCR Case No. S-30-08-03757-01 raffled to Labor
Arbiter Pati for resolution, private respondent gravely erred in including it among the
cases to be consolidated with NLRC NCR CC No. 000222-02. The case is obviously no
longer under arbitration.
The records show that when complainant-appellee (respondent Union) filed its motion to
consolidate the cases on January 28, 2003 and the resolution of the said motion by the
Third Division of the NLRC on April 30, 2003 granting the desired
consolidation, NLRC-NCR Case No. S-30-08-03757-01 had already been disposed of by
Labor Arbiter Pati and was, in fact, already on appeal before the Second Division of the
NLRC, docketed therein as NLRC-NCR CA No. 033173-02. According to the Union itself,
on June 26, 2003, the NLRC affirmed the decision of Labor Arbiter Pati and on September
30, 2003, it denied the Union’s motion for reconsideration. x x x (Citation omitted)

The NLRC had thus already exhausted its jurisdiction over NLRC-NCR CA No.
033173-02. Consequently, the same case is now removed from the ambit of compulsory
arbitration and may only be subject of judicial review via the special civil action of certiorari
in this Court. But we are not informed if such a judicial action has been taken.7(Emphasis
and underscoring supplied)

The Court of Appeals First Division subsequently resolving respondent’s petition for
certiorari in CA-G.R. No. 81220(which assailed the affirmance by the
NLRC Second Division of the Arbiter’s dismissal of its ULP complaint), upon the sole
issue of "whether the NLRC [Second Division] committed grave abuse of discretion . . . in
ignoring the order of the [NLRC] 3rd Division declaring subsumed or absorbed [herein
respondent’s ULP complaint] in the certified case," answered the same in the affirmative
via the herein challenged September 16, 2005 Decision. It thus set aside the
NLRC Second Division Order affirming the dismissal of respondent’s ULP complaint and
accordingly ordered said NLRC Second Division to transmit the entire records of the ULP
complaint to the NLRC Third Divisionto which said ULP complaint had priorly been
ordered consolidated by the latter Division with the certified case.

WHEREFORE, premises considered, the petition is granted. Accordingly, the Order dated
June 26, 2003 of National Labor Relations Commission (NLRC) as well as the Order dated
September 30, 2003 are hereby set aside. The 2nd Division of the NLRC is hereby
directed to transmit the entire records of the case to the 3rd Division [of the NLRC] for its
resolution.

SO ORDERED.8 (Underscoring supplied)

Hence, petitioner’s petition for review on certiorari at bar.

Petitioners contend that the First Division of the Court of Appeals disregarded the ruling of
the appellate court’s Tenth Division setting aside the NLRC Third Division Order
"subsuming" respondent’s ULP complaint, which was lodged at the
NLRC Second Division, under the certified case pending with said NLRC Third Division.
They fault the First Division of the appellate court for

I
 . . . RULING THAT THE SECOND DIVISION OF THE NLRC
COMMITTED SERIOUS ERROR OR GRAVE ABUSE OF DISCRETION
WHEN IT AFFIRMED THE RULING OF LABOR ARBITER FELIPE P.
PATI DATED 12 JULY 2002 (THROUGH ITS RESOLUTION AND ORDER
DATED 26 JUNE 2003 AND 30 SEPTEMBER 2003,
RESPECTIVELY) CONSIDERING THAT:

A. WHEN THE NLRC’S SECOND DIVISION RENDERED ITS 26 JUNE

2003 RESOLUTION, WHICH DISMISSED THE APPEAL FILED BY THE
UNION AND AFFIRMED THE 12 JULY 2002 DECISION OF LABOR
ARBITER FELIPE P. PATI IN NLRC NCR CASE NO. 30-08-0357-01
(NLRC NCR CA NO. 033173-02), THE CONSOLIDATION ORDER OF
THE NLRC THIRD DIVISION IN NCMB-NCR-NS NO. 03-093-02 (NLRC
NCR CC NO. 000222-02) WHICH WAS ISSUED ON 30 APRIL 2003 HAD
NOT YET ATTAINED FINALITY.

B. . . . [NOT] TAK[ING] COGNIZANCE OF THE DECISION RENDERED

BY THE TENTH DIVISION OF THE SAME COURT DATED 17 JUNE 2004,
ANNULLING AND SETTING ASIDE THE 30 APRIL 2003 AND 28 JULY
2003 RESOLUTIONS OF THE THIRD DIVISION, WHICH ORDERED THE
CONSOLIDATION OF ALL CASES FILED BY THE UNION AGAINST
THE UNIVERSITY.9

In any event, petitioners contend that

II

THE SECOND DIVISION OF THE NLRC DID NOT GRAVELY ABUSE

ITS DISCRETION WHEN IT HELD THAT THE PETITIONERS WERE
NOT GUILTY OF UNFAIR LABOR PRACTICE, CONSIDERING THAT
THE TEMPORARY MEASURES IMPLEMENTED BY THE UNIVERSITY
WERE UNDERTAKEN IN GOOD FAITH AND ONLY TO MAINTAIN ITS
NEUTRALITY AMID THE INTRA-UNION DISPUTE."10 (Underscoring
supplied)

The petition is partly meritorious.

The June 17, 2004 Decision of the appellate court’s Tenth Division setting aside the order
of consolidation issued by the NLRC Third Division became final and executory on July 11,
2004. The herein challenged appellate court’s First Division Decision reversing the
NLRC Second Division Order which affirmed the dismissal of respondent’s ULP complaint
and directing that the records of said complaint be transmitted to the NLRC Third Division
was promulgated on September 16, 2005.
It is thus clear that the appellate court’s Tenth Division Decision declaring that the
NLRC Third Division’s order "subsuming" respondent’s ULP complaint (then pending
appeal before the NLRC Second Division) under the certified case pending before it
(NLRC Third division) had become final and executory on July 11, 2004. Therefore, with
respect to the herein challenged Decision of the appellate court’s First Division ordering
the NLRC Second Division to transmit the records of respondent’s ULP complaint to the
NLRC Third Division, the same can no longer be effected, the appellate court’s Tenth
Division ruling having, it bears repeating, become final.

To still transmit to the NLRC Third Division respondent’s ULP complaint on appeal which
has already been resolved by the NLRC Second Division would lead to absurd
consequences. 1avvphi1

On the other matter raised by petitioners – that their acts of withholding union and agency
dues and suspension of normal relations with respondent’s incumbent set of officers
pending the intra-union dispute did not constitute interference, the Court finds for
respondent.

Pending the final resolution of the intra-union dispute, respondent’s officers remained duly
authorized to conduct union affairs. The clarification letter of May 16, 2003 issued by BLR
Director Hans Leo J. Cacdac enlightens:

We take this opportunity to clarify that there is no void in the DLSUEA leadership. The 19
March 2001 Decision of DOLE-NCR Regional Director should not be construed as an
automatic termination of the incumbent officers’ tenure of office. As duly-elected officers of
the DLSUEA, their leadership is not deemed terminated by the expiration of their terms of
office, for they shall continue their functions and enjoy the rights and privileges pertaining
to their respective positions in a hold-over capacity, until their successors shall have been
elected and qualified.11 (Emphasis and underscoring supplied) 1avvphi1

It bears noting that at the time petitioners’ questioned moves were adopted, a valid and
existing CBA had been entered between the parties. It thus behooved petitioners to
observe the terms and conditions thereof bearing on union dues and representation. It is
axiomatic in labor relations that a CBA entered into by a legitimate labor organization and
an employer becomes the law between the parties, compliance with which is mandated by
express policy of the law.12

Respecting the issue of damages, respondent, in its Position Paper before the Labor
Arbiter, prayed for the award of exemplary damages, nominal damages, and attorney’s
fees.1avvphi1

Exemplary or corrective damages are imposed by way of example or correction for the
public good in addition to the moral, temperate, liquidated or compensatory damages.
While the amount of exemplary damages need not be proved, respondent must show
proof of entitlement to moral, temperate or compensatory damages before the Court may
consider awarding exemplary damages. No such damages were prayed for, however,
hence, the Court finds no basis to grant the prayer for exemplary damages.

Nonetheless, the grant of nominal damages and attorney’s fees to respondent under
Article 222113 and Article 2208 (8)14 of the Civil Code, respectively, is in order.

WHEREFORE, the petition, insofar as the challenged Court of Appeals First Division
Decision ordering the transmittal by the NLRC Second Division of the records of
respondent’s ULP complaint to the NLRC Third Divisionis concerned, has become moot.

In so far as the petition involves the merits of the NLRC Second Division Decision is
concerned, the same is REVERSED and a NEW one is entered finding petitioners liable
for Unfair Labor Practice, and ordering them to pay respondent nominal damages in the
amount of ₱250,000 and attorney’s fees in the amount of ₱50,000.

SO ORDERED.
G.R. No. 113907 February 28, 2000

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD

(MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA, MARIO
DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA
TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE
IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN,
ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA
TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI
BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO
ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA,
MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ
GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO, PEPITO
DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA SAMPAGA,
ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO,
PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA,
OSCAR SOTTO, CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER,
JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA SARMIENTO, SUSAN
MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG, CORAZON
NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE,
LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN
BALBOA, EUFRECINA SARMIENTO, SIMPLICIA SIMPLICIA BORLEO,
MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO,
ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE
AQUINO, HERMINIA RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH
ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO, ELIZA
SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA, ROSLYN
FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL,
CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA
CATRIZ, MILA MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA
ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA, PAULINA
DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA
IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS,
CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS,
LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO,
GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES, ISABELITA AURIN,
MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN,
EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES, FLORENCIA
ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA
AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO, CARMEN AMARILLO,
JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO, EDITHA ANTA ZO, MARY
JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA
ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA
ARRIOLA, EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA, ELIZABETH
AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS BUAG, MARIA
BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS,
VIOLETA BALLESTEROS, ROSARIO BALLADJAY, BETTY BORIO, ROMANA
BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA
BANGCORE, HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA,
PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA,
CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA
BISCOCHO, ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN
BUGNOT, ERLINDA BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA
BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO
BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA
BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO,
BERNANDITA BASILIDES, HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA,
ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN, THELMA DE BELEN,
JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA
BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION
MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA
BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN, LALIANE
CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS CABRERA,
JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA
CRUZ, MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO,
OFELIA CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS, LUCINA
CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA
CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA
CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA
CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA
COLINA, EFIPANIA CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO,
AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA
CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA
CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA CALIDGUID,
EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA CAMPO, CONNIE
CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL,
FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN,
EMMA CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA
CATARONGAN, JOSEFINA CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA
CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R. CHAVEZ, CONCEPCION
PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C.
CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS,
MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE
DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC,
ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA DANTES,
GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ,
MERCY DE LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS,
JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM, LUCITA
DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON, HERMINIA SAN
ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN
ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA. ELENA EGAR, GLORIA ERENO,
NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO, DEMETRIA
ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO, JULIA FARABIER,
TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS,
ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA
FAUSTINO, DOLORES FACUNDO, CRETITA FAMILARAN, EMELITA FIGUERAS, MA.
VIRGINIA FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO, NENITA
FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA,
SOCORRO GONZAGA, PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA
GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA,
JOSEFINA GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA,
VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA, DANILO GARCIA, ROSARIO
GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA, MARY
GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA
GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI,
SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA,
EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA, CRESTITA GONZALES,
FRANCISCA GUILING, JULIAN HERNANDEZ, HERRADURA, SUSANA HIPOLITO,
NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA
IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA,
JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE,
JOSEPHINE JENER, IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER,
VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ,
TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG,
LORNA LARGA, CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON,
IMELDA DE LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG,
REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA
LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE LEON,
FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA,
JUANITA MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS,
MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE MENDOZA,
LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA
MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA,
ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO,
NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA
MAHIYA, ELSA MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA
MAPA, JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA
MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA
MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA
MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA,
LYDIA NUDO, MYRIAM NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA
NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES,
MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA
NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN
OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS,
PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON,
REBECCA PACERAN, EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN,
ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT,
FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA,
MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD,
ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL, LOURDES
PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO PAGUIO,
PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO,
CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES,
NORMA PEREZ, MAURA PERSEVERANCIA, MARINA PETILLA, JOSIE PIA,
ZULVILITA PIODO, REBECCA PACERAN, CLARITA POLICARPIO, MAXIMO
POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO,
JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA
RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO,
FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA
RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES
NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED,
LEONITA RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS,
JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA
RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ,
LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES,
TERESITA REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO,
MELECIA ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA
SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN SIBAL,
ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA
SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA
SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA
SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA SIDELA,
ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA SARONG,
NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA
SALZAR, EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA
SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ, ESTRELLA
SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING,
ELENA SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA,
MONICA TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA
TEVES, ANTONINA DELA TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA
TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO,
JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA
UBALDE, GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ,
ROSELITA VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO,
ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS,
FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA
VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO, AUREA
VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA,
ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA
VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI,
MYRNA VASQUEZ, EVELNYN VEJERAMO, TEODORA VELASQUEZ, EDAN
VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU, ADELFA
YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA
CASTILLO, JOCELYN CASTRO, CREMENIA DELA CRUZ, JOSEPHINE IGNACIO,
MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA
LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN,
LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO,
NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL,
ROBERTO ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA
ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL,
CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA,
SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO,
JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION
ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE
ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA ATIENZA,
LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO,
JOSEPHINE ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE,
HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO,
ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO,
GUILLERMA BRUGES, BERNADETTE BARTOLOME, SHIRLEY BELMONTE,
MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG,
BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO,
FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE, ELSA
BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN,
PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO, APOLONIA
BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA
BADAMA, ELENA BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA
BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN,
MARIA CAMERINO,VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO,
EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO,
MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA GONG, TEOFILA
CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS,
VIOLETA CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA
CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR,
VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS,
IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA,
ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA,
VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG,
VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA
DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA
ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU, REMEDIOS EMBOLTORIO,
IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA,
MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO,
LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA FERNANDO,
EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO,
CHARITA GOREMBALEM, NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE
GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA,
HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA,
ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ,
JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO,
ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL,
ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ,
SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA,
EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA,
LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION LIBAO,
MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION
MACAREZA, AMALIA MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN
MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG, TERESITA NELLA,
GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA
MIRANDA, ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA
MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA
MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO,
BASILIZA MEDINA, VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA,
LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO,
JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO,
TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO,
LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA
MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA MARJES,
SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG, MARCELINA
NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA
ORACION, ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA OCAMPO,
MARDIANA OCTA, ROSELA OPAO, LIBRADA OCAMPO, YOLANDA OLIVER,
MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM
PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO,
JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA
PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA
PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES,
EDITHA PILAR, MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS
PINAS, EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD,
ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO,
MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS,
ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE
RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES,
JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA
ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA
REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA
SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO,
JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS
SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO SULIT, BELLA
SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA
TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO,
MACARIA TORRES, LUTGARDA TUSI, ESTELLA TORREJOS, VICTORIA TAN,
MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA
TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE
ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA
ALAPAN, EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA
ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE,
VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA
BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA
CAPISTRANO, BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA
CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG,
CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE,
LUCITA DONATO NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA
FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL,
SALVACION GAMBOA, JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA
JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA
LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA
LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE
LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY
MENDOZA, IRENEA MEDINA, NARCISA MABEZA, ROSANNA MEDINA, DELIA
MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA MENDOZA,
FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES
PACHECO, LILIA PADILLA, MARISSA PEREZ, FLORDELIZA PUMARES, LUZ
REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE SUMASAR, NANCY SAMALA,
EMERLITA SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA SIMBULAN,
JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA
VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA,
VIRGIE LAITAN, JULIET VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES,
ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA
SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA,
FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA
POASADAS, ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO,
EMMA REYES, NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO,
HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA LARGA,
TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA
REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA
DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE BAUTISTA,
MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA. FE
MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA
VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE
PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE,
CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO, IMELDA
MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA,
JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA
MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS
FRANCISCO, petitioners,
vs.
HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M.
GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C.
PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR.,
GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR.,
MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND RODRIGO
AGUILING, respondents.

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul the
decision of the National Labor Relations Commission in an unfair labor practice case
instituted by a local union against its employer company and the officers of its national
federation.

The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B)

(MSMG), hereinafter referred to as the "local union", is an affiliate of the private
respondent, United Lumber and General Workers of the Philippines (ULGWP), referred to
as the "federation". The collective bargaining agreement between MSMG and M.
Greenfield, Inc., names the parties as follows:

This agreement made and entered into by and between:

M. GREENFIELD, INC. (B) a corporation duly organized in accordance with the laws of
the Republic of the Philippines with office address at Km. 14, Merville Road, Parañaque,
Metro Manila, represented in this act by its General manager, Mr. Carlos T. Javelosa,
hereinafter referred to as the Company;

-and-

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B)

(MSMG)/UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES
(ULGWP), a legitimate labor organization with address at Suite 404, Trinity Building, T. M.
Kalaw Street, Manila, represented in this act by a Negotiating Committee headed by its
National President, Mr. Godofredo Paceno, Sr., referred to in this Agreement as the
UNION.1
The CBA includes, among others, the following pertinent provisions:

Art. II-Union Security

Sec. 1. Coverage and Scope. All employees who are covered by this Agreement and
presently members of the UNION shall remain members of the UNION for the duration of
this Agreement as a condition precedent to continued employment with the COMPANY.

xxx xxx xxx

Sec. 4. Dismissal. Any such employee mentioned in Section 2 hereof, who fails to
maintain his membership in the UNION for non-payment of UNION dues, for resignation
and for violation of UNION's Constitution and By-Laws and any new employee as defined
in Section 2 of this Article shall upon written notice of such failure to join or to maintain
membership in the UNION and upon written recommendation to the COMPANY by the
UNION, be dismissed from the employment by the COMPANY; provided, however, that
the UNION shall hold the COMPANY free and blameless from any and all liabilities that
may arise should the dismissed employee question, in any manner, his
dismissal; provided, further that the matter of the employee's dismissal under this Article
may be submitted as a grievance under Article XIII and, provided, finally, that no such
written recommendation shall be made upon the COMPANY nor shall COMPANY be
compelled to act upon any such recommendation within the period of sixty (60) days prior
to the expiry date of this Agreement conformably to law.

Art. IX

Sec. 4. Program Fund — The Company shall provide the amount of P10,000.00 a month
for a continuing labor education program which shall be remitted to the Federation . . .2

On September 12, 1986, a local union election was held under the auspices of the ULGWP
wherein the herein petitioner, Beda Magdalena Villanueva, and the other union officers
were proclaimed as winners. Minutes of the said election were duly filed with the Bureau
of Labor Relations on September 29, 1986.

On March 21, 1987, a Petition for Impeachment was filed with the national federation
ULGWP by the defeated candidates in the aforementioned election.

On June 16, 1987, the federation conducted an audit of the local union funds. The
investigation did not yield any unfavorable result and the local union officers were cleared
of the charges of anomaly in the custody, handling and disposition of the union funds. 1âwphi1.nêt

The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union
officers with the DOLE NCR on November 5, 1987, docketed as NCR-OD-M-11-780-87.
However, the same was dismissed on March 2, 1988, by Med-Arbiter Renato Parungo for
failure to substantiate the charges and to present evidence in support of the allegations.
On April 17, 1988, the local union held a general membership meeting at the Caruncho
Complex in Pasig. Several union members failed to attend the meeting, prompting the
Executive Board to create a committee tasked to investigate the non-attendance of
several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the
Constitution and By-Laws of the union, which read:

Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng
unyon ng sinumang kasapi o pinuno ay maaaring maging sanhi ng pagtitiwalag o
pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw na nagkulang.

Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing
na pagliban at maparusahan itong alinsunod sa Article V, Seksyong 4 ng Saligang Batas
na ito. Sino mang kasapi o pisyales na mahuli and dating sa takdang oras ng di lalampas
sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng
salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban.3

On June 27, 1988, the local union wrote respondent company a letter requesting it to
deduct the union fines from the wages/salaries of those union members who failed to
attend the general membership meeting. A portion of the said letter stated:

xxx xxx xxx

In connection with Section 4 Article II of our existing Collective Bargaining Agreement,

please deduct the amount of P50.00 from each of the union members named in said
annexes on the payroll of July 2-8, 1988 as fine for their failure to attend said general
membership meeting.4

In a Memorandum dated July 3, 1988, the Secretary General of the national federation,
Godofredo Paceño, Jr. disapproved the resolution of the local union imposing the P50.00
fine. The union officers protested such action by the Federation in a Reply dated July 4,
1988.

On July 11, 1988, the Federation wrote respondent company a letter advising the latter not
to deduct the fifty-peso fine from the salaries of the union members requesting that:

. . . any and all future representations by MSMG affecting a number of members be first
cleared from the federation before corresponding action by the Company.5

The following day, respondent company sent a reply to petitioner union's request in a
letter, stating that it cannot deduct fines from the employees' salary without going against
certain laws. The company suggested that the union refer the matter to the proper
government office for resolution in order to avoid placing the company in the middle of the
issue.
The imposition of P50.00 fine became the subject of bitter disagreement between the
Federation and the local union culminating in the latter's declaration of general autonomy
from the former through Resolution No. 10 passed by the local executive board and
ratified by the general membership on July 16, 1988.

In retaliation, the national federation asked respondent company to stop the remittance of
the local union's share in the education funds effective August 1988. This was objected to
by the local union which demanded that the education fund be remitted to it in full.

The company was thus constrained to file a Complaint for Interpleader with a Petition for
Declaratory Relief with the Med-Arbitration Branch of the Department of Labor and
Employment, docketed as Case No. OD-M-8-435-88. This was resolved on October 28,
1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:

WHEREFORE, premises considered, it is hereby ordered:

1. That the United Lumber and General Workers of the Philippines (ULGWP) through its
local union officers shall administer the collective bargaining agreement (CBA).

2. That petitioner company shall remit the P10,000.00 monthly labor education program
fund to the ULGWP subject to the condition that it shall use the said amount for its
intended purpose.

3. That the Treasurer of the MSMG shall be authorized to collect from the 356 union
members the amount of P50.00 as penalty for their failure to attend the general
membership assembly on April 17, 1988.

However, if the MSMG Officers could present the individual written authorizations of the
356 union members, then the company is obliged to deduct from the salaries of the 356
union members the P50.00 fine.6

On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989,

which modified in part the earlier disposition, to wit:

WHEREFORE, premises considered, the appealed portion is hereby modified to the

extent that the company should remit the amount of five thousand pesos (P5,000.00) of the
P10,000.00 monthly labor education program fund to ULGWP and the other P5,000.00 to
MSMG, both unions to use the same for its intended purpose.7

Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield, Grosby,
Triumph International, General Milling, and Vander Hons chapters) filed a Petition for
Audit and Examination of the federation and education funds of ULGWP which was
granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order which
directed the audit and examination of the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National Executive Board
Meeting at Nasipit, Agusan del Norte where a Resolution was passed placing the MSMG
under trusteeship and appointing respondent Cesar Clarete as administrator.

On October 27, 1988, the said administrator wrote the respondent company informing the
latter of its designation of a certain Alfredo Kalingking as local union president and
"disauthorizing" the incumbent union officers from representing the employees. This
action by the national federation was protested by the petitioners in a letter to respondent
company dated November 11, 1988.

On November 13, 1988, the petitioner union officers received identical letters from the
administrator requiring them to explain within 72 hours why they should not be removed
from their office and expelled from union membership.

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged National Executive Board Resolution placing
their union under trusteeship;

(b) Justifying the action of their union in declaring a general autonomy from ULGWP due
to the latter's inability to give proper educational, organizational and legal services to its
affiliates and the pendency of the audit of the federation funds;

(c) Advising that their union did not commit any act of disloyalty as it has remained an
affiliate of ULGWP;

(d) Giving ULGWP a period of five (5) days to cease and desist from further committing
acts of coercion, intimidation and harassment.8

However, as early as November 21, 1988, the officers were expelled from the ULGWP.
The termination letter read:

Effective today, November 21, 1988, you are hereby expelled from UNITED LUMBER
AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP) for committing acts of
disloyalty and/or acts inimical to the interest and violative to the Constitution and by-laws
of your federation.

You failed and/or refused to offer an explanation inspite of the time granted to you.

Since you are no longer a member of good standing, ULGWP is constrained to

recommend for your termination from your employment, and provided in Article II Section
4, known as UNION SECURITY, in the Collective Bargaining agreement.9

On the same day, the federation advised respondent company of the expulsion of the 30
union officers and demanded their separation from employment pursuant to the Union
Security Clause in their collective bargaining agreement. This demand was reiterated
twice, through letters dated February 21 and March 4, 1989, respectively, to respondent
company.

Thereafter, the Federation filed a Notice of Strike with the National Conciliation and
Mediation Board to compel the company to effect the immediate termination of the
expelled union officers.

On March 7, 1989, under the pressure of a threatened strike, respondent company

terminated the 30 union officers from employment, serving them identical copies of the
termination letter reproduced below:

We received a demand letter dated 21 November 1988 from the United Lumber and
General Workers of the Philippines (ULGWP) demanding for your dismissal from
employment pursuant to the provisions of Article II, Section 4 of the existing Collective
Bargaining Agreement (CBA). In the said demand letter, ULGWP informed us that as of
November 21, 1988, you were expelled from the said federation "for committing acts of
disloyalty and/or acts inimical to the interest of ULGWP and violative to its Constitution
and By-laws particularly Article V, Section 6, 9, and 12, Article XIII, Section 8.

In subsequent letters dated 21 February and 4 March 1989, the ULGWP reiterated its
demand for your dismissal, pointing out that notwithstanding your expulsion from the
federation, you have continued in your employment with the company in violation of Sec. 1
and 4 of Article II of our CBA, and of existing provisions of law.

In view thereof, we are left with no alternative but to comply with the provisions of the
Union Security Clause of our CBA. Accordingly, we hereby serve notice upon you that we
are dismissing you from your employment with M. Greenfield, Inc., pursuant to Sections 1
and 4, Article II of the CBA effective immediately.10

On that same day, the expelled union officers assigned in the first shift were physically or
bodily brought out of the company premises by the company's security guards. Likewise,
those assigned to the second shift were not allowed to report for work. This provoked
some of the members of the local union to demonstrate their protest for the dismissal of
the said union officers. Some union members left their work posts and walked out of the
company premises.

On the other hand, the Federation, having achieved its objective, withdrew the Notice of
Strike filed with the NCMB.

On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila,
docketed as Case No. NCMB-NCR-NS-03-216-89, alleging the following grounds for the
strike:

(a) Discrimination
(b) Interference in union activities

(c) Mass dismissal of union officers and shop stewards

(d) Threats, coercion and intimidation

(e) Union busting

The following day, March 9, 1989, a strike vote referendum was conducted and out of 2,
103 union members who cast their votes, 2,086 members voted to declare a strike.

On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition,
docketed as Case No. NCMB-NCR-NS-03-216-89, with the Office of the Secretary of the
Department of Labor and Employment praying for the suspension of the effects of their
termination from employment. However, the petition was dismissed by then Secretary
Franklin Drilon on April 11, 1989, the pertinent portion of which stated as follows:

At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-union
matter. No mass lay-off is evident as the terminations have been limited to those allegedly
leading the secessionist group leaving MSMG-ULGWP to form a union under the
KMU. . . .

xxx xxx xxx

WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our

extraordinary authority under Article 277 (b) of the Labor Code, as amended, the instant
Petition is hereby DISMISSED for lack of merit.

SO ORDERED.11

On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive
suspension by respondent company. This prompted the union members to again stage a
walk-out and resulted in the official declaration of strike at around 3:30 in the afternoon of
March 14, 1989. The strike was attended with violence, force and intimidation on both
sides resulting to physical injuries to several employees, both striking and non-striking,
and damage to company properties.

The employees who participated in the strike and allegedly figured in the violent incident
were placed under preventive suspension by respondent company. The company also
sent return-to-work notices to the home addresses of the striking employees thrice
successively, on March 27, April 8 and April 31, 1989, respectively. However, respondent
company admitted that only 261 employees were eventually accepted back to work.
Those who did not respond to the return-to-work notice were sent termination letters dated
May 17, 1989, reproduced below:

M. Greenfield Inc., (B)

 Km. 14, Merville Rd., Parañaque, M.M.

May 17, 1989

xxx xxx xxx

On March 14, 1989, without justifiable cause and without due notice, you
left your work assignment at the prejudice of the Company's operations.
On March 27, April 11, and April 21, 1989, we sent you notices to report to
the Company. Inspite of your receipt of said notices, we have not heard
from you up to this date.

Accordingly, for your failure to report, it is construed that you have

effectively abandoned your employment and the Company is, therefore,
constrained to dismiss you for said cause.

Very truly yours,

M. GREENFIELD, INC., (B)

By:

WENZEL STEPHEN LIGOT

Asst. HRD Manager12

On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch,
National Capital Region, DOLE, Manila, docketed as Case No. NCR-00-09-04199-89,
charging private respondents of unfair labor practice which consists of union busting,
illegal dismissal, illegal suspension, interference in union activities, discrimination, threats,
intimidation, coercion, violence, and oppression.

After the filing of the complaint, the lease contracts on the respondent company's office
and factory at Merville Subdivision, Parañaque expired and were not renewed. Upon
demand of the owners of the premises, the company was compelled to vacate its office
and factory.

Thereafter, the company transferred its administration and account/client servicing

department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For failure to find a
suitable place in Metro Manila for relocation of its factory and manufacturing operations,
the company was constrained to move the said departments to Tacloban, Leyte. Hence,
on April 16, 1990, respondent company accordingly notified its employees of a temporary
shutdown in operations. Employees who were interested in relocating to Tacloban were
advised to enlist on or before April 23, 1990.
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion but
was thereafter reassigned to Labor Arbiter Cresencio Ramos when respondents moved to
inhibit him from acting on the case.

On December 15, 1992, finding the termination to be valid in compliance with the union
security clause of the collective bargaining agreement, Labor Arbiter Cresencio Ramos
dismissed the complaint.

Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo
Putong retired from the service, leaving only two commissioners, Commissioner Vicente
Veloso III and Hon. Chairman Bartolome Carale in the First Division. When Commissioner
Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third
Division was temporarily designated to sit in the First Division for the proper disposition of
the case.

The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion
for reconsideration on January 28, 1994, petitioners elevated the case to this Court,
attributing grave abuse of discretion to public respondent NLRC in:

I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY RESPONDENT

COMPANY AS VALID;

II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS ILLEGAL;

III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO HAVE

ABANDONED THEIR WORK AND HENCE, VALIDLY DISMISSED BY RESPONDENT
COMPANY; AND

IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT FEDERATION

OFFICERS GUILTY OF ACTS OF UNFAIR LABOR PRACTICE.

Notwithstanding the several issues raised by the petitioners and respondents in the
voluminous pleadings presented before the NLRC and this Court, they revolve around
and proceed from the issue of whether or not respondent company was justified in
dismissing petitioner employees merely upon the labor federation's demand for the
enforcement of the union security clause embodied in their collective bargaining
agreement.

Before delving into the main issue, the procedural flaw pointed out by the petitioners
should first be resolved.

Petitioners contend that the decision rendered by the First Division of the NLRC is not
valid because Commissioner Tanodra, who is from the Third Division, did not have any
lawful authority to sit, much less write the ponencia, on a case pending before the First
Division. It is claimed that a commissioner from one division of the NLRC cannot be
assigned or temporarily designated to another division because each division is assigned
a particular territorial jurisdiction. Thus, the decision rendered did not have any legal effect
at all for being irregularly issued.

Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the
powers of the Chairman of the National Labor Relations Commission provides that:

The concurrence of two (2) Commissioners of a division shall be necessary for the
pronouncement of a judgment or resolution. Whenever the required membership in a
division is not complete and the concurrence of two (2) commissioners to arrive at a
judgment or resolution cannot be obtained, the Chairman shall designate such number of
additional Commissioners from the other divisions as may be necessary.

It must be remembered that during the pendency of the case in the First Division of the
NLRC, one of the three commissioners, Commissioner Romeo Putong, retired, leaving
Chairman Bartolome Carale and Commissioner Vicente Veloso III. Subsequently,
Commissioner Veloso inhibited himself from the case because the counsel for the
petitioners was his former classmate in law school. The First Division was thus left with
only one commissioner. Since the law requires the concurrence of two commissioners to
arrive at a judgment or resolution, the Commission was constrained to temporarily
designate a commissioner from another division to complete the First Division. There is
nothing irregular at all in such a temporary designation for the law empowers the
Chairman to make temporary assignments whenever the required concurrence is not met.
The law does not say that a commissioner from the first division cannot be temporarily
assigned to the second or third division to fill the gap or vice versa. The territorial divisions
do not confer exclusive jurisdiction to each division and are merely designed for
administrative efficiency.

Going into the merits of the case, the court finds that the Complaint for unfair labor
practice filed by the petitioners against respondent company which charges union busting,
illegal dismissal, illegal suspension, interference in union activities, discrimination, threats,
intimidation, coercion, violence, and oppression actually proceeds from one main issue
which is the termination of several employees by respondent company upon the demand
of the labor federation pursuant to the union security clause embodied in their collective
bargaining agreement.

Petitioners contend that their dismissal from work was effected in an arbitrary, hasty,
capricious and illegal manner because it was undertaken by the respondent company
without any prior administrative investigation; that, had respondent company conducted
prior independent investigation it would have found that their expulsion from the union was
unlawful similarly for lack of prior administrative investigation; that the federation cannot
recommend the dismissal of the union officers because it was not a principal party to the
collective bargaining agreement between the company and the union; that public
respondents acted with grave abuse of discretion when they declared petitioners'
dismissals as valid and the union strike as illegal and in not declaring that respondents
were guilty of unfair labor practice.

Private respondents, on the other hand, maintain that the thirty dismissed employees who
were former officers of the federation have no cause of action against the company, the
termination of their employment having been made upon the demand of the federation
pursuant to the union security clause of the CBA; the expelled officers of the local union
were accorded due process of law prior to their expulsion from their federation; that the
strike conducted by the petitioners was illegal for noncompliance with the requirements;
that the employees who participated in the illegal strike and in the commission of violence
thereof were validly terminated from work; that petitioners were deemed to have
abandoned their employment when they did not respond to the three return to work
notices sent to them; that petitioner labor union has no legal personality to file and
prosecute the case for and on behalf of the individual employees as the right to do so is
personal to the latter; and that, the officers of respondent company cannot be liable
because as mere corporate officers, they acted within the scope of their authority.

Public respondent, through the Labor Arbiter, ruled that the dismissed union officers were
validly and legally terminated because the dismissal was effected in compliance with the
union security clause of the CBA which is the law between the parties. And this was
affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared that
notwithstanding the lack of a prior administrative investigation by respondent company,
under the union security clause provision in the CBA, the company cannot look into the
legality or illegality of the recommendation to dismiss by the union nd the obligation to
dismiss is ministerial on the part of the company.13

This ruling of the NLRC is erroneous. Although this Court has ruled that union security
clauses embodied in the collective bargaining agreement may be validly enforced and that
dismissals pursuant thereto may likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the enforcement of union security clauses
which is the sanctity and inviolability of contracts14 cannot override one's right to due
process.

In the case of Cariño vs. National Labor Relations Commission,15 this Court pronounced
that while the company, under a maintenance of membership provision of the collective
bargaining agreement, is bound to dismiss any employee expelled by the union for
disloyalty upon its written request, this undertaking should not be done hastily and
summarily. The company acts in bad faith in dismissing a worker without giving him the
benefit of a hearing.

The power to dismiss is a normal prerogative of the employer. However, this is not without
limitation. The employer is bound to exercise caution in terminating the services of his
employees especially so when it is made upon the request of a labor union pursuant to the
Collective Bargaining Agreement, . . . Dismissals must not be arbitrary and capricious.
Due process must be observed in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should respect and protect the rights
of their employees, which include the right to labor.

In the case under scrutiny, petitioner union officers were expelled by the federation for
allegedly committing acts of disloyalty and/or inimical to the interest of ULGWP and in
violation of its Constitution and By-laws. Upon demand of the federation, the company
terminated the petitioners without conducting a separate and independent investigation.
Respondent company did not inquire into the cause of the expulsion and whether or not
the federation had sufficient grounds to effect the same. Relying merely upon the
federation's allegations, respondent company terminated petitioners from employment
when a separate inquiry could have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent company's allegation that
petitioners were accorded due process is belied by the termination letters received by the
petitioners which state that the dismissal shall be immediately effective.

As held in the aforecited case of Cariño, "the right of an employee to be informed of the
charges against him and to reasonable opportunity to present his side in a controversy
with either the company or his own union is not wiped away by a union security clause or
a union shop clause in a collective bargaining agreement. An employee is entitled to be
protected not only from a company which disregards his rights but also from his own union
the leadership of which could yield to the temptation of swift and arbitrary expulsion from
membership and mere dismissal from his job.

While respondent company may validly dismiss the employees expelled by the union for
disloyalty under the union security clause of the collective bargaining agreement upon the
recommendation by the union, this dismissal should not be done hastily and summarily
thereby eroding the employees' right to due process, self-organization and security of
tenure. The enforcement of union security clauses is authorized by law provided such
enforcement is not characterized by arbitrariness, and always with due process.16 Even on
the assumption that the federation had valid grounds to expel the union officers, due
process requires that these union officers be accorded a separate hearing by respondent
company.

In its decision, public respondent also declared that if complainants (herein petitioners)
have any recourse in law, their right of action is against the federation and not against the
company or its officers, relying on the findings of the Labor Secretary that the issue of
expulsion of petitioner union officers by the federation is a purely intra-union matter.

Again, such a contention is untenable. While it is true that the issue of expulsion of the
local union officers is originally between the local union and the federation, hence,
intra-union in character, the issue was later on converted into a termination dispute when
the company dismissed the petitioners from work without the benefit of a separate notice
and hearing. As a matter of fact, the records reveal that the termination was effective on
the same day that the termination notice was served on the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.17, the Court
held the company liable for the payment of backwages for having acted in bad faith in
effecting the dismissal of the employees.

. . . Bad faith on the part of the respondent company may be gleaned from the fact that the
petitioner workers were dismissed hastily and summarily. At best, it was guilty of a tortious
act, for which it must assume solidary liability, since it apparently chose to summarily
dismiss the workers at the union's instance secure in the union's contractual undertaking
that the union would hold it "free from any liability" arising from such dismissal.

Thus, notwithstanding the fact that the dismissal was at the instance of the federation and
that it undertook to hold the company free from any liability resulting from such a dismissal,
the company may still be held liable if it was remiss in its duty to accord the would-be
dismissed employees their right to be heard on the matter.

Anent petitioners contention that the federation was not a principal party to the collective
bargaining agreement between the company and the union, suffice it to say that the
matter was already ruled upon in the Interpleader case filed by respondent company.
Med-Arbiter Anastacio Bactin thus ruled:

After a careful examination of the facts and evidences presented by the parties, this
Officer hereby renders its decision as follows:

1.) It appears on record that in Collective Bargaining Agreement (CBA) which took effect
on July 1, 1986, the contracting parties are M. Greenfield, Inc. (B) and Malayang Samahan
ng Mga Manggagawa sa M. Greenfield, Inc. (B) (MSMG)/United Lumber and General
Workers of the Philippines (ULGWP). However, MSMG was not yet registered labor
organization at the time of the signing of the CBA. Hence, the union referred to in the CBA
is the ULGWP.18

Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:

It is undisputed that ULGWP is the certified sole and exclusive collective bargaining agent
of all the regular rank-and-file workers of the company, M. Greenfield, Inc. (pages 31-32 of
the records).

It has been established also that the company and ULGWP signed a 3-year collective
bargaining agreement effective July 1, 1986 up to June 30, 1989.19

Although the issue of whether or not the federation had reasonable grounds to expel the
petitioner union officers is properly within the original and exclusive jurisdiction of the
Bureau of Labor Relations, being an intra-union conflict, this Court deems it justifiable that
such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to
the Bureau of Labor Relations would be to intolerably delay the case.
The Labor Arbiter found that petitioner union officers were justifiably expelled from the
federation for committing acts of disloyalty when it "undertook to disaffiliate from the
federation by charging ULGWP with failure to provide any legal, educational or
organizational support to the local. . . . and declared autonomy, wherein they prohibit the
federation from interfering in any internal and external affairs of the local union."20

It is well-settled that findings of facts of the NLRC are entitled to great respect and are
generally binding on this Court, but it is equally well-settled that the Court will not uphold
erroneous conclusions of the NLRC as when the Court finds insufficient or insubstantial
evidence on record to support those factual findings. The same holds true when it is
perceived that far too much is concluded, inferred or deduced from the bare or incomplete
facts appearing of record.21

In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of
autonomy by the local union was part of its "plan to take over the respondent federation."
This is purely conjecture and speculation on the part of public respondent, totally
unsupported by the evidence.

A local union has the right to disaffiliate from its mother union or declare its autonomy. A
local union, being a separate and voluntary association, is free to serve the interests of all
its members including the freedom to disaffiliate or declare its autonomy from the
federation to which it belongs when circumstances warrant, in accordance with the
constitutional guarantee of freedom of association.22

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

. . . is to increase by collective action the bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association, free to serve
their own and the common interest of all, subject to the restraints imposed by the
Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into
existence.23

Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence
of specific provisions in the federation's constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local may dissociate with its parent union.24

The evidence on hand does not show that there is such a provision in ULGWP's
constitution. Respondents' reliance upon Article V, Section 6, of the federation's
constitution is not right because said section, in fact, bolsters the petitioner union's claim
of its right to declare autonomy:

Sec. 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as
it pertains to its internal affairs, except as provided elsewhere in this Constitution.
There is no disloyalty to speak of, neither is there any violation of the federation's
constitution because there is nothing in the said constitution which specifically prohibits
disaffiliation or declaration of autonomy. Hence, there cannot be any valid dismissal
because Article II, Section 4 of the union security clause in the CBA limits the dismissal to
only three (3) grounds, to wit: failure to maintain membership in the union (1) for
non-payment of union dues, (2) for resignation; and (3) for violation of the union's
Constitution and By-Laws.

To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on
February 26, 1989, the petitioners declared as vacant all the responsible positions of
ULGWP, filled these vacancies through an election and filed a petition for the registration
of UWP as a national federation. It should be pointed out, however, that these occurred
after the federation had already expelled the union officers. The expulsion was effective
November 21, 1988. Therefore, the act of establishing a different federation, entirely
separate from the federation which expelled them, is but a normal retaliatory reaction to
their expulsion.

With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that
the strike was illegal for the following reasons: (1) it was based on an intra-union dispute
which cannot properly be the subject of a strike, the right to strike being limited to cases of
bargaining deadlocks and unfair labor practice (2) it was made in violation of the "no strike,
no lock-out" clause in the CBA, and (3) it was attended with violence, force and
intimidation upon the persons of the company officials, other employees reporting for work
and third persons having legitimate business with the company, resulting to serious
physical injuries to several employees and damage to company property.

On the submission that the strike was illegal for being grounded on a non-strikeable issue,
that is, the intra-union conflict between the federation and the local union, it bears
reiterating that when respondent company dismissed the union officers, the issue was
transformed into a termination dispute and brought respondent company into the picture.
Petitioners believed in good faith that in dismissing them upon request by the federation,
respondent company was guilty of unfair labor practice in that it violated the petitioner's
right to self-organization. The strike was staged to protest respondent company's act of
dismissing the union officers. Even if the allegations of unfair labor practice are
subsequently found out to be untrue, the presumption of legality of the strike prevails.25

Another reason why the Labor Arbiter declared the strike illegal is due to the existence of
a no strike no lockout provision in the CBA. Again, such a ruling is erroneous. A no strike,
no lock out provision can only be invoked when the strike is economic in nature, i.e. to
force wage or other concessions from the employer which he is not required by law to
grant.26 Such a provision cannot be used to assail the legality of a strike which is grounded
on unfair labor practice, as was the honest belief of herein petitioners. Again, whether or
not there was indeed unfair labor practice does not affect the strike.
On the allegation of violence committed in the course of the strike, it must be remembered
that the Labor Arbiter and the Commission found that "the parties are agreed that there
were violent incidents . . . resulting to injuries to both sides, the union and
management."27 The evidence on record show that the violence cannot be attributed to the
striking employees alone for the company itself employed hired men to pacify the strikers.
With violence committed on both sides, the management and the employees, such
violence cannot be a ground for declaring the strike as illegal.

With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their
refusal to heed respondent's recall to work notice is a clear indication that they were no
longer interested in continuing their employment and is deemed abandonment. It is
admitted that three return to work notices were sent by respondent company to the
striking employees on March 27, April 11, and April 21, 1989 and that 261 employees who
responded to the notice were admitted back to work.

However, jurisprudence holds that for abandonment of work to exist, it is essential (1) that
the employee must have failed to report for work or must have been absent without valid
or justifiable reason; and (2) that there must have been a clear intention to sever the
employer-employee relationship manifested by some overt acts.28 Deliberate and
unjustified refusal on the part of the employee to go back to his work post amd resume his
employment must be established. Absence must be accompanied by overt acts unerringly
pointing to the fact that the employee simply does not want to work anymore.29 And the
burden of proof to show that there was unjustified refusal to go back to work rests on the
employer.

In the present case, respondents failed to prove that there was a clear intention on the
part of the striking employees to sever their employer-employee relationship. Although
admittedly the company sent three return to work notices to them, it has not been
substantially proven that these notices were actually sent and received by the employees.
As a matter of fact, some employees deny that they ever received such notices. Others
alleged that they were refused entry to the company premises by the security guards and
were advised to secure a clearance from ULGWP and to sign a waiver. Some employees
who responded to the notice were allegedly told to wait for further notice from respondent
company as there was lack of work.

Furthermore, this Court has ruled that an employee who took steps to protest his lay-off
cannot be said to have abandoned his work.30 The filing of a complaint for illegal dismissal
is inconsistent with the allegation of abandonment. In the case under consideration, the
petitioners did, in fact, file a complaint when they were refused reinstatement by
respondent company.

Anent public respondent's finding that there was no unfair labor practice on the part of
respondent company and federation officers, the Court sustains the same. As earlier
discussed, union security clauses in collective bargaining agreements, if freely and
voluntarily entered into, are valid and binding. Corollary, dismissals pursuant to union
security clauses are valid and legal subject only to the requirement of due process, that is,
notice and hearing prior to dismissal. Thus, the dismissal of an employee by the company
pursuant to a labor union's demand in accordance with a union security agreement does
not constitute unfair labor practice.31

However, the dismissal was invalidated in this case because of respondent company's
failure to accord petitioners with due process, that is, notice and hearing prior to their
termination. Also, said dismissal was invalidated because the reason relied upon by
respondent Federation was not valid. Nonetheless, the dismissal still does not constitute
unfair labor practice.

Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot
be held personally liable for damages on account of the employees' dismissal because
the employer corporation has a personality separate and distinct from its officers who
merely acted as its agents.

It has come to the attention of this Court that the 30-day prior notice requirement for the
dismissal of employees has been repeatedly violated and the sanction imposed for such
violation enunciated in Wenphil Corporation vs. NLRC32 has become an ineffective
deterrent. Thus, the Court recently promulgated a decision to reinforce and make more
effective the requirement of notice and hearing, a procedure that must be observed before
termination of employment can be legally effected.

In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January 27,
2000), the Court ruled that an employee who is dismissed, whether or not for just or
authorized cause but without prior notice of his termination, is entitled to full backwages
from the time he was terminated until the decision in his case becomes final, when the
dismissal was for cause; and in case the dismissal was without just or valid cause, the
backwages shall be computed from the time of his dismissal until his actual reinstatement.
In the case at bar, where the requirement of notice and hearing was not complied with, the
aforecited doctrine laid down in the Serrano case applies.

WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations
Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the
respondent company is hereby ordered to immediately reinstate the petitioners to their
respective positions. Should reinstatement be not feasible, respondent company shall pay
separation pay of one month salary for every year of service. Since petitioners were
terminated without the requisite written notice at least 30 days prior to their termination,
following the recent ruling in the case of Ruben Serrano vs. National Labor Relations
Commission and Isetann Department Store, the respondent company is hereby ordered
to pay full backwages to petitioner-employees while the Federation is also ordered to pay
full backwages to petitioner-union officers who were dismissed upon its instigation. Since
the dismissal of petitioners was without cause, backwages shall be computed from the
time the herein petitioner employees and union officers were dismissed until their actual
reinstatement. Should reinstatement be not feasible, their backwages shall be computed
from the time petitioners were terminated until the finality of this decision. Costs against
the respondent company. 1âwphi1.nêt

SO ORDERED.
G.R. No. 170287 February 14, 2008

ALABANG COUNTRY CLUB, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, ALABANG COUNTRY CLUB
INDEPENDENT EMPLOYEES UNION, CHRISTOPHER PIZARRO, MICHAEL BRAZA,
and NOLASCO CASTUERAS, respondents.

DECISION

VELASCO, JR., J.:

Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation with
principal office at Country Club Drive, Ayala Alabang, Muntinlupa City. Respondent
Alabang Country Club Independent Employees Union (Union) is the exclusive bargaining
agent of the Club's rank-and-file employees. In April 1996, respondents Christopher
Pizarro, Michael Braza, and Nolasco Castueras were elected Union President,
Vice-President, and Treasurer, respectively.

On June 21, 1999, the Club and the Union entered into a Collective Bargaining Agreement
(CBA), which provided for a Union shop and maintenance of membership shop.

The pertinent parts of the CBA included in Article II on Union Security read, as follows:

ARTICLE II

UNION SECURITY

SECTION 1. CONDITION OF EMPLOYMENT. All regular rank-and-file employees, who

are members or subsequently become members of the UNION shall maintain their
membership in good standing as a condition for their continued employment by the CLUB
during the lifetime of this Agreement or any extension thereof.

SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR NEW REGULAR

RANK-AND-FILE EMPLOYEES

a) New regular rank-and-file employees of the Club shall join the UNION within five (5)
days from the date of their appointment as regular employees as a condition for their
continued employment during the lifetime of this Agreement, otherwise, their failure to do
so shall be a ground for dismissal from the CLUB upon demand by the UNION.

b) The Club agrees to furnish the UNION the names of all new probationary and regular
employees covered by this Agreement not later than three (3) days from the date of
regular appointment showing the positions and dates of hiring.

xxxx
SECTION 4. TERMINATION UPON UNION DEMAND. Upon written demand of the
UNION and after observing due process, the Club shall dismiss a regular rank-and-file
employee on any of the following grounds:

(a) Failure to join the UNION within five (5) days from the time of regularization;

(b) Resignation from the UNION, except within the period allowed by law;

(c) Conviction of a crime involving moral turpitude;

(d) Non-payment of UNION dues, fees, and assessments;

(e) Joining another UNION except within the period allowed by law;

(f) Malversation of union funds;

(g) Actively campaigning to discourage membership in the UNION; and

(h) Inflicting harm or injury to any member or officer of the UNION.

It is understood that the UNION shall hold the CLUB free and harmless [sic] from any
liability or damage whatsoever which may be imposed upon it by any competent judicial or
quasi-judicial authority as a result of such dismissal and the UNION shall reimburse the
CLUB for any and all liability or damage it may be adjudged.1 (Emphasis supplied.)

Subsequently, in July 2001, an election was held and a new set of officers was elected.
Soon thereafter, the new officers conducted an audit of the Union funds. They discovered
some irregularly recorded entries, unaccounted expenses and disbursements, and
uncollected loans from the Union funds. The Union notified respondents Pizarro, Braza,
and Castueras of the audit results and asked them to explain the discrepancies in writing.2

Thereafter, on October 6, 2001, in a meeting called by the Union, respondents Pizarro,

Braza, and Castueras explained their side. Braza denied any wrongdoing and instead
asked that the investigation be addressed to Castueras, who was the Union Treasurer at
that time. With regard to his unpaid loans, Braza claimed he had been paying through
monthly salary deductions and said the Union could continue to deduct from his salary
until full payment of his loans, provided he would be reimbursed should the result of the
initial audit be proven wrong by a licensed auditor. With regard to the Union expenses
which were without receipts, Braza explained that these were legitimate expenses for
which receipts were not issued, e.g. transportation fares, food purchases from small
eateries, and food and transportation allowances given to Union members with pending
complaints with the Department of Labor and Employment, the National Labor Relations
Commission (NLRC), and the fiscal's office. He explained that though there were no
receipts for these expenses, these were supported by vouchers and itemized as
expenses. Regarding his unpaid and unliquidated cash advances amounting to almost
PhP 20,000, Braza explained that these were not actual cash advances but payments to a
certain Ricardo Ricafrente who had loaned PhP 200,000 to the Union.3

Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and cash
advances. He claimed his salaries were regularly deducted to pay his loan and he did not
know why these remained unpaid in the records. Nonetheless, he likewise agreed to
continuous salary deductions until all his accountabilities were paid.4

Castueras also denied any wrongdoing and claimed that the irregular entries in the
records were unintentional and were due to inadvertence because of his voluminous work
load. He offered that his unpaid personal loan of PhP 27,500 also be deducted from his
salary until the loans were fully paid. Without admitting any fault on his part, Castueras
suggested that his salary be deducted until the unaccounted difference between the loans
and the amount collected amounting to a total of PhP 22,000 is paid.5

Despite their explanations, respondents Pizarro, Braza, and Castueras were expelled
from the Union, and, on October 16, 2001, were furnished individual letters of expulsion for
malversation of Union funds.6 Attached to the letters were copies of the Panawagan ng
mga Opisyales ng Unyon signed by 37 out of 63 Union members and officers, and a Board
of Directors' Resolution7 expelling them from the Union.

In a letter dated October 18, 2001, the Union, invoking the Security Clause of the CBA,
demanded that the Club dismiss respondents Pizarro, Braza, and Castueras in view of
their expulsion from the Union.8 The Club required the three respondents to show cause in
writing within 48 hours from notice why they should not be dismissed. Pizarro and
Castueras submitted their respective written explanations on October 20, 2001, while
Braza submitted his explanation the following day.

During the last week of October 2001, the Club's general manager called respondents
Pizarro, Braza, and Castueras for an informal conference inquiring about the charges
against them. Said respondents gave their explanation and asserted that the Union funds
allegedly malversed by them were even over the total amount collected during their tenure
as Union officers-PhP 120,000 for Braza, PhP 57,000 for Castueras, and PhP 10,840 for
Pizarro, as against the total collection from April 1996 to December 2001 of only PhP
102,000. They claimed the charges are baseless. The general manager announced he
would conduct a formal investigation.

Nonetheless, after weighing the verbal and written explanations of the three respondents,
the Club concluded that said respondents failed to refute the validity of their expulsion
from the Union. Thus, it was constrained to terminate the employment of said respondents.
On December 26, 2001, said respondents received their notices of termination from the
Club.9

Respondents Pizarro, Braza, and Castueras challenged their dismissal from the Club in
an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-00130-02 filed with
the NLRC, National Capital Region Arbitration Branch. In his January 27, 2003
Decision,10 the Labor Arbiter ruled in favor of the Club, and found that there was justifiable
cause in terminating said respondents. He dismissed the complaint for lack of merit.

On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal
docketed as NLRC NCR CA No. 034601-03 with the NLRC.

On February 26, 2004, the NLRC rendered a Decision11 granting the appeal, the fallo of
which reads:

WHEREFORE, finding merit in the Appeal, judgment is hereby rendered declaring the
dismissal of the complainants illegal. x x x Alabang Country Club, Inc. and Alabang
Country Club Independent Union are hereby ordered to reinstate complainants
Christopher Pizarro, Nolasco Castueras and Michael Braza to their former positions
without loss of seniority rights and other privileges with full backwages from the time they
were dismissed up to their actual reinstatement.

SO ORDERED.

The NLRC ruled that there was no justifiable cause for the termination of respondents
Pizarro, Braza, and Castueras. The commissioners relied heavily on Section 2, Rule XVIII
of the Rules Implementing Book V of the Labor Code. Sec. 2 provides:

SEC. 2. Actions arising from Article 241 of the Code. - Any action arising from the
administration or accounting of union funds shall be filed and disposed of as an
intra-union dispute in accordance with Rule XIV of this Book.

In case of violation, the Regional or Bureau Director shall order the responsible officer to
render an accounting of funds before the general membership and may, where
circumstances warrant, mete the appropriate penalty to the erring officer/s, including
suspension or expulsion from the union.12

According to the NLRC, said respondents' expulsion from the Union was illegal since the
DOLE had not yet made any definitive ruling on their liability regarding the administration
of the Union's funds.

The Club then filed a motion for reconsideration which the NLRC denied in its June 20,
2004 Resolution.13

Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition for
Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of Appeals (CA).

The CA Upheld the NLRC Ruling

that the Three Respondents were Deprived Due Process
On July 5, 2005, the appellate court rendered a Decision,14 denying the petition and
upholding the Decision of the NLRC. The CA's Decision focused mainly on the Club's
perceived failure to afford due process to the three respondents. It found that said
respondents were not given the opportunity to be heard in a separate hearing as required
by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, as
follows:

SEC. 2. Standards of due process; requirements of notice.-In all cases of termination

of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Code:

xxxx

(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him.

The CA also said the dismissal of the three respondents was contrary to the doctrine laid
down in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos (Malayang
Samahan), where this Court ruled that even on the assumption that the union had valid
grounds to expel the local union officers, due process requires that the union officers be
accorded a separate hearing by the employer company.15

In a Resolution16 dated October 20, 2005, the CA denied the Club's motion for
reconsideration.

The Club now comes before this Court with these issues for our resolution, summarized
as follows:

1. Whether there was just cause to dismiss private respondents, and whether they were
afforded due process in accordance with the standards provided for by the Labor Code
and its Implementing Rules.

2. Whether or not the CA erred in not finding that the NLRC committed grave abuse of
discretion amounting to lack or excess of jurisdiction when it ruled that respondents
Pizarro, Braza, and Castueras were illegally expelled from the Union.

3. Whether the case of Agabon vs. NLRC17 should be applied to this case.

4. Whether that in the absence of bad faith and malice on the part of the Club, the Union is
solely liable for the termination from employment of said respondents.

The main issue is whether the three respondents were illegally dismissed and whether
they were afforded due process.
The Club avers that the dismissal of the three respondents was in accordance with the
Union security provisions in their CBA. The Club also claims that the three respondents
were afforded due process, since the Club conducted an investigation separate and
independent from that conducted by the Union.

Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the Club
failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII, Book V of the
implementing rules of the Code.

First, we resolve the legality of the three respondents' dismissal from the Club.

Valid Grounds for Termination

Under the Labor Code, an employee may be validly terminated on the following grounds:
(1) just causes under Art. 282; (2) authorized causes under Art. 283; (3) termination due to
disease under Art. 284; and (4) termination by the employee or resignation under Art. 285.

Another cause for termination is dismissal from employment due to the enforcement of the
union security clause in the CBA. Here, Art. II of the CBA on Union security contains the
provisions on the Union shop and maintenance of membership shop. There is union shop
when all new regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership shop
when employees who are union members as of the effective date of the agreement, or
who thereafter become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the bargaining unit or
the agreement is terminated.18 Termination of employment by virtue of a union security
clause embodied in a CBA is recognized and accepted in our jurisdiction.19 This practice
strengthens the union and prevents disunity in the bargaining unit within the duration of
the CBA. By preventing member disaffiliation with the threat of expulsion from the union
and the consequent termination of employment, the authorized bargaining representative
gains more numbers and strengthens its position as against other unions which may want
to claim majority representation.

In terminating the employment of an employee by enforcing the union security clause, the
employer needs only to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision
in the CBA; and (3) there is sufficient evidence to support the union's decision to expel the
employee from the union. These requisites constitute just cause for terminating an
employee based on the CBA's union security provision.

The language of Art. II of the CBA that the Union members must maintain their
membership in good standing as a condition sine qua non for their continued employment
with the Club is unequivocal. It is also clear that upon demand by the Union and after due
process, the Club shall terminate the employment of a regular rank-and-file employee who
may be found liable for a number of offenses, one of which is malversation of Union
funds.20

Below is the letter sent to respondents Pizarro, Braza, and Castueras, informing them of
their termination:

On October 18, 2001, the Club received a letter from the Board of Directors of the Alabang
Country Club Independent Employees' Union ("Union") demanding your dismissal from
service by reason of your alleged commission of act of dishonesty, specifically
malversation of union funds. In support thereof, the Club was furnished copies of the
following documents:

1. A letter under the subject "Result of Audit" dated September 14, 2001 (receipt of which
was duly acknowledged from your end), which required you to explain in writing the
charges against you (copy attached);

2. The Union's Board of Directors' Resolution dated October 2, 2001, which explained that
the Union afforded you an opportunity to explain your side to the charges;

3. Minutes of the meeting of the Union's Board of Directors wherein an administrative

investigation of the case was conducted last October 6, 2001; and

4. The Union's Board of Directors' Resolution dated October 15, 2001 which resolved your
expulsion from the Union for acts of dishonesty and malversation of union funds, which
was duly approved by the general membership.

After a careful evaluation of the evidence on hand vis-à-vis a thorough assessment of

your defenses presented in your letter-explanation dated October 6, 2001 of which you
also expressed that you waived your right to be present during the administrative
investigation conducted by the Union's Board of Directors on October 6, 2001,
Management has reached the conclusion that there are overwhelming reasons to
consider that you have violated Section 4(f) of the CBA, particularly on the grounds of
malversation of union funds. The Club has determined that you were sufficiently afforded
due process under the circumstances.

Inasmuch as the Club is duty-bound to comply with its obligation under Section 4(f) of the
CBA, it is unfortunate that Management is left with no other recourse but to consider your
termination from service effective upon your receipt thereof. We wish to thank you for your
services during your employment with the Company. It would be more prudent that we just
move on independently if only to maintain industrial peace in the workplace.

Be guided accordingly.21

Gleaned from the above, the three respondents were expelled from and by the Union after
due investigation for acts of dishonesty and malversation of Union funds. In accordance
with the CBA, the Union properly requested the Club, through the October 18, 2001
letter22 signed by Mario Orense, the Union President, and addressed to Cynthia Figueroa,
the Club's HRD Manager, to enforce the Union security provision in their CBA and
terminate said respondents. Then, in compliance with the Union's request, the Club
reviewed the documents submitted by the Union, requested said respondents to submit
written explanations, and thereafter afforded them reasonable opportunity to present their
side. After it had determined that there was sufficient evidence that said respondents
malversed Union funds, the Club dismissed them from their employment conformably with
Sec. 4(f) of the CBA.

Considering the foregoing circumstances, we are constrained to rule that there is

sufficient cause for the three respondents' termination from employment.

Were respondents Pizarro, Braza, and Castueras accorded due process before their
employments were terminated?

We rule that the Club substantially complied with the due process requirements before it
dismissed the three respondents.

The three respondents aver that the Club violated their rights to due process as
enunciated in Malayang Samahan,23 when it failed to conduct an independent and
separate hearing before they were dismissed from service.

The CA, in dismissing the Club's petition and affirming the Decision of the NLRC, also
relied on the same case. We explained in Malayang Samahan:

x x x Although this Court has ruled that union security clauses embodied in the collective
bargaining agreement may be validly enforced and that dismissals pursuant thereto may
likewise be valid, this does not erode the fundamental requirements of due process. The
reason behind the enforcement of union security clauses which is the sanctity and
inviolability of contracts cannot override one's right to due process.24

In the above case, we pronounced that while the company, under a maintenance of
membership provision of the CBA, is bound to dismiss any employee expelled by the
union for disloyalty upon its written request, this undertaking should not be done hastily
and summarily. The company acts in bad faith in dismissing a worker without giving him
the benefit of a hearing.25 We cautioned in the same case that the power to dismiss is a
normal prerogative of the employer; however, this power has a limitation. The employer is
bound to exercise caution in terminating the services of the employees especially so when
it is made upon the request of a labor union pursuant to the CBA. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing employees
because the dismissal affects not only their positions but also their means of livelihood.
Employers should respect and protect the rights of their employees, which include the
right to labor.26
The CA and the three respondents err in relying on Malayang Samahan, as its ruling has
no application to this case. In Malayang Samahan, the union members were expelled
from the union and were immediately dismissed from the company without any semblance
of due process. Both the union and the company did not conduct administrative hearings
to give the employees a chance to explain themselves. In the present case, the Club has
substantially complied with due process. The three respondents were notified that their
dismissal was being requested by the Union, and their explanations were heard. Then, the
Club, through its President, conferred with said respondents during the last week of
October 2001. The three respondents were dismissed only after the Club reviewed and
considered the documents submitted by the Union vis-à-vis the written explanations
submitted by said respondents. Under these circumstances, we find that the Club had
afforded the three respondents a reasonable opportunity to be heard and defend
themselves.

On the applicability of Agabon, the Club points out that the CA ruled that the three
respondents were illegally dismissed primarily because they were not afforded due
process. We are not unaware of the doctrine enunciated in Agabon that when there is just
cause for the dismissal of an employee, the lack of statutory due process should not nullify
the dismissal, or render it illegal or ineffectual, and the employer should indemnify the
employee for the violation of his statutory rights.27 However, we find that we could not
apply Agabon to this case as we have found that the three respondents were validly
dismissed and were actually afforded due process.

Finally, the issue that since there was no bad faith on the part of the Club, the Union is
solely liable for the termination from employment of the three respondents, has been
mooted by our finding that their dismissal is valid.

WHEREFORE, premises considered, the Decision dated July 5, 2005 of the CA and the
Decision dated February 26, 2004 of the NLRC are hereby REVERSED and SET
ASIDE. The Decision dated January 27, 2003 of the Labor Arbiter in NLRC-NCR Case No.
30-01-00130-02 is hereby REINSTATED.

No costs.

SO ORDERED.
G.R. No. 114974 June 16, 2004

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner,

vs.
The Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF
LABOR AND EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents.

DECISION

CALLEJO, SR., J.:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard
Chartered Bank Employees Union, seeking the nullification of the October 29, 1993
Order1 of then Secretary of Labor and Employment Nieves R. Confesor and her
resolutions dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing
business in the Philippines. The exclusive bargaining agent of the rank and file employees
of the Bank is the Standard Chartered Bank Employees Union (the Union, for brevity).

In August of 1990, the Bank and the Union signed a five-year collective bargaining
agreement (CBA) with a provision to renegotiate the terms thereof on the third year. Prior
to the expiration of the three-year period2 but within the sixty-day freedom period, the
Union initiated the negotiations. On February 18, 1993, the Union, through its President,
Eddie L. Divinagracia, sent a letter3 containing its proposals4 covering political
provisions5 and thirty-four (34) economic provisions.6 Included therein was a list of the
names of the members of the Union’s negotiating panel.7

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H.
Harris, took note of the Union’s proposals. The Bank attached its counter-proposal to the
non-economic provisions proposed by the Union.8 The Bank posited that it would be in a
better position to present its counter-proposals on the economic items after the Union had
presented its justifications for the economic proposals.9 The Bank, likewise, listed the
members of its negotiating panel.10 The parties agreed to set meetings to settle their
differences on the proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested
to the Bank’s Human Resource Manager and head of the negotiating panel, Cielito Diokno,
that the bank lawyers should be excluded from the negotiating team. The Bank
acceded.11 Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the
President of the National Union of Bank Employees (NUBE), the federation to which the
Union was affiliated, be excluded from the Union’s negotiating panel.12 However, Umali
was retained as a member thereof.
On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno
suggested that the negotiation be kept a "family affair." The proposed non-economic
provisions of the CBA were discussed first.13 Even during the final reading of the
non-economic provisions on May 4, 1993, there were still provisions on which the Union
and the Bank could not agree. Temporarily, the notation "DEFERRED" was placed therein.
Towards the end of the meeting, the Union manifested that the same should be changed
to "DEADLOCKED" to indicate that such items remained unresolved. Both parties agreed
to place the notation "DEFERRED/DEADLOCKED."14

On May 18, 1993, the negotiation for economic provisions commenced. A presentation of
the basis of the Union’s economic proposals was made. The next meeting, the Bank
made a similar presentation. Towards the end of the Bank’s presentation, Umali
requested the Bank to validate the Union’s "guestimates," especially the figures for the
rank and file staff.15 In the succeeding meetings, Umali chided the Bank for the
insufficiency of its counter-proposal on the provisions on salary increase, group
hospitalization, death assistance and dental benefits. He reminded the Bank, how the
Union got what it wanted in 1987, and stated that if need be, the Union would go through
the same route to get what it wanted.16

Upon the Bank’s insistence, the parties agreed to tackle the economic package item by
item. Upon the Union’s suggestion, the Bank indicated which provisions it would accept,
reject, retain and agree to discuss.17 The Bank suggested that the Union prioritize its
economic proposals, considering that many of such economic provisions remained
unresolved. The Union, however, demanded that the Bank make a revised itemized
proposal.

In the succeeding meetings, the Union made the following proposals:

Wage Increase:

1st Year – Reduced from 45% to 40%

2nd Year - Retain at 20%

Total = 60%

Group Hospitalization Insurance:

Maximum disability benefit reduced from ₱75,000.00 to ₱60,000.00 per illness annually

Death Assistance:

For the employee – Reduced from ₱50,000.00 to ₱45,000.00

For Immediate Family Member – Reduced from ₱30,000.00 to ₱25,000.00

Dental and all others – No change from the original demand.18

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would
not make the necessary revisions on its counter-proposal, it would be best to seek a third
party assistance.19 After the break, the Bank presented its revised counter-proposal20 as
follows:

Wage Increase : 1st Year – from ₱1,000 to ₱1,050.00

2nd Year – ₱800.00 – no change

Group Hospitalization Insurance

From: ₱35,000.00 per illness

To : ₱35,000.00 per illness per year

Death Assistance – For employee

From: ₱20,000.00

To : ₱25,000.00

Dental Retainer – Original offer remains the same21

The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year - 40%

2nd Year - 19.5%

Group Hospitalization Insurance

From: ₱60,000.00 per year

To : ₱50,000.00 per year

Dental:

Temporary Filling/ – ₱150.00

Tooth Extraction

Permanent Filling – 200.00

Prophylaxis – 250.00
Root Canal – From ₱2,000 per tooth

To: 1,800.00 per tooth

Death Assistance:

For Employees: From ₱45,000.00 to ₱40,000.00

For Immediate Family Member: From ₱25,000.00 to ₱20,000.00.22

The Union’s original proposals, aside from the above-quoted, remained the same.

Another set of counter-offer followed:

Management Union

Wage Increase

1st Year – ₱1,050.00 40%

2nd Year - 850.00 19.0%23

Diokno stated that, in order for the Bank to make a better offer, the Union should clearly
identify what it wanted to be included in the total economic package. Umali replied that it
was impossible to do so because the Bank’s counter-proposal was unacceptable. He
furthered asserted that it would have been easier to bargain if the atmosphere was the
same as before, where both panels trusted each other. Diokno requested the Union panel
to refrain from involving personalities and to instead focus on the negotiations.24 He
suggested that in order to break the impasse, the Union should prioritize the items it
wanted to iron out. Divinagracia stated that the Bank should make the first move and
make a list of items it wanted to be included in the economic package. Except for the
provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the
remaining economic provisions of the CBA. The Union declared a deadlock25 and filed a
Notice of Strike before the National Conciliation and Mediation Board (NCMB) on June 21,
1993, docketed as NCMB-NCR-NS-06-380-93.26

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and
Damages before the Arbitration Branch of the National Labor Relations Commission
(NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June
28, 1993. The Bank alleged that the Union violated its duty to bargain, as it did not bargain
in good faith. It contended that the Union demanded "sky high economic demands,"
indicative of blue-sky bargaining.27 Further, the Union violated its no strike- no lockout
clause by filing a notice of strike before the NCMB. Considering that the filing of notice of
strike was an illegal act, the Union officers should be dismissed. Finally, the Bank alleged
that as a consequence of the illegal act, the Bank suffered nominal and actual damages
and was forced to litigate and hire the services of the lawyer.28
On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor,
pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over
the labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC
was consolidated with the complaint over which the SOLE assumed jurisdiction. After the
parties submitted their respective position papers, the SOLE issued an Order on October
29, 1993, the dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank
Employees Union – NUBE are hereby ordered to execute a collective bargaining
agreement incorporating the dispositions contained herein. The CBA shall be retroactive
to 01 April 1993 and shall remain effective for two years thereafter, or until such time as a
new CBA has superseded it. All provisions in the expired CBA not expressly modified or
not passed upon herein are deemed retained while all new provisions which are being
demanded by either party are deemed denied, but without prejudice to such agreements
as the parties may have arrived at in the meantime.

The Bank’s charge for unfair labor practice which it originally filed with the NLRC as
NLRC-NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is
dismissed for lack of merit. On the other hand, the Union’s charge for unfair labor practice
is similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No.
00-06-04191-93 is pending for his guidance and appropriate action.29

The SOLE gave the following economic awards:

1. Wage Increase:

a) To be incorporated to present salary rates:

Fourth year : 7% of basic monthly salary

Fifth year : 5% of basic monthly salary based on the 4th year adjusted salary

b) Additional fixed amount:

Fourth year : ₱600.00 per month

Fifth year : ₱400.00 per month

2. Group Insurance

a) Hospitalization : ₱45,000.00

b) Life : ₱130,000.00
c) Accident : ₱130,000.00

3. Medicine Allowance

Fourth year : ₱5,500.00

Fifth year : ₱6,000.00

4. Dental Benefits

Provision of dental retainer as proposed by the Bank, but without diminishing existing
benefits

5. Optical Allowance

Fourth year: ₱2,000.00

Fifth year : ₱2,500.00

6. Death Assistance

a) Employee : ₱30,000.00

b) Immediate Family Member : ₱5,000.00

7. Emergency Leave – Five (5) days for each contingency

8. Loans

a) Car Loan : ₱200,000.00

b) Housing Loan : It cannot be denied that the costs attendant to having one’s own home
have tremendously gone up. The need, therefore, to improve on this benefit cannot be
overemphasized. Thus, the management is urged to increase the existing and allowable
housing loan that the Bank extends to its employees to an amount that will give meaning
and substance to this CBA benefit.30

The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that
both parties failed to substantiate their claims. Citing National Labor Union v.
Insular-Yebana Tobacco Corporation,31 the SOLE stated that ULP charges would prosper
only if shown to have directly prejudiced the public interest.

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank
filed a motion for reconsideration. On December 16, 1993, the SOLE issued a Resolution
denying the motions. The Union filed a second motion for reconsideration, which was,
likewise, denied on February 10, 1994.
On March 22, 1994, the Bank and the Union signed the CBA.32 Immediately thereafter, the
wage increase was effected and the signing bonuses based on the increased wage were
distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules of
Procedure alleging as follows:

A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE
UNION’S CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR
EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABOR
PRACTICES CHARGED.33

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON
OTHER UNFAIR LABOR PRACTICES CHARGED.34

C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE
CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF
INJURY TO THE PUBLIC INTEREST WAS PRESENTED.35

The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack
or excess of jurisdiction when it found that the Bank did not commit unfair labor practice
when it interfered with the Union’s choice of negotiator. It argued that, Diokno’s
suggestion that the negotiation be limited as a "family affair" was tantamount to
suggesting that Federation President Jose Umali, Jr. be excluded from the Union’s
negotiating panel. It further argued that contrary to the ruling of the public respondent,
damage or injury to the public interest need not be present in order for unfair labor
practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP
charges arising from the Bank’s surface bargaining. The Union contended that the Bank
merely went through the motions of collective bargaining without the intent to reach an
agreement, and made bad faith proposals when it announced that the parties should
begin from a clean slate. It argued that the Bank opened the political provisions "up for
grabs," which had the effect of diminishing or obliterating the gains that the Union had
made.

The Union also accused the Bank of refusing to disclose material and necessary data,
even after a request was made by the Union to validate its "guestimates."
In its Comment, the Bank prayed that the petition be dismissed as the Union was
estopped, considering that it signed the Collective Bargaining Agreement (CBA) on April
22, 1994. It asserted that contrary to the Union’s allegations, it was the Union that
committed ULP when negotiator Jose Umali, Jr. hurled invectives at the Bank’s head
negotiator, Cielito Diokno, and demanded that she be excluded from the Bank’s
negotiating team. Moreover, the Union engaged in blue-sky bargaining and isolated the
no strike-no lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that
the petition be dismissed. It asserted that the Union failed to prove its ULP charges and
that the public respondent did not commit any grave abuse of discretion in issuing the
assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was
able to substantiate its claim of unfair labor practice against the Bank arising from the
latter’s alleged "interference" with its choice of negotiator; surface bargaining; making bad
faith non-economic proposals; and refusal to furnish the Union with copies of the relevant
data; (b) whether or not the public respondent acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when she issued the assailed order and
resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Court’s Ruling

The petition is bereft of merit.

"Interference" under Article

248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the
selection of the Union’s negotiating panel, when Cielito Diokno, the Bank’s Human
Resource Manager, suggested to the Union’s President Eddie L. Divinagracia that Jose P.
Umali, Jr., President of the NUBE, be excluded from the Union’s negotiating panel. In
support of its claim, Divinagracia executed an affidavit, stating that prior to the
commencement of the negotiation, Diokno approached him and suggested the exclusion
of Umali from the Union’s negotiating panel, and that during the first meeting, Diokno
stated that the negotiation be kept a "family affair."

Citing the cases of U.S. Postal Service36 and Harley Davidson Motor Co., Inc., AMF,37 the
Union claims that interference in the choice of the Union’s bargaining panel is tantamount
to ULP.
In the aforecited cases, the alleged ULP was based on the employer’s violation of Section
8(a)(1) and (5) of the National Labor Relations Act (NLRA),38 which pertain to the
interference, restraint or coercion of the employer in the employees’ exercise of their
rights to self-organization and to bargain collectively through representatives of their own
choosing; and the refusal of the employer to bargain collectively with the employees’
representatives. In both cases, the National Labor Relations Board held that upon the
employer’s refusal to engage in negotiations with the Union for collective-bargaining
contract when the Union includes a person who is not an employee, or one who is a
member or an official of other labororganizations, such employer is engaged in unfair
labor practice under Section 8(a)(1) and (5) of the NLRA.

The Union further cited the case of Insular Life Assurance Co., Ltd. Employees
Association – NATU vs. Insular Life Assurance Co. Ltd.,39 wherein this Court said that the
test of whether an employer has interfered with and coerced employees in the exercise of
their right to self-organization within the meaning of subsection (a)(1) is whether the
employer has engaged in conduct which it may reasonably be said, tends to interfere with
the free exercise of employees’ rights under Section 3 of the Act.40 Further, it is not
necessary that there be direct evidence that any employee was in fact intimidated or
coerced by statements of threats of the employer if there is a reasonable inference that
anti-union conduct of the employer does have an adverse effect on self-organization and
collective bargaining.41

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF

ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the
Philippines is a signatory, "workers and employers, without distinction whatsoever, shall
have the right to establish and, subject only to the rules of the organization concerned, to
job organizations of their own choosing without previous authorization."42

Workers’ and employers’ organizations shall have the right to draw up their constitutions
and rules, to elect their representatives in full freedom to organize their administration and
activities and to formulate their programs.43Article 2 of ILO Convention No. 98 pertaining to
the Right to Organize and Collective Bargaining, provides:

Article 2

1. Workers’ and employers’ organizations shall enjoy adequate protection against any
acts or interference by each other or each other’s agents or members in their
establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers’

organizations under the domination of employers or employers’ organizations or to
support workers’ organizations by financial or other means, with the object of placing such
organizations under the control of employers or employers’ organizations within the
meaning of this Article.
The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article
243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION. – All

persons employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical or educational institutions whether operating for profit or not, shall
have the right to self-organization and to form, join, or assist labor organizations of their
own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as
the 1935 Constitution,44the State had already expressly bestowed protection to labor as
part of the general provisions. The 1973 Constitution,45 on the other hand, declared it as a
policy of the state to afford protection to labor, specifying that the workers’ rights to
self-organization, collective bargaining, security of tenure, and just and humane
conditions of work would be assured. For its part, the 1987 Constitution, aside from
making it a policy to "protect the rights of workers and promote their welfare,"46 devotes an
entire section, emphasizing its mandate to afford protection to labor, and highlights "the
principle of shared responsibility" between workers and employers to promote industrial
peace.47

Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer
interferes, restrains or coerces employees in the exercise of their right to self-organization
or the right to form association. The right to self-organization necessarily includes the right
to collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the

Union to exclude from its panel of negotiators a representative of the Union, and if it can
be inferred that the employer adopted the said act to yield adverse effects on the free
exercise to right to self-organization or on the right to collective bargaining of the
employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is
committed.

In order to show that the employer committed ULP under the Labor Code, substantial
evidence is required to support the claim. Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.48 In the case at bar, the Union bases its claim of interference on the alleged
suggestions of Diokno to exclude Umali from the Union’s negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that
the Bank consciously adopted such act to yield adverse effects on the free exercise of the
right to self-organization and collective bargaining of the employees, especially
considering that such was undertaken previous to the commencement of the negotiation
and simultaneously with Divinagracia’s suggestion that the bank lawyers be excluded
from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the
inclusion of Umali in the Union’s negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock was declared by the Union
on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred
after the arguments and differences over the economic provisions became heated and the
parties had become frustrated. It happened after the parties started to involve
personalities. As the public respondent noted, passions may rise, and as a result,
suggestions given under less adversarial situations may be colored with unintended
meanings.49 Such is what appears to have happened in this case.

The Duty to Bargain

Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the
normal relations and innocent communications, which are all part of the friendly relations
between the Union and Bank.

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under
Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went
through the motions of bargaining without any intent of reaching an agreement, as evident
in the Bank’s counter-proposals. It explained that of the 34 economic provisions it made,
the Bank only made 6 economic counterproposals. Further, as borne by the minutes of the
meetings, the Bank, after indicating the economic provisions it had rejected, accepted,
retained or were open for discussion, refused to make a list of items it agreed to include in
the economic package.

Surface bargaining is defined as "going through the motions of negotiating" without any
legal intent to reach an agreement.50 The resolution of surface bargaining allegations
never presents an easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it involves, at bottom, a
question of the intent of the party in question, and usually such intent can only be inferred
from the totality of the challenged party’s conduct both at and away from the bargaining
table.51 It involves the question of whether an employer’s conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining.52

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank
had any intention of violating its duty to bargain with the Union. Records show that after
the Union sent its proposal to the Bank on February 17, 1993, the latter replied with a list of
its counter-proposals on February 24, 1993. Thereafter, meetings were set for the
settlement of their differences. The minutes of the meetings show that both the Bank and
the Union exchanged economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, both at and away from
the bargaining table, which tend to show that it did not want to reach an agreement with
the Union or to settle the differences between it and the Union. Admittedly, the parties
were not able to agree and reached a deadlock. However, it is herein emphasized that the
duty to bargain "does not compel either party to agree to a proposal or require the making
of a concession."53 Hence, the parties’ failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that
respondents did not refuse to bargain collectively with the complaining union because
they accepted some of the demands while they refused the others even leaving open
other demands for future discussion is correct, especially so when those demands were
discussed at a meeting called by respondents themselves precisely in view of the letter
sent by the union on April 29, 1960…54

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank
made bad-faith provisions has no leg to stand on. The records show that the Bank’s
counterproposals on the non-economic provisions or political provisions did not put "up for
grabs" the entire work of the Union and its predecessors. As can be gleaned from the
Bank’s counterproposal, there were many provisions which it proposed to be retained.
The revisions on the other provisions were made after the parties had come to an
agreement. Far from buttressing the Union’s claim that the Bank made bad-faith
proposals on the non-economic provisions, all these, on the contrary, disprove such
allegations.

We, likewise, find that the Union failed to substantiate its claim that the Bank refused to
furnish the information it needed.

While the refusal to furnish requested information is in itself an unfair labor practice, and
also supports the inference of surface bargaining,55 in the case at bar, Umali, in a meeting
dated May 18, 1993, requested the Bank to validate its guestimates on the data of the rank
and file. However, Umali failed to put his request in writing as provided for in Article 242(c)
of the Labor Code:

Article 242. Rights of Legitimate Labor Organization…

(c) To be furnished by the employer, upon written request, with the annual audited
financial statements, including the balance sheet and the profit and loss statement, within
thirty (30) calendar days from the date of receipt of the request, after the union has been
duly recognized by the employer or certified as the sole and exclusive bargaining
representatives of the employees in the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective bargaining agreement, or during the
collective negotiation;

The Union, did not, as the Labor Code requires, send a written request for the issuance of
a copy of the data about the Bank’s rank and file employees. Moreover, as alleged by the
Union, the fact that the Bank made use of the aforesaid guestimates, amounts to a
validation of the data it had used in its presentation.

No Grave Abuse of Discretion

On the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer
exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction
and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course
of law for the purpose of annulling the proceeding.56 Grave abuse of discretion implies
such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction,
or where the power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility which must be so patent and gross as to amount to an invasion of
positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. Mere abuse of discretion is not enough.57

While it is true that a showing of prejudice to public interest is not a requisite for ULP
charges to prosper, it cannot be said that the public respondent acted in capricious and
whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof.
Neither was it shown that the public respondent exercised its power in an arbitrary and
despotic manner by reason of passion or personal hostility.

Estoppel not Applicable

In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP
when it signed the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person

making it, and cannot be denied or disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is
barred from adopting an inconsistent position, attitude or course of conduct that thereby
causes loss or injury to another.58
In the case, however, the approval of the CBA and the release of signing bonus do not
necessarily mean that the Union waived its ULP claim against the Bank during the past
negotiations. After all, the conclusion of the CBA was included in the order of the SOLE,
while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a
motion for reconsideration respecting its ULP charges against the Bank before the SOLE.

The Union Did Not Engage

In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky
bargaining or making exaggerated or unreasonable proposals.59 The Bank failed to show
that the economic demands made by the Union were exaggerated or unreasonable. The
minutes of the meeting show that the Union based its economic proposals on data of rank
and file employees and the prevailing economic benefits received by bank employees
from other foreign banks doing business in the Philippines and other branches of the Bank
in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion
amounting to lack or excess of jurisdiction when it issued the questioned order and
resolutions. While the approval of the CBA and the release of the signing bonus did not
estop the Union from pursuing its claims of ULP against the Bank, we find the latter did not
engage in ULP. We, likewise, hold that the Union is not guilty of ULP.

IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and
February 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor
are AFFIRMED. The Petition is hereby DISMISSED.

SO ORDERED.
 SECOND DIVISION

[G.R. NO. 146728. February 11, 2004]

GENERAL MILLING CORPORATION, Petitioner, v. HON. COURT

OF APPEALS, GENERAL MILLING CORPORATION
INDEPENDENT LABOR UNION (GMC-ILU), and RITO
MANGUBAT, Respondents.

DECISION

QUISUMBING, J.:

Before us is a Petition for Certiorari assailing the decision1 dated July

19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, which
earlier reversed the decision2 dated January 30, 1998 of the National
Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.

The antecedent facts are as follows: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

In its two plants located at Cebu City and Lapu-Lapu City, petitioner
General Milling Corporation (GMC) employed 190 workers. They were
all members of private respondent General Milling Corporation
Independent Labor Union (union, for brevity), a duly certified
bargaining agent.

On April 28, 1989, GMC and the union concluded a collective

bargaining agreement (CBA) which included the issue of
representation effective for a term of three years. The CBA was
effective for three years retroactive to December 1, 1988. Hence, it
would expire on November 30, 1991.

On November 29, 1991, a day before the expiration of the CBA, the
union sent GMC a proposed CBA, with a request that a
counter-proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and

individual letters from workers who stated that they had withdrawn
from their union membership, on grounds of religious affiliation and
personal differences. Believing that the union no longer had standing
to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the unions officers, Rito
Mangubat and Victor Lastimoso. The letter stated that it felt there was
no basis to negotiate with a union which no longer existed, but that
management was nonetheless always willing to dialogue with them on
matters of common concern and was open to suggestions on how the
company may improve its operations.

In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union
and submitted a manifesto, signed by its members, stating that they
had not withdrawn from the union.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union

member, on the ground of incompetence. The union protested and
requested GMC to submit the matter to the grievance procedure
provided in the CBA. GMC, however, advised the union to refer to our
letter dated December 16, 1991.3 ςrνll

Thus, the union filed, on July 2, 1992, a complaint against GMC with
the NLRC, Arbitration Division, Cebu City. The complaint alleged
unfair labor practice on the part of GMC for: (1) refusal to bargain
collectively; (2) interference with the right to self-organization; and (3)
discrimination. The labor arbiter dismissed the case with the
recommendation that a petition for certification election be held to
determine if the union still enjoyed the support of the workers.

The union appealed to the NLRC.

On January 30, 1998, the NLRC set aside the labor arbiters decision.
Citing Article 253-A of the Labor Code, as amended by Rep. Act No.
6715,4 which fixed the terms of a collective bargaining agreement, the
NLRC ordered GMC to abide by the CBA draft that the union proposed
for a period of two (2) years beginning December 1, 1991, the date
when the original CBA ended, to November 30, 1993. The NLRC also
ordered GMC to pay the attorneys fees.5 ςrνll

In its decision, the NLRC pointed out that upon the effectivity of Rep.
Act No. 6715, the duration of a CBA, insofar as the representation
aspect is concerned, is five (5) years which, in the case of
GMC-Independent Labor Union was from December 1, 1988 to
November 30, 1993. All other provisions of the CBA are to be
renegotiated not later than three (3) years after its execution. Thus,
the NLRC held that respondent union remained as the exclusive
bargaining agent with the right to renegotiate the economic
provisions of the CBA. Consequently, it was unfair labor practice for
GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from
the union submitted by 13 of its members from February to June 1993
confirmed the pressure exerted by GMC on its employees to resign
from the union. Thus, the NLRC also found GMC guilty of unfair labor
practice for interfering with the right of its employees to
self-organization.

With respect to the unions claim of discrimination, the NLRC found the
claim unsupported by substantial evidence.

On GMCs motion for reconsideration, the NLRC set aside its decision
of January 30, 1998, through a resolution dated October 6, 1998. It
found GMCs doubts as to the status of the union justified and the
allegation of coercion exerted by GMC on the unions members to
resign unfounded. Hence, the union filed a Petition
for Certiorari before the Court of Appeals. For failure of the union to
attach the required copies of pleadings and other documents and
material portions of the record to support the allegations in its petition,
the CA dismissed the petition on February 9, 1999. The same petition
was subsequently filed by the union, this time with the necessary
documents. In its resolution dated April 26, 1999, the appellate court
treated the refiled petition as a motion for reconsideration and gave
the petition due course.

On July 19, 2000, the appellate court rendered a decision the

dispositive portion of which reads: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution

of October 6, 1998 is hereby SET ASIDE, and its decision of January
30, 1998 is, except with respect to the award of attorneys fees which
is hereby deleted, REINSTATED.6 ςrνll

A motion for reconsideration was seasonably filed by GMC, but in a

resolution dated October 26, 2000, the CA denied it for lack of merit.

Hence, the instant Petition for Certiorarialleging that:

THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL

RULE THAT NO DECISION SHALL BE RENDERED BY ANY COURT
WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE
FACTS AND THE LAW ON WHICH IT IS BASED.

II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS
COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL
ERROR OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION.

III

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT

APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO
DETERMINE THE TERMS AND CONDITIONS OF A COLLECTIVE
BARGAINING AGREEMENT.7 ςrνll

Thus, in the instant case, the principal issue for our determination is
whether or not the Court of Appeals acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in (1) finding
GMC guilty of unfair labor practice for violating the duty to bargain
collectively and/or interfering with the right of its employees to
self-organization, and (2) imposing upon GMC the draft CBA proposed
by the union for two years to begin from the expiration of the original
CBA.

On the first issue, Article 253-A of the Labor Code, as amended by Rep.
Act No. 6715, states: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

ART. 253-A. Terms of a collective bargaining agreement. Any

Collective Bargaining Agreement that the parties may enter into shall,
insofar as the representation aspect is concerned, be for a term of five
(5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and
Employment outside of the sixty-day period immediately before the
date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after
its execution....

The law mandates that the representation provision of a CBA should

last for five years. The relation between labor and management
should be undisturbed until the last 60 days of the fifth year. Hence, it
is indisputable that when the union requested for a renegotiation of
the economic terms of the CBA on November 29, 1991, it was still the
certified collective bargaining agent of the workers, because it was
seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The unions proposal was
also submitted within the prescribed 3-year period from the date of
effectivity of the CBA, albeit just before the last day of said period. It
was obvious that GMC had no valid reason to refuse to negotiate in
good faith with the union.For refusing to send a counter-proposal to
the union and to bargain anew on the economic terms of the CBA, the
company committed an unfair labor practice under Article 248 of the
Labor Code, which provides that: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

ART. 248. Unfair labor practices of employers . It shall be

unlawful for an employer to commit any of the following unfair labor
practice: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

.. .

(g) To violate the duty to bargain collectively as prescribed by this

Code; chanroblesvirtuallawlibrary

.. .

Article 252 of the Labor Code elucidates the meaning of the phrase
duty to bargain collectively, thus: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

ART. 252. Meaning of duty to bargain collectively. The duty to

bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement....

We have held that the crucial question whether or not a party has met
his statutory duty to bargain in good faith typically turn$ on the facts
of the individual case.8 There is no per se test of good faith in
bargaining.9 Good faith or bad faith is an inference to be drawn from
the facts.10 The effect of an employers or a unions actions individually
is not the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole.11 ςrνll

Under Article 252 abovecited, both parties are required to perform

their mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an
agreement. The union lived up to this obligation when it presented
proposals for a new CBA to GMC within three (3) years from the
effectivity of the original CBA. But GMC failed in its duty under Article
252. What it did was to devise a flimsy excuse, by questioning the
existence of the union and the status of its membership to prevent
any negotiation.
It bears stressing that the procedure in collective bargaining
prescribed by the Code is mandatory because of the basic interest of
the state in ensuring lasting industrial peace. Thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

ART. 250. Procedure in collective bargaining. The following

procedures shall be observed in collective bargaining: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

(a) When a party desires to negotiate an agreement, it shall serve a

written notice upon the other party with a statement of its proposals.
The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice. (Underscoring supplied) ςrαlαωlιbrαrÿ

GMCs failure to make a timely reply to the proposals presented by the

union is indicative of its utter lack of interest in bargaining with the
union. Its excuse that it felt the union no longer represented the
workers, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMCs refusal to make a counter-proposal to the unions

proposal for CBA negotiation is an indication of its bad faith. Where
the employer did not even bother to submit an answer to the
bargaining proposals of the union, there is a clear evasion of the duty
to bargain collectively.12
ςrνll

Failing to comply with the mandatory obligation to submit a reply to

the unions proposals, GMC violated its duty to bargain collectively,
making it liable for unfair labor practice. Perforce, the Court of
Appeals did not commit grave abuse of discretion amounting to lack or
excess of jurisdiction in finding that GMC is, under the circumstances,
guilty of unfair labor practice.

Did GMC interfere with the employees right to self-organization? The

CA found that the letters between February to June 1993 by 13 union
members signifying their resignation from the union clearly indicated
that GMC exerted pressure on its employees. The records show that
GMC presented these letters to prove that the union no longer
enjoyed the support of the workers. The fact that the resignations of
the union members occurred during the pendency of the case before
the labor arbiter shows GMCs desperate attempts to cast doubt on the
legitimate status of the union. We agree with the CAs conclusion that
the ill-timed letters of resignation from the union members indicate
that GMC had interfered with the right of its employees to
self-organization. Thus, we hold that the appellate court did not
commit grave abuse of discretion in finding GMC guilty of unfair labor
practice for interfering with the right of its employees to
self-organization.
Finally, did the CA gravely abuse its discretion when it imposed on
GMC the draft CBA proposed by the union for two years commencing
from the expiration of the original CBA? chanroblesvirtualawlibrary

The Code provides: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

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

collective bargaining agreement.. ...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 agreementduring the 60-day
period [prior to its expiration date] and/or until a new agreement is
reached by the parties. (Underscoring supplied) ςrαlαωlιbrαrÿ

The provision mandates the parties to keep the status quo while they
are still in the process of working out their respective proposal and
counter proposal. The general rule is that when a CBA already exists,
its provision shall continue to govern the relationship between the
parties, until a new one is agreed upon. The rule necessarily
presupposes that all other things are equal. That is, that neither party
is guilty of bad faith. However, when one of the parties abuses this
grace period by purposely delaying the bargaining process, a
departure from the general rule is warranted.

In Kiok Loy v. NLRC,13 we found that petitioner therein, Sweden Ice

Cream Plant, refused to submit any counter proposal to the CBA
proposed by its employees certified bargaining agent. We ruled that
the former had thereby lost its right to bargain the terms and
conditions of the CBA. Thus, we did not hesitate to impose on the
erring company the CBA proposed by its employees union - lock, stock
and barrel. Our findings in Kiok Loy are similar to the facts in the
present case, to wit: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

petitioner Companys approach and attitude stalling the negotiation by

a series of postponements, non-appearance at the hearing conducted,
and undue delay in submitting its financial statements, lead to no
other conclusion except that it is unwilling to negotiate and reach an
agreement with the Union. Petitioner has not at any instance, evinced
good faith or willingness to discuss freely and fully the claims and
demands set forth by the Union much less justify its objection
thereto.14ςrνll

Likewise, in Divine Word University of Tacloban v. Secretary of Labor

and Employment,15 petitioner therein, Divine Word University of
Tacloban, refused to perform its duty to bargain collectively. Thus, we
upheld the unilateral imposition on the university of the CBA proposed
by the Divine Word University Employees Union. We said further: ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

That being the said case, the petitioner may not validly assert that its
consent should be a primordial consideration in the bargaining
process. By its acts, no less than its action which bespeak its
insincerity, it has forfeited whatever rights it could have asserted as
an employer.16 ςrνll

Applying the principle in the foregoing cases to the instant case, it

would be unfair to the union and its members if the terms and
conditions contained in the old CBA would continue to be imposed on
GMCs employees for the remaining two (2) years of the CBAs duration.
We are not inclined to gratify GMC with an extended term of the old
CBA after it resorted to delaying tactics to prevent negotiations. Since
it was GMC which violated the duty to bargain collectively, based
on Kiok Loy and Divine Word University of Tacloban, it had lost its
statutory right to negotiate or renegotiate the terms and conditions of
the draft CBA proposed by the union.

We carefully note, however, that as strictly distinguished from the

facts of this case, there was no pre-existing CBA between the parties
in Kiok Loy and Divine Word University of Tacloban. Nonetheless, we
deem it proper to apply in this case the rationale of the doctrine in the
said two cases. To rule otherwise would be to allow GMC to have its
cake and eat it too.

Under ordinary circumstances, it is not obligatory upon either side of

a labor controversy to precipitately accept or agree to the proposals of
the other. But an erring party should not be allowed to resort with
impunity to schemes feigning negotiations by going through empty
gestures.17 Thus, by imposing on GMC the provisions of the draft CBA
proposed by the union, in our view, the interests of equity and fair
play were properly served and both parties regained equal footing,
which was lost when GMC thwarted the negotiations for new economic
terms of the CBA.

The findings of fact by the CA, affirming those of the NLRC as to the
reasonableness of the draft CBA proposed by the union should not be
disturbed since they are supported by substantial evidence. On this
score, we see no cogent reason to rule otherwise. Hence, we hold that
the Court of Appeals did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction when it imposed on GMC,
after it had committed unfair labor practice, the draft CBA proposed
by the union for the remaining two (2) years of the duration of the
original CBA. Fairness, equity, and social justice are best served in
this case by sustaining the appellate courts decision on this issue.

WHEREFORE, the petition is DISMISSED and the assailed decision

dated July 19, 2000, and the resolution dated October 26, 2000, of the
Court of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs
against petitioner.

SO ORDERED.
G.R. No. 149440 January 28, 2003

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and

CRISTINE SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL
TRADE, respondents.

PANGANIBAN, J.:

Although the employers have shown that respondents performed work that was seasonal
in nature, they failed to prove that the latter worked only for the duration of one particular
season. In fact, petitioners do not deny that these workers have served them for several
years already. Hence, they are regular — not seasonal — employees.

The Case

Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to
set aside the February 20, 2001 Decision of the Court of Appeals 1 (CA) in CA-GR SP No.
51033. The dispositive part of the Decision reads:

"WHEREFORE, premises considered, the instant special civil action for certiorari is
hereby DENIED." 2

On the other hand, the National Labor Relations Commission (NLRC) Decision, 3 upheld
by the CA, disposed in this wise:

"WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET
ASIDE and VACATED and a new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except
Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position
and to pay full backwages from September 1991 until reinstated. Respondents being guilty
of unfair labor practice are further ordered to pay complainant union the sum of P10,000.00
as moral damages and P5,000.00 as exemplary damages." 4

The Facts

The facts are summarized in the NLRC Decision as follows:

"Contrary to the findings of the Labor Arbiter that complainants [herein respondents]
refused to work and/or were choosy in the kind of jobs they wanted to perform, the records
is replete with complainants' persistence and dogged determination in going back to work.

"Indeed, it would appear that respondents did not look with favor workers' having
organized themselves into a union. Thus, when complainant union was certified as the
collective bargaining representative in the certification elections, respondents under the
pretext that the result was on appeal, refused to sit down with the union for the purpose of
entering into a collective bargaining agreement. Moreover, the workers including
complainants herein were not given work for more than one month. In protest,
complainants staged a strike which was however settled upon the signing of a
Memorandum of Agreement which stipulated among others that:

'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and
will endeavor to conclude the same within thirty (30) days.

'b) The management will give priority to the women workers who are members of the
union in case work relative . . . or amount[ing] to gahit and [dipol] arises.

'c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a
week.

'd) The management will provide fifteen (15) wagons for the workers and that existing
workforce prior to the actual strike will be given priority. However, in case the said
workforce would not be enough, the management can hire additional workers to
supplement them.

'e) The management will not anymore allow the scabs, numbering about eighteen (18)
workers[,] to work in the hacienda; and

'f) The union will immediately lift the picket upon signing of this agreement.'

"However, alleging that complainants failed to load the fifteen wagons, respondents
reneged on its commitment to sit down and bargain collectively. Instead, respondent
employed all means including the use of private armed guards to prevent the organizers
from entering the premises.

"Moreover, starting September 1991, respondents did not any more give work
assignments to the complainants forcing the union to stage a strike on January 2, 1992.
But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was
signed by the complainants and respondents which provides:

'Whereas the union staged a strike against management on January 2, 1992 grounded on
the dismissal of the union officials and members;

'Whereas parties to the present dispute agree to settle the case amicably once and for all;

'Now therefore, in the interest of both labor and management, parties herein agree as
follows:

'1. That the list of the names of affected union members hereto attached and made part of
this agreement shall be referred to the Hacienda payroll of 1990 and determine whether or
not this concerned Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the
subjects of a Memorandum of Agreement entered into by and between the parties last
January 4, 1990;

'3. That herein parties can use other employment references in support of their respective
claims whether or not any or all of the listed 36 union members are employees or
hacienda workers or not as the case may be;

'4. That in case conflict or disagreement arises in the determination of the status of the
particular hacienda workers subject of this agreement herein parties further agree to
submit the same to voluntary arbitration;

'5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to
be composed of three representatives each and is given five working days starting Jan. 23,
1992 to resolve the status of the subject 36 hacienda workers. (Union representatives:
Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)"

"Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation
Meeting showed as follows:

'The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko
based on who received their 13th month pay. The following are deemed not considered
employees:

1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva

'The name Orencio Rombo shall be verified in the 1990 payroll.

'The following employees shall be reinstated immediately upon availability of work:

1. Jose Dagle 7. Alejandro Tejares

2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr.
4. Jesus Silva 10. Cresensio Abrega
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.'

"When respondents again reneged on its commitment; complainants filed the present
complaint.
"But for all their persistence, the risk they had to undergo in conducting a strike in the face
of overwhelming odds, complainants in an ironic twist of fate now find themselves being
accused of 'refusing to work and being choosy in the kind of work they have to
perform'." 5 (Citations omitted)

Ruling of the Court of Appeals

The CA affirmed that while the work of respondents was seasonal in nature, they were
considered to be merely on leave during the off-season and were therefore still employed
by petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon
this right was deemed by the CA to be tantamount to illegal dismissal.

The appellate court found neither "rhyme nor reason in petitioner's argument that it was
the workers themselves who refused to or were choosy in their work." As found by the
NLRC, the record of this case is "replete with complainants' persistence and dogged
determination in going back to work." 6

The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair
labor practice.

Hence this Petition. 7

Issues

Petitioners raise the following issues for the Court's consideration:

"A. Whether or not the Court of Appeals erred in holding that respondents, admittedly
seasonal workers, were regular employees, contrary to the clear provisions of Article 280
of the Labor Code, which categorically state that seasonal employees are not covered by
the definition of regular employees under paragraph 1, nor covered under paragraph 2
which refers exclusively to casual employees who have served for at least one year.

"B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, . . . and
relying instead on rulings which are not directly applicable to the case at bench, viz,
Philippine Tobacco, Bacolod-Murcia, and Gaco, . . .

"C Whether or not the Court of Appeals committed grave abuse of discretion in upholding
the NLRC's conclusion that private respondents were illegally dismissed, that petitioner[s
were] guilty of unfair labor practice, and that the union be awarded moral and exemplary
damages." 8

Consistent with the discussion in petitioners' Memorandum, we shall take up Items A and
B as the first issue and Item C as the second.

The Court's Ruling

The Petition has no merit.

First Issue:

Regular Employment

At the outset, we must stress that only errors of law are generally reviewed by this Court in
petitions for review on certiorari of CA decisions. 9 Questions of fact are not
entertained. 10 The Court is not a trier of facts and, in labor cases, this doctrine applies with
greater force. 11 Factual questions are for labor tribunals to resolve. 12 In the present case,
these have already been threshed out by the NLRC. Its findings were affirmed by the
appellate court.

Contrary to petitioners' contention, the CA did not err when it held that respondents were
regular employees.

Article 280 of the Labor Code, as amended, states:

"Art. 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.

"An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such activity exist." (Italics supplied)

For respondents to be excluded from those classified as regular employees, it is not

enough that they perform work or services that are seasonal in nature. They must have
also been employed only for the duration of one season. The evidence proves the
existence of the first, but not of the second, condition. The fact that respondents — with
the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva —
repeatedly worked as sugarcane workers for petitioners for several years is not denied by
the latter. Evidently, petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.

In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification:
"[T]he test of whether or not an employee is a regular employee has been laid down in De
Leon v. NLRC, in which this Court held:

"The primary standard, therefore, of determining regular employment is the reasonable

connection between the particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual trade or business of the employer. The connection can
be determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also if the employee has been
performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity and
while such activity exists.

xxx xxx xxx

". . . [T]he fact that [respondents] do not work continuously for one whole year but only for
the duration of the . . . season does not detract from considering them in regular
employment since in a litany of cases this Court has already settled that seasonal workers
who are called to work from time to time and are temporarily laid off during off-season are
not separated from service in said period, but merely considered on leave until
re-employed." 14

The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case at
bar. In the earlier case, the workers were required to perform phases of agricultural work
for a definite period of time, after which their services would be available to any other farm
owner. They were not hired regularly and repeatedly for the same phase/s of agricultural
work, but on and off for any single phase thereof. On the other hand, herein respondents,
having performed the same tasks for petitioners every season for several years, are
considered the latter's regular employees for their respective tasks. Petitioners' eventual
refusal to use their services — even if they were ready, able and willing to perform their
usual duties whenever these were available — and hiring of other workers to perform the
tasks originally assigned to respondents amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their
valid exercise of a management prerogative. The sudden changes in work assignments
reeked of bad faith. These changes were implemented immediately after respondents had
organized themselves into a union and started demanding collective bargaining. Those
who were union members were effectively deprived of their jobs. Petitioners' move
actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.

"Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden is on
the employer to prove that the termination was for a valid and authorized cause." 16 In the
case at bar, petitioners failed to prove any such cause for the dismissal of respondents
who, as discussed above, are regular employees.

Second Issue:

Unfair Labor Practice

The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:

"Indeed, from respondents' refusal to bargain, to their acts of economic inducements

resulting in the promotion of those who withdrew from the union, the use of armed guards
to prevent the organizers to come in, and the dismissal of union officials and members,
one cannot but conclude that respondents did not want a union in their hacienda—a clear
interference in the right of the workers to self-organization." 17

We uphold the CA's affirmation of the above findings. Indeed, factual findings of labor
officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. Their findings are
binding on the Supreme Court. 18 Verily, their conclusions are accorded great weight upon
appeal, especially when supported by substantial evidence. 19 Consequently, the Court is
not duty-bound to delve into the accuracy of their factual findings, in the absence of a
clear showing that these were arbitrary and bereft of any rational basis." 20

The finding of unfair labor practice done in bad faith carries with it the sanction of moral
and exemplary damages." 21

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.

SO ORDERED.
G.R. No. 167892 October 27, 2006

ST. JOHN COLLEGES, INC., petitioner,

vs.
ST. JOHN ACADEMY FACULTY AND EMPLOYEES UNION, respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the April 22, 2004 Decision1 of the Court of
Appeals in CA-G.R. SP No. 74519, which affirmed with modifications the June 28, 2002
Resolution2 of the National Labor Relations Commission (NLRC) in NLRC CN RAB IV
5-10035-98-1, and its April 15, 2005 Resolution3 denying petitioner’s motion for
reconsideration.

Petitioner St. John Colleges, Inc. (SJCI) is a domestic corporation which owns and
operates the St. John’s Academy (later renamed St. John Colleges) in Calamba, Laguna.
Prior to 1998, the Academy offered a secondary course only. The high school then
employed about 80 teaching and non-teaching personnel who were members of the St.
John Academy Faculty & Employees Union (Union).

The Collective Bargaining Agreement (CBA) between SJCI and the Union was set to
expire on May 31, 1997. During the ensuing collective bargaining negotiations, SJCI
rejected all the proposals of the Union for an increase in worker’s benefits. This resulted to
a bargaining deadlock which led to the holding of a valid strike by the Union on November
10, 1997. In order to end the strike, on November 27, 1997, SJCI and the Union, through
the efforts of the National Conciliation and Mediation Board (NCMB), agreed to refer the
labor dispute to the Secretary of Labor and Employment (SOLE) for assumption of
jurisdiction:

AGREEMENT AND JOINT PETITION FOR ASSUMPTION OF JURISDICTION

Both parties agree as follows:

1. That the issue raised by the Union shall be referred to the Honorable Secretary of Labor
by way of Assumption of Jurisdiction. Note this will serve as a joint petition for Assumption
of Jurisdiction.

2. Parties shall submit their respective position paper within 10 days upon the signing of
this agreement and to be decided within two months.
3. That management shall grant the employees cash advance of P1,800.00 each to be
given on or before December 5, 1997 deductible after two months payable in two
installments starting January 31, 1998. The decision re: assumption [of] jurisdiction has not
been resolved.

4. Union shall lift the picket immediately and remove all obstruction and return to work on
Monday, December 1, 1997.

5. No retaliatory action shall be undertaken by either party against each other in relation to
the strike.4

After which, the strike ended and classes resumed. Subsequently, the SOLE issued an
Order dated January 19, 1998 assuming jurisdiction over the labor dispute pursuant to
Article 263 of the Labor Code. The parties were required to submit their respective position
papers within ten (10) days from receipt of said Order.

Pending resolution of the labor dispute before the SOLE, the Board of Directors of SJCI
approved on February 22, 1998 a resolution recommending the closure of the high school
which was approved by the stockholders on even date. The Minutes5 of the stockholders’
meeting stated the reasons therefor, to wit:

98-3 CLOSURE OF THE SCHOOL

The President, Mr. Rivera, informed the stockholders that the Board at its meeting on
February 15, 1998 unanimously approved to recommend to the stockholders the closure of
the school because of the irreconcilable differences between the school management and
the Academy’s Union particularly the safety of our students and the financial aspect of the
ongoing CBA negotiations.

After due deliberations, and upon motion of Dr. Jose O. Juliano seconded by Miss Eva
Escalano, it was unanimously resolved, as it is hereby resolved, that the Board of St. John
Colleges, Inc. be authorized to decide on the terms and conditions of closure, if such
decision is made, to the best interest of the stockholders, parents and students.6

Thereafter, SJCI informed the Department of Labor and Employment (DOLE),

Department of Education, Culture and Sports (DECS), parents, students and the Union of
the impending closure of the high school which took effect on March 31, 1998.

Subsequently, some teaching and non-teaching personnel of the high school agreed to
the closure. On April 2, 1998, SJCI informed the DOLE that as of March 31, 1998, 51
employees had received their separation compensation package while 25 employees
refused to accept the same.
On May 4, 1998, the aforementioned 25 employees conducted a protest action within the
perimeter of the high school. The Union filed a notice of strike with the NCMB only on May
7, 1998.

On May 19, 1998, SJCI filed a petition to declare the strike illegal before the NLRC which
was docketed as NLRC Case No. RAB-IV-5-10035-98-L. It claimed that the strike was
conducted in violation of the procedural requirements for holding a valid strike under the
Labor Code.

On May 21, 1998, the 25 employees filed a complaint for unfair labor practice (ULP), illegal
dismissal and non-payment of monetary benefits against SJCI before the NLRC which
was docketed as RAB-IV-5-10039-98-L. The Union members alleged that the closure of
the high school was done in bad faith in order to get rid of the Union and render useless
any decision of the SOLE on the CBA deadlocked issues.

These two cases were then consolidated. On January 8, 1999, Labor Arbiter Antonio R.
Macam rendered a Decision7 dismissing the Union’s complaint for ULP and illegal
dismissal while granting SJCI’s petition to declare the strike illegal coupled with a
declaration of loss of employment status of the 25 Union members involved in the strike.

Meanwhile, in the proceedings before the SOLE, the Union filed a manifestation8 to
maintain the status quo on March 30, 1998 praying that SJCI be enjoined from closing the
high school. It claimed that the decision of SJCI to close the high school violated the
SOLE’s assumption order and the agreement of the parties not to take any retaliatory
action against the other. For its part, SJCI filed a motion to dismiss with entry of
appearance9 on October 14, 1998 claiming that the closure of the high school rendered the
CBA deadlocked issues moot. Upon receipt of the Labor Arbiter’s decision in the aforesaid
consolidated cases, SJCI filed a second motion to dismiss10 on February 1, 1999 arguing
that the case had already been resolved.

Moreover, after the favorable decision of the Labor Arbiter, SJCI resolved to reopen the
high school for school year 1999-2000. However, it did not restore the high school teaching
and non-teaching employees it earlier terminated. That same school year SJCI opened an
elementary and college department.

On July 23, 1999, the SOLE denied SJCI’s motions to dismiss and certified the CBA
deadlock case to the NLRC. It ordered the consolidation of the CBA deadlock case with
the ULP, illegal dismissal, and illegal strike cases which were then pending appeal before
the NLRC.

On June 28, 2002, the NLRC rendered judgment reversing the decision of the Labor
Arbiter. It found SJCI guilty of ULP and illegal dismissal and ordered it to reinstate the 25
employees to their former positions without loss of seniority rights and other benefits, and
with full backwages. It also required SJCI to pay moral and exemplary damages,
attorney’s fees, and two (2) months summer/vacation pay. Moreover, it ruled that the
mass actions conducted by the 25 employees on May 4, 1998 could not be considered as
a strike since, by then, the employer-employee relationship had already been terminated
due to the closure of the high school. Finally, it dismissed, without prejudice, the certified
case on the CBA deadlocked issues for failure of the parties to substantiate their
respective positions.

On appeal, the Court of Appeals, in its Decision dated April 22, 2004, affirmed with
modification the decision of the NLRC:

WHEREFORE, in light of the preceding discussions, the decision subject of the instant
petition is hereby affirmed with a modification that in the computation of backwages, the
two month unworked summer vacation should excluded.

SO ORDERED.11

With the denial of its motion for reconsideration, SJCI interposed the instant petition
essentially raising two issues: (1) whether it is liable for ULP and illegal dismissal when it
closed down the high school on March 31, 1998 and (2) whether the Union is liable for
illegal strike due to the protest actions which its 25 members undertook within the high
school’s perimeter on May 4, 1998.

The petition lacks merit.

Under Article 283 of the Labor Code, the following requisites must concur for a valid
closure of the business: (1) serving a written notice on the workers at least one (1) month
before the intended date thereof; (2) serving a notice with the DOLE one month before the
taking effect of the closure; (3) payment of separation pay equivalent to one (1) month or
at least one half (1/2) month pay for every year of service, whichever is higher, with a
fraction of at least six (6) months to be considered as a whole year; and (4) cessation of
the operation must be bona fide.12 It is not disputed that the first two requisites were
satisfied. The third requisite would have been satisfied were it not for the refusal of the
herein private respondents to accept the separation compensation package. The instant
case, thus, revolves around the fourth requisite, i.e., whether SJCI closed the high school
in good faith.

Whether or not the closure of the high school was done in good faith is a question of fact
and is not reviewable by this Court in a petition for review on certiorari save for
exceptional circumstances. In fine, the finding of the NLRC, which was affirmed by the
Court of Appeals, that SJCI closed the high school in bad faith is supported by substantial
evidence and is, thus, binding on this Court. Consequently, SJCI is liable for ULP and
illegal dismissal.

The determination of whether SJCI acted in bad faith depends on the particular facts as
established by the evidence on record. Bad faith is, after all, an inference which must be
drawn from the peculiar circumstances of a case. The two decisive factors in determining
whether SJCI acted in bad faith are (1) the timing of, and reasons for the closure of the
high school, and (2) the timing of, and the reasons for the subsequent opening of a college
and elementary department, and, ultimately, the reopening of the high school department
by SJCI after only one year from its closure.

Prior to the closure of the high school by SJCI, the parties agreed to refer the 1997 CBA
deadlock to the SOLE for assumption of jurisdiction under Article 263 of the Labor Code.
As a result, the strike ended and classes resumed. After the SOLE assumed jurisdiction, it
required the parties to submit their respective position papers. However, instead of filing
its position paper, SJCI closed its high school, allegedly because of the "irreconcilable
differences between the school management and the Academy’s Union particularly the
safety of our students and the financial aspect of the ongoing CBA negotiations."
Thereafter, SJCI moved to dismiss the pending labor dispute with the SOLE contending
that it had become moot because of the closure. Nevertheless, a year after said closure,
SJCI reopened its high school and did not rehire the previously terminated employees.

Under these circumstances, it is not difficult to discern that the closure was done to defeat
the parties’ agreement to refer the labor dispute to the SOLE; to unilaterally end the
bargaining deadlock; to render nugatory any decision of the SOLE; and to circumvent the
Union’s right to collective bargaining and its members’ right to security of tenure. By
admitting that the closure was due to irreconcilable differences between the Union and
school management, specifically, the financial aspect of the ongoing CBA negotiations,
SJCI in effect admitted that it wanted to end the bargaining deadlock and eliminate the
problem of dealing with the demands of the Union. This is precisely what the Labor
Code abhors and punishes as unfair labor practice since the net effect is to defeat
the Union’s right to collective bargaining.

However, SJCI contends that these circumstances do not establish its bad faith in closing
down the high school. Rather, it claims that it was forced to close down the high school
due to alleged difficult labor problems that it encountered while dealing with the Union
since 1995, specifically, the Union’s illegal demands in violation of R.A. 6728 or the
"Government Assistance to Students and Teachers in Private Education Act." Under R.A.
6728, the income from tuition fee increase is to be used as follows: (a) 70% of the tuition
fee shall go to the payment of salaries, wages, allowances, and other benefits of teaching
and non-teaching personnel, and (b) 20% of the tuition fee increase shall go to the
improvement or modernization of the buildings, equipment, and other facilities as well as
payment of the cost of operations. However, sometime in 1995, SJCI claims that it was
forced to give-in to the demands of the Union by allocating 100% of the tuition fee increase
for teachers’ benefits even though the same was in violation of R.A. 6728 in order to end
the on-going strike of the Union and avoid prolonged disturbances of classes.
Subsequently or during the school year 1996-1997, SJCI claims that it obtained an
approval from the DECS for a 30% tuition fee increase, however, only 10% was
implemented. Despite this, the Union persisted in making illegal demands by filing a
complaint before the DOLE claiming that they were entitled to the unimplemented 20%
tuition fee increase. Finally, during the collective bargaining negotiations in 1997, the
Union again made economic demands in excess of the 70% of the tuition fee increase
under R.A. 6728. As a result, SJCI claims it had no choice but to refuse the Union’s
demands which thereafter led to the holding of a strike on November 10, 1998. It argues
that the Union’s alleged illegal demands was a valid justification for the closure of the high
school considering that it was financially incapable of meeting said demands and that it
would violate R.A. 6728 if it gave in to said demands which carried corresponding
penalties to be imposed by the DECS.

We are not persuaded.

These alleged difficult labor problems merely show that SJCI and the Union had
disagreements regarding workers’ benefits which is normal in any business establishment.
That SJCI agreed to appropriate 100% of the tuition fee increase to the workers’ benefits
sometime in 1995 does not mean that it was helpless in the face of the Union’s demands
because neither party is obligated to precipitately give in to the proposal of the other party
during collective bargaining.13 If SJCI found the Union’s demands excessive, its remedy
under the law is to refer the matter for voluntary or compulsory dispute resolution. Besides,
this incident which occurred in 1995, could hardly establish the good faith of SJCI or justify
the high school’s closure in 1998.

Anent the Union’s claim for the unimplemented 20% tuition fee increase in 1996, suffice it
to say that it is erroneous to rule on said issue since the same was submitted before the
Voluntary Arbitrator14 and is not on appeal before this Court.15 Besides, by referring the
labor dispute to the Voluntary Arbitrator, the parties themselves acknowledged that there
is a sufficient mechanism to resolve the said dispute. Again, we fail to see how this
alleged labor problem in 1996 shows the good faith of SJCI in closing the high school in
1998.

With respect to SJCI’s claim that during the 1997 CBA negotiations the Union made illegal
demands because they exceeded the 70% limitation set by R.A. No. 6728, it is important to
note that the alleged illegality or excessiveness of the Union’s demands were the issues
to be resolved by the SOLE after the parties agreed to refer the said labor dispute to the
latter for assumption of jurisdiction. As previously mentioned, the SOLE certified the case
to the NLRC, which on June 28, 2002, rendered a decision finding that there
was insufficient evidence to determine the reasonableness of the Union’s proposals.
The NLRC found that SJCI failed to establish that the Union’s demands were illegal or
excessive. A review of the records clearly shows that the Union submitted a position
paper detailing its demands in actual monetary terms. However, SJCI failed to establish
how and why these demands were in excess of the limitation set by R.A. 6728. Up to this
point in the proceedings, it has merely relied on its self-serving statements that the
Union’s demands were illegal and excessive. There is no basis, therefore, to hold that the
Union ever made illegal or excessive demands.

At any rate, even assuming that the Union’s demands were illegal or excessive, the
important and crucial point is that these alleged illegal or excessive demands did not
justify the closure of the high school and do not, in any way, establish SJCI’s good faith.
The employer cannot unilaterally close its establishment on the pretext that the demands
of its employees are excessive. As already discussed, neither party is obliged to give-in to
the other’s excessive or unreasonable demands during collective bargaining, and the
remedy in such case is to refer the dispute to the proper tribunal for resolution. This was
what SJCI and the Union did when they referred the 1997 CBA bargaining deadlock to the
SOLE; however, SJCI pre-empted the resolution of the dispute by closing the high
school. SJCI disregarded the whole dispute resolution mechanism and undermined the
Union’s right to collective bargaining when it closed down the high school while the
dispute was still pending with the SOLE.

The Labor Code does not authorize the employer to close down the establishment on the
ground of illegal or excessive demands of the Union. Instead, aside from the remedy of
submitting the dispute for voluntary or compulsory arbitration, the employer may file a
complaint for ULP against the Union for bargaining in bad faith. If found guilty, this gives
rise to civil and criminal liabilities and allows the employer to implement a lock out, but not
the closure of the establishment resulting to the permanent loss of employment of the
whole workforce.

In fine, SJCI undermined the Labor Code’s system of dispute resolution by closing down
the high school while the 1997 CBA negotiations deadlock issues were pending resolution
before the SOLE. The closure was done in bad faith for the purpose of defeating the
Union’s right to collective bargaining. Besides, as found by the NLRC, the alleged illegality
and excessiveness of the Union’s demands were not sufficiently proved by SJCI. Even on
the assumption that the Union’s demands were illegal or excessive, SJCI’s remedy was to
await the resolution by the SOLE and to file a ULP case against the Union. However, SJCI
did not have the power to take matters into its own hands by closing down the school in
order to get rid of the Union.

SJCI next argues that the Union unduly endangered the safety and well-being of the
students who joined the valid strike held on November 10, 1997, thus it closed down the
high school on March 31, 1998. It claims that the Union coerced the students to join the
protest actions to pressure SJCI to give-in to the demands of the Union.

However, SJCI provided no evidence to substantiate these claims except for its
self-serving statements in its position paper before the Labor Arbiter and pictures
belatedly attached to the instant petition before this Court. However, the pictures were
never authenticated and, on its face, only show that some students watched the Union
members while they conducted their protest actions. More importantly, it is not true, as
SJCI claims, that the Union admitted that it coerced the students to join the protest actions
and recklessly placed the students in harm’s way. In its Reply16 to SJCI’s position paper
before the Labor Arbiter, the Union categorically denied that it put the students in harm’s
way or pressured them to join the protest actions. Given this denial by the Union, it was
incumbent upon SJCI to prove that the students were actually harmed or put in harm’s
way and that the Union coerced them to join the protest actions. The reason for this is that
the employer carries the burden of proof to establish that the closure of the business was
done in good faith. In the instant case, SJCI had the burden of proving that, indeed, the
closure of the school was necessary to uphold the safety and well-being of the students.

SJCI presented no evidence to show that the protest actions turned violent; that the
parents did not give their consent to their children who allegedly joined the protest actions;
that the Union did not take the necessary steps to protect some of the students who
allegedly joined the same; or that the Union forced or pressured the said students to join
the protest actions. Moreover, if the problem was the endangerment of the students’
well-being due to the protest actions by the Union, then the natural response would have
been to immediately go after the Union members who allegedly coerced the students to
join the protest actions and thereby endangered the students’ safety. But no such action
appears to have been undertaken by SJCI. There is even no showing that it prohibited its
students from joining the protest actions or informed the parents of the activities of the
students who allegedly joined the protest actions. This raises serious doubts as to
whether SJCI was really looking after the welfare of its students or merely using them as a
scapegoat to justify the closure of the school and thereby get rid of the Union.

Even assuming arguendo that the safety and well-being of some of the students who
allegedly joined the protest actions were compromised, still, the closure was done in bad
faith because it was done long after the strike had ended. Thus, there is no more danger
to the students’ well-being posed by the strike to speak of. It bears stressing that the
closure was implemented on March 31, 1998 but the risk to the safety of the students had
long ceased to exist as early as November 28, 1997 when the parties agreed to refer the
labor dispute to the SOLE, thus, betraying SJCI’s claim that it wanted to safeguard the
interest of the students.

Furthermore, if SJCI was after the interests of the students, then it should not have closed
the school because the parents and the students were vehemently opposed to the same,
as shown by the letter dated March 9, 1998 written by Mr. Teofilo G. Mamplata, President
of the Parents’ Association, and addressed to the Secretary of DECS, to wit:

As per letters sent recently by the school Management to the teachers and parents,
notifying of its closure on March 31, 1998, as decided upon by its Board of Trustees and
Stockholders on February 22, 1998 no reasons were stated to justify said decision and
action which will definitely affect adversely and to the detriment of the plight of parents,
teachers, students and other personnel of the school.

In this connection and due to the urgency of the matter, we hereby reiterate our appeal
with our prayer that the management and Board of Trustees of St. John Academy of
Calamba, Laguna, be stopped from pursuing their most sudden, unfair, unfavorable and
detrimental decision and action, and if warranted, sanctions be imposed against the erring
party.17 (Italics supplied)
Along the same vein, the parents voiced out their strong objections to the proposed
closure of the school, to wit:

PAHAYAG NG PAGTUTOL

Kami, mga magulang, mag-aaral, guro, propesyonal, manggagawa at iba pang sector ng
pamayanan sa bayan ng Calamba, Laguna ay nagpapahayag ng pagtutol sa hindi
makatarungang pagsasara ng paaralang SAINT JOHN ACADEMY. Ang kagyat na
pagsasara nito ay nagdulot ng malaking suliranin sa 2,300 estudyante (incoming 2nd year –
4th year), kagaya ng mga sumusunod:

1. Kakaunti ang bilang ng paaralan sa Calamba;

2. Walang paaralan na basta tatanggap sa 700 incoming third year at 800 incoming fourth
year;

3. Ang lahat ng "HONOR STUDENTS" ay mababaliwala ang kanilang pinagsikapan;

4. Negatibo ang epekto sa moral ng mga batang estudyante ang pagkakaroon ng physical
and moral displacement dahil sa biglaang pagsasara nito;

5. Hindi lahat ng magulang ay kakayaning bumayad ng mataas na tuition fee sa ibang

paaralan;

6. Ang mataas na kalidad ng turo ng mga guro sa paaralang ito ay mahirap pantayan; at

7. HIGIT NA LIGTAS SA SAKUNA ANG AMING MGA ANAK sa nasabing paaralan.

Bilang pagtutol sa pagsasara ng SAINT JOHN ACADEMY ay inilalagda namin ang aming
pangalan sa libis nito. (56 signatures follow)18 [Italics supplied]

Worth noting is the belief of the parents that the safety of their children was properly
secured in said high school. This was obviously in response to the claim of SJCI that the
school was being closed, inter alia, for the safety and well-being of the students. As
correctly observed by the CA:

The petitioner urges this Court to believe that they closed down the school out of their
sheer concern for the students, some of whom have started to sympathize and participate
in the union’s cause.

As intimated by the private respondent, however, the petitioner itself said that the closing
down of the school was, inter alia, "because of irreconcilable differences between the
school management and the Academy’s Union." Indeed, this translates into an admission
that the cessation of business was neither due to any patrician nor noble objective of
protecting the studentry but because the administration no longer wished to deal with
respondent Union.
We are further tempted to doubt the verity of the petitioner’s claim that in deciding to shut
down the school, it only had the welfare of its students in mind. There is evidence on
record which hints otherwise. Apparently, the parents of the students were vehemently
against the idea of closing down the academy as this would be, as it later did prove, more
detrimental to the studentry. No less than Mr. Teofilo Mamplata, President of St. John
Academy Parents Association of Calamba expressed the groups’ aversion against such
move and even wrote a letter to the then Secretary of the Department of Education
seeking immediate intervention to enjoin the school from closing. This is an indication that
the parents were unanimous in their sentiment that the shutdown would result in
inconvenience and displacement of the students who had already been halfway through
elementary school and high school. It turned out some were even forced to pay higher
tuition fees just so they would be admitted in other academies.19 (Italics supplied)

To recapitulate, there is insufficient evidence to hold that the safety and well-being of the
students were endangered and/or compromised, and that the Union was responsible
therefor. Even assuming arguendo that the students’ safety and well-being were
jeopardized by the said protest actions, the alleged threat to the students’ safety and
well-being had long ceased by the time the high school was closed. Moreover, the parents
were vehemently opposed to the closure of the school because there was no basis to
claim that the students’ safety was at risk. Taken together, these circumstances lead to
the inescapable conclusion that SJCI merely used the alleged safety and well-being of the
students as a subterfuge to justify its actions.

SJCI next contends that the subsequent reopening of the high school after only one year
from its closure did not show that the previous decision to close the high school was
tainted with bad faith because the reopening was done due to the clamor of the high
school’s former students and their parents. It claims that its former students complained
about the cramped classrooms in the schools where they transferred.

The contention is untenable.

First, the fact that after one year from the time it closed its high school, SJCI opened a
college and elementary department, and reopened its high school department showed
that it never intended to cease operating as an educational institution. Second, there is
evidence on record contesting the alleged reason of SJCI for reopening the high
school, i.e., that its former students and their parents allegedly clamored for the reopening
of the high school. In a letter20 dated December 15, 2000 addressed to the NLRC, which
has never been rebutted by SJCI, Mr. Mamplata, stated that –

Para po sa inyong kabatiran xxx isinara nila ang paaralang ito dahil sa mga nag-alsang
guro.

Sa ganitong kalagayan kaming pamunuan at kasapi ng PTA ay nakipag-usap sa

pamunuan ng paaralang ito na huwag naming isara dahil malaking epekto ito sa aming
mga anak dahil noon ay kalagitnaan pa lamang ng pasukan. Sa kabila ng pakiusap
naming ito ay hindi kami pinakinggan at sa halip ay tuluyang isinara. Sa kanilang
ginawang ito marami sa mga bata ang hindi nakapasok sa ibang paaralan at ang iba
naman ay nadoble ang pinagbayaran sa matrikula. Sa kabuuan nito ay malaking paghirap
ang ginawa nila sa aming mga magulang at anak na nag-aaral sa paaralang ito dahil
lamang sa panggigipit sa mga gurong walang tanging hangarin kundi bayaran sila ng
naaayon sa itinakda ng batas.

Sa taong 1999-2000 ay muling binuksan ang paaralang ito na sabi nila ay sa kahilingan ng
PTA. Alin kayang PTA ang tinutukoy nila. Paanong magkakaroon ng PTA samantalang ito
ay nakasara at kami ang PTA bago ito isinara.

Kaya po pinaabot naming sa inyong kaalaman na kaming PTA ng paaralang (St. John
Academy) ito ay hindi kailanman humiling sa kanila na pamuling buksan ito.21 (Italics
supplied)

Finally, when SJCI reopened its high school, it did not rehire the Union members.
Evidently, the closure had achieved its purpose, that is, to get rid of the Union members.

Clearly, these pieces of evidence regarding the subsequent reopening of the high school
after only one year from its closure further show that the high school’s closure was done in
bad faith.

Lastly, SJCI asserts that the strike conducted by the 25 employees on May 4, 1998 was
illegal for failure to take the necessary strike vote and give a notice of strike. However, we
agree with the findings of the NLRC and CA that the protest actions of the Union cannot
be considered a strike because, by then, the employer-employee relationship has long
ceased to exist because of the previous closure of the high school on March 31, 1998.

In sum, the timing of, and the reasons for the closure of the high school and its reopening
after only one year from the time it was closed down, show that the closure was done in
bad faith for the purpose of circumventing the Union’s right to collective bargaining and its
members’ right to security of tenure. Consequently, SJCI is liable for ULP and illegal
dismissal.

WHEREFORE, the petition is DENIED. The April 22, 2004 Decision and April 15, 2005
Resolution of the Court Appeals in CA-G.R. SP No. 74519 are AFFIRMED.

SO ORDERED.
G.R. No. 186605 November 17, 2010

CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION-NFL [CABEU-NFL],

represented by its President, PABLITO SAGURAN, Petitioner,
vs.
CENTRAL AZUCARERA DE BAIS, INC. [CAB], represented by its President,
ANTONIO STEVEN L. CHAN,Respondent.

DECISION

MENDOZA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
filed by petitioner Central Azucarera De Bais Employees Union-National Federation of
Labor (CABEU-NFL) seeking to reverse and set aside: (1) the September 26, 2008
Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 03238, which reversed the July
18, 2007 Decision2 and September 28, 2007 Resolution3 of the National Labor Relations
Commission (NLRC)and reinstated the July 13, 2006 Decision4 of the Labor Arbiter (LA);
and (2) its January 21, 2009 Resolution5denying the Motion for Reconsideration of
CABEU-NFL.

THE FACTS

Respondent Central Azucarera De Bais, Inc. (CAB) is a corporation duly organized and
existing under the laws of the Philippines. It is represented by its President, Antonio
Steven L. Chan (Chan), in this proceeding.

CABEU-NFL is a duly registered labor union and a certified bargaining agent of the CAB
rank-and-file employees, represented by its President, Pablito Saguran (Saguran).

On January 19, 2004, CABEU-NFL sent CAB a proposed Collective Bargaining

Agreement (CBA)6 seeking increases in the daily wage and vacation and sick leave
benefits of the monthly employees and the grant of leave benefits and 13th month pay to
seasonal workers.

On March 27, 2004, CAB responded with a counter-proposal7 to the effect that the
production bonus incentive and special production bonus and incentives be maintained. In
addition, respondent CAB agreed to execute a pro-rated increase of wages every time the
government would mandate an increase in the minimum wage. CAB, however, did not
agree to grant additional and separate Christmas bonuses.

On May 21, 2004, CAB received an Amended Union Proposal8 sent by CABEU-NFL
reducing its previous demand regarding wages and bonuses. CAB, however, maintained
its position on the matter. Thus, the collective bargaining negotiations resulted in a
deadlock.
On account of the impasse, "CABEU-NFL filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB). The NCMB then assumed
conciliatory-mediation jurisdiction and summoned the parties to conciliation conferences."9

In its June 2, 2005 Letter sent to CAB10 (letter-request), CABEU-NFL requested copies of
CAB’s annual financial statements from 2001 to 2004 and asked for the resumption of
conciliation meetings.

CAB replied through its June 14, 2005 Letter11 (letter-response) to NCMB Regional
Director of Dumaguete City Isidro Cepeda, which reads:

At the outset, it observed that the letter signed by Mr. Pablito Saguran who is no longer an
employee of the Central for he was one of those lawfully terminated due to an authorized
cause x x x.

More importantly, the declared purpose of the requested conciliation meeting has already
been rendered moot and academic because: (1) the Union which Mr. Saguran purportedly
represents has already lost its majority status by reason of the disauthorization and
withdrawal of support thereto by more than 90% of the rank and file employees in the
bargaining unit of Central sometime in January, 2005, and (2) the workers themselves,
acting as principal, after disauthorizing the previous agent CABEU-NFL have organized
themselves into a new Union known as Central Azucarera de Bais Employees Labor
Association (CABELA) and after obtaining their registration certificate and making due
representation that it is a duly organized union representing almost all the rank and file
workers in the Central, had concluded a new collective bargaining agreement with the
Central on April 21, 2005 in Dumaguete City. The aforesaid CBA had been duly ratified by
the rank and file workers constituting 91% of the collective bargaining unit x x x.

Clearly, therefore, the request for further conciliation conference will serve no lawful and
practical purpose. In view of the foregoing, and for the sake of continued industrial peace
prevailing in the Central, we beseech the Honorable Office to disregard the aforesaid
request.

It appears that the NCMB failed to act on the letter-response of CAB. Neither did it
convene CAB and CABEU-NFL to continue the negotiations between them.

Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for Unfair Labor
Practice12 for the former’s refusal to bargain with it.

On July 13, 2006, the LA dismissed the complaint.13 Pertinent portions of the LA decision
read:

The procedure in the discharge of the duty to bargain collectively is provided for in Article
250 of the Labor Code: (1) the party who desires to negotiate an agreement shall serve a
written notice upon the other party with a statement of proposals; (2) the other party shall
make a reply thereto not later than ten (10) days from receipt of notice; (3) if the dispute is
unsettled resulting in a deadlock, the NCMB shall intervene upon the request or at its own
initiative and call the parties to conciliation Meeting x x x (4) if the NCMB fails to effect an
agreement, the Board shall exert all efforts to settle disputes amicably and encourage the
parties to submit their case to a voluntary arbitrator; (5) the parties may also go on strike
or declare a lockout as the case may be after complying with legal requirements. Subject,
of course, to the plenary power of the Secretary of Labor and Employment to assume
jurisdiction over the dispute or to certify the same to the NLRC for compulsory arbitration.

In the case at bar, the record shows that respondent CAB replied to the complainant
Union’s CBA proposals with its own set of counterproposals x x x. Likewise, respondent
CAB responded to the Union’s subsequent counterproposals x x x. Record further shows
that respondent CAB participated in a series of CBA negotiations conducted by the parties
at the plant level as well as in the conciliation/mediation proceedings conducted by the
NCMB. Unfortunately, both exercises resulted in a deadlock.

At this juncture it cannot be said, therefore, that respondent CAB refused to negotiate or
that it violated its duty to bargain collectively in light of its active participation in the past
CBA negotiations at the plant level as well as in the NCMB. x x x

xxx xxx xxx

We do not agree that respondent CAB committed an unfair labor practice act in
questioning the capacity of Mr. Pablito Saguran to represent complainant union in the
CBA negotiations because Mr. Pablito Saguran was no longer an employee of respondent
CAB at that time having been separated from employment on the ground of redundancy
and having received the corresponding separation benefits. x x x.

So also, we do not find respondent CAB guilty of unfair labor practice by its act of writing
the NCMB Director in a letter dated June 24, 2005, stating its legal position on
complainant’s request for further conciliation to the effect that since almost [all] of the rank
and file employees, the principals in a principal-agent relationship, have withdrawn their
support to the complainant union and that in fact they have already organized themselves
into a DOLE-registered labor union known as CABELA, any further conciliation will serve
no lawful and practical purpose. x x x.

At this juncture, it was incumbent upon the NCMB to make a ruling on the request of the
complainant union as well as upon the corresponding comment of respondent CAB. If the
NCMB chose not to pursue further negotiation between the parties, respondent CAB
should not be faulted therefor. x x x.

Under the facts obtaining, when the conciliation/mediation by the NCMB has not been
officially concluded, we find the instant complaint for unfair labor practice not only without
merit but also premature.
WHEREFORE, foregoing considered, the case is hereby DISMISSED for lack of merit.

SO ORDERED.

On appeal, the NLRC in its July 18, 2007 Decision14 reversed the LA’s decision and found
CAB guilty of unfair labor practice. The NLRC explained:

The issue to be resolved is whether or not respondent company committed an unfair labor
practice for violation of its duty to bargain collectively in good faith.

xxx xxx xxx

The important event to discuss in the instant case is respondent’s act of concluding a CBA
with CABELA. As gleaned from respondent’s letter to NCMB dated June 14, 2005, it
concluded a CBA with CABELA because they opined that complainant lost its majority
status in January 2005 when 90% of the rank-and-file employees disauthorized and
withdrew their support to complainant. These rank-and-file employees who withdrew their
support, organized and formed CABELA. In fine, respondent believed that CABELA
enjoyed the majority status of CABELA since it was supported by 90% of all employees in
the bargaining unit.

In resolving the issue of whether respondent’s act of concluding a CBA with CABELA is
warranted under the circumstances is to examine the validity of such act. The mechanics
of collective bargaining are set in motion only when the following jurisdictional
preconditions are present, namely: 1) possession of the status of majority representation
of the employees’ representative in accordance with any of the means of selection and
designation provided for by the Labor Code, 2) proof of majority representation, and 3) a
demand to bargain under Article 250, par. (a) of the Labor Code x x x.

In the instant case, it is undeniable that complainant is the certified collective bargaining
agent of the regular workers and seasonal employees of respondent. Its status as such
was determined in a certification election conducted by the Department of Labor and
Employment (DOLE). As such, there was no reason for respondent to deal and negotiate
with CABELA since the latter does not have such status of majority representation. x x x.

X x x. Based on this premise, respondent violated its duty to bargain with complainant
when during the pendency of the conciliation proceedings before the NCMB it concluded a
CBA with another union as a consequence, it refused to resume negotiation with
complainant upon the latter’s demand. 1avvphi1

With respect to respondent’s observation that the request for conciliation meeting was
signed by one who is not eligible and authorized to represent any union with the company
since he is no longer an employee, suffice it to state that at the time the request was made,
such employee has questioned the validity of his dismissal with then NLRC. X x x.
Respondent’s failure to act on the request of the complainant to resume negotiation for no
valid reason constitutes unfair labor practice. Consequently, the proposed CBA as
amended should be imposed to respondent.

WHEREFORE, premises considered, the appealed Decision is REVERSED and SET

ASIDE. Another one is entered declaring that respondent Central Azucarera de Bais is
guilty of unfair labor practice. As such, the proposed CBA of complainant, as amended is
imposed to respondent Central Azucarera de Bais.

SO ORDERED.

CAB moved for a reconsideration but the motion was denied by the NLRC in its resolution
dated September 28, 2007.15

Unsatisfied, CAB elevated the matter to the CA by way of a petition for certiorari under
Rule 65 alleging grave abuse of discretion on the part of the NLRC in reversing the LA
decision and issuing the questioned resolution.

On September 26, 2008, the CA found CAB’s petition meritorious and reversed the NLRC
decision and resolution. The CA pointed out:

xxx xxx xxx

First. This Court has acquired jurisdiction over the person of private respondent
CABEU-NFL. Through its counsel of record, CABEU-NFL already filed its extensive
comment on the instant petition. Hence, it is now useless to contend that it was denied
notice of the same and the opportunity to be heard on it. x x x.

xxx xxx xxx

Second. Petitioner CAB was not shown to have violated the rule requiring parties to
certify in their initiatory pleadings against forum shopping. Private respondent
CABEU-NFL alleges in its comment that the two cases are pending before this Court:
CA-G.R. No. 03132 and CA-G.R. No. 03017 involving the same parties as in the case at
bar. Unfortunately, CABEU-NFL did not explain how the issues in those pending cases
are related to or similar to those involved in this proceeding. x x x.

xxx xxx xxx

Third. x x x xxx xxx

In the case at bar, private respondent CABEU-NFL failed in its burden of proof to present
substantial evidence to support the allegation of unfair labor practice. The
assailed Decision and Resolution of public respondent referred merely to two (2)
circumstances which allegedly support the conclusion that the presumption of good faith
had been rebutted and that bad faith was extant in petitioner’s actions. To recall, these
circumstances are: (a) the execution of a supposed collective bargaining agreement with
another labor union, CABELA; and (b) CAB’s sending of the letter dated June 14, 2005 to
NCMB seeking to call off the collective bargaining negotiations. These, however, are not
enough to ascribe the very serious offense of unfair labor practice upon petitioner. x x x.

xxx xxx xxx

x x x petitioner CAB was not scuttling the ongoing negotiations towards a new collective
bargaining agreement. It was simply propounding a position to the NCMB for the latter to
rule on. That the negotiations did not push through was not the result of CAB
management’s intransigence because there was none – at least so far as the case record
confirms. There is nothing that establishes petitioner’s predetermined resolve not to
budge from an initial position – perhaps stubbornness of some ambiguous sort but not the
absence of good faith to pursue collective bargaining. x x x.

xxx xxx xxx

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated July 18,
2007 and Resolution dated September 28, 2007 of public respondent National Labor
Relations Commission in NLRC Case No. V-000002-07 are REVERSED and SET
ASIDE. The Decision dated July 13, 2006 in NLRC RAB VII Case No. 07-0104-2005-D
entitled ‘Central Azucarera de Bais Employees Union-NFL (CABEU-NFL), represented by
Pablito Saguran, complainant, versus, (CAB) and/or Steven Chan as Owner and Roberto
de la Rosa as Manager, respondents’ of Labor Arbiter Fructuoso T. Villarin IV
is REINSTATED and AFFIRMED IN TOTO. Costs of suit de oficio.

SO ORDERED.

CABEU-NFL moved for a reconsideration but its motion was denied by the CA in its
Resolution dated January 21, 2009.16

Hence this petition.

In its Memorandum,17 CABEU-NFL raised the following:

ISSUES

I) WHETHER OF NOT THE COURT OF APPEALS VIOLATED THE CONSTITUTIONAL

RIGHTS OF PETITIONER WHEN THE HONORABLE COURT OF APPEALS
REVERSED THE FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION
(NLRC) WHICH HELD RESPONDENT GUILTY OF UNFAIR LABOR PRACTICE.18

II) WHETHER OR NOT THE COURT OF APPEALS VIOLATED THE

CONSTITUTIONAL RIGHTS OF THE PETITIONER WHEN IT GAVE DUE COURSE TO
RESPONDENT’S PETITION FOR CERTIORARI WITHOUT COMPLYING WITH THE
JURISDICTIONAL REQUIREMENTS UNDER RULE 65, SECTION 1 AND SUPREME
COURT CIRCULAR NO. 04-94, ON CERTIFICATION ON NON-FORUM SHOPPING.19

In sum, the petition raises three (3) issues for the Court’s consideration which are whether
or not the CA erred: (1) in giving due course to the petition for certiorari despite service of
the copy of the petition to CABEU-NFL’s counsel and not to itself ; (2) in giving due course
to the petition for certiorari despite the failure of CAB to indicate the address of
CABEU-NFL in the petition; and (3) in absolving CAB of unfair labor practice.

CABEU-NFL insists that the CA erred in giving due course to the petition
for certiorari because respondent CAB served a copy of its CA petition to CABEU-NFL’s
counsel and not to CABEU-NFL itself. CABEU-NFL, likewise, harps on the failure of CAB
to indicate CABEU-NFL’s full address in the said petition as required in petitions
for certiorari, citing Section 1, Rule 6520 in relation to Section 3, Rule 46.21

Ultimately, CABEU-NFL aggressively asserts that CAB is guilty of unfair labor practice on
the ground of its refusal to bargain collectively. CABEU-NFL claims to be the duly certified
bargaining agent of the CAB rank-and-file employees such that it requested to bargain
through a letter-request which was subsequently turned down by CAB in its
letter-response. Anchored on the admission in the CAB letter-response of a supposed
CBA with CABELA, CABEU-NFL charges that such act constitutes a violation of CAB’s
duty to bargain collectively under Article 253 of the Labor Code22 and consequently an act
of unfair labor practice prohibited under Article 248 (g) of the Labor Code.23 CABEU-NFL
also submits that CAB violated the prohibition against forum shopping when it filed its
petition in the CA. CABEU-NFL claims that the failure of CAB’s counsel to disclose to the
CA the pendency of CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017 constituted forum
shopping, a sufficient ground to dismiss the said petition.

In its Memorandum,24 CAB claims that service of the copy of the petition for certiorari to
CABEU-NFL’s counsel was sufficient. It vehemently denies its alleged failure to indicate
CABEU-NFL’s name and address in its petition. CAB also stresses that CA-G.R. SP No.
033132 and CA-G.R. SP No. 03017 "were initiated exclusively by members of CABEU and
by CABEU itself, respectively, and not by CAB."25 CAB further argues that there was no
identity of issues or causes of action between the two abovementioned cases and this
case.

On the issue of unfair labor practice, CAB counters that in view of the disassociation of
more than 90% of rank-and-file workers from CABEU-NFL, it was constrained to negotiate
and conclude in good faith a new CBA with CABELA, the newly established union by
workers who disassociated from CABEU-NFL. CAB emphasizes that it declined further
negotiations with CABEU-NFL in good faith because to continue with it would serve no
practical purpose. Considering that the NCMB has yet to resolve CAB’s query in its
letter-response, CAB was left without any choice but accede to the demands of CABELA.
In concluding a CBA with CABELA, CAB claims that it acted in the best interest of the
rank-and-file workers which belied bad faith.
 THE COURT’S RULING

The petition lacks merit.

On the technical issues, CABEU-NFL’s insistence that service of the copy of the CA
petition should have been made to it, rather than to its counsel, is unavailing.

On the matter of service, Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of
Court, clearly provides that in a petition filed originally in the CA, the petitioner is required
to serve a copy of the petition on the adverse party before its filing. If the adverse party
appears by counsel, service shall be made on such counsel pursuant to Section 2, Rule
13.26

With respect to the alleged failure of CAB to indicate the address of CABEU-NFL in the
CA petition, it appears that CABEU-NFL is misleading the Court. A perusal of the
petition27 filed before the CA reveals that CAB indeed indicated both the name28 and
address29 of CABEU-NFL. Moreover, the indication in said petition by CAB that
CABEU-NFL could be served with court processes through its counsel was substantial
compliance with the Rules.30

The Court, likewise, cannot sustain CABEU-NFL’s contention on forum shopping against
CAB.

By forum shopping, a party initiates two or more actions in separate tribunals, grounded
on the same cause, hoping that one or the other tribunal would favorably dispose of the
matter. The elements of forum shopping are: (1) identity of parties, or at least such parties
as would represent the same interest in both actions; (2) identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (3) identity of the two
preceding particulars such that any judgment rendered in the other action will, regardless
of which party is successful, amount to resjudicata in the action under consideration.31

In the case at bench, CABEU-NFL merely raised the fact of the pendency of CA-G.R. SP
No. 033132 and CA-G.R. SP No. 03017 in its comment on the petition for certiorari32 filed
before the CA without demonstrating any similarity in the causes of action between the
said cases and the present case. The CA, citing the ruling in T’boli Agro-Industrial
Development, Inc. v. Solilapsi33 as authority, points out that:

This Court cannot take judicial notice of what CA-G.R. No. 03132 and CA-G.R. No. 03017
involve because:

"As a general rule, courts are not authorized to take judicial notice in the adjudication of
cases pending before them of the contents of other cases even when such cases have
been tried or are pending in the same court and notwithstanding the fact that both cases
may have been tried or are actually pending before the same judge. Courts may be
required to take judicial notice of the decisions of the appellate courts but not of the
decisions of the coordinate trial courts, or even of a decision or the facts involved in
another case tried by the same court itself, unless the parties introduce the same in
evidence or the court, as a matter of convenience, decides to do so. Besides, judicial
notice of matters which ought to be known to judges because of their judicial functions is
only discretionary upon the court. It is not mandatory."

In the absence of evidence to show that the issues involved in these cases are the same,
this Court cannot give credence to private respondent’s claim of forum shopping.

The Court now proceeds to determine whether or not respondent CAB was guilty of acts
constituting unfair labor practice by refusing to bargain collectively.

The Court rules in the negative.

CAB is being accused of violating its duty to bargain collectively supposedly because of its
act in concluding a CBA with CABELA, another union in the bargaining unit, and its failure
to resume negotiations with CABEU-NFL.

The concept of unfair labor practice is provided in Article 247 of the Labor Code which
states:

Article 247. Concept of Unfair Labor Practice and Procedure for Prosecution thereof. --
Unfair labor practices violate the constitutional right of workers and employees to
self-organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations.

xxx xxx xxx

The Labor Code, likewise, enumerates the acts constituting unfair labor practices of the
employer, thus:

Article 248. Unfair Labor Practices of Employers.––It shall be unlawful for an employer to
commit any of the following unfair labor practice:

xxx xxx xxx

(g) To violate the duty to bargain collectively as prescribed by this Code.

For a charge of unfair labor practice to prosper, it must be shown that CAB was motivated
by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to
morals, good customs, or public policy, and, of course, that social humiliation, wounded
feelings or grave anxiety resulted x x x" in suspending negotiations with CABEU-NFL.
Notably, CAB believed that CABEU-NFL was no longer the representative of the
workers.34 It just wanted to foster industrial peace by bowing to the wishes of the
overwhelming majority of its rank and file workers and by negotiating and concluding in
good faith a CBA with CABELA."35 Such actions of CAB are nowhere tantamount to
anti-unionism, the evil sought to be punished in cases of unfair labor practices.

Furthermore, basic is the principle that good faith is presumed and he who alleges bad
faith has the duty to prove the same. By imputing bad faith to the actuations of CAB,
CABEU-NFL has the burden of proof to present substantial evidence to support the
allegation of unfair labor practice.36 Apparently, CABEU-NFL refers only to the
circumstances mentioned in the letter-response, namely, the execution of the supposed
CBA between CAB and CABELA and the request to suspend the negotiations, to
conclude that bad faith attended CAB’s actions. The Court is of the view that CABEU-NFL,
in simply relying on the said letter-response, failed to substantiate its claim of unfair labor
practice to rebut the presumption of good faith.

Moreover, as correctly determined by the LA, the filing of the complaint for unfair labor
practice was premature inasmuch as the issue of collective bargaining is still
pending before the NCMB.

In the resolution of labor cases, this Court has always been guided by the State policy
enshrined in the Constitution that the rights of workers and the promotion of their welfare
shall be protected. The Court is, likewise, guided by the goal of attaining industrial peace
by the proper application of the law. Thus, it cannot favor one party, be it labor or
management, in arriving at a just solution to a controversy if the party has no valid support
to its claims. It is not within this Court’s power to rule beyond the ambit of the law.37

WHEREFORE, the petition is DENIED.

SO ORDERED.
G.R. Nos. 158930-31 March 3, 2008

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS

- KILUSANG MAYO UNO (UFE-DFA-KMU), petitioner,
vs.
NESTLÉ PHILIPPINES, INCORPORATED, respondent.

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

G.R. Nos. 158944-45 March 3, 2008

NESTLÉ PHILIPPINES, INCORPORATED, petitioner,

vs.
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS
- KILUSANG MAYO UNO (UFE-DFA-KMU), respondent.

RESOLUTION

CHICO-NAZARIO, J.:

On 22 August 2006, this Court promulgated its Decision1 in the above-entitled cases, the
dispositive part of which reads –

WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seeking that
Nestlé be declared to have committed unfair labor practice in allegedly setting a
precondition to bargaining is DENIED. The Petition in G.R. No. 158944-45, however, is
PARTLY GRANTED in that we REVERSE the ruling of the Court of Appeals in CA G.R.
SP No. 69805 in so far as it ruled that the Secretary of the DOLE gravely abused her
discretion in failing to confine her assumption of jurisdiction power over the ground rules of
the CBA negotiations; but the ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective bargaining negotiations between
UFE-DFA-KMU and Nestlé is AFFIRMED. The parties are directed to resume negotiations
respecting the Retirement Plan and to take action consistent with the discussions
hereinabove set forth. No costs.

Subsequent thereto, Nestlé Philippines, Incorporated (Nestlé) filed a Motion for

Clarification2 on 20 September 2006; while Union of Filipro Employees – Drug, Food and
Allied Industries Union – Kilusang Mayo Uno (UFE-DFA-KMU), on 21 September 2006,
filed a Motion for Partial Reconsideration3 of the foregoing Decision.

The material facts of the case, as determined by this Court in its Decision, may be
summarized as follows:

UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file
employees of Nestlé belonging to the latter’s Alabang and Cabuyao plants. On 4 April
2001, as the existing collective bargaining agreement (CBA) between Nestlé and
UFE-DFA-KMU4 was to end on 5 June 2001,5 the Presidents of the Alabang and Cabuyao
Divisions of UFE-DFA-KMU informed Nestlé of their intent to "open [our] new Collective
Bargaining Negotiation for the year 2001-2004 x x x as early as June 2001."6 In response
thereto, Nestlé informed them that it was also preparing its own counter-proposal and
proposed ground rules to govern the impending conduct of the CBA negotiations.

On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only)7, Nestlé
reiterated its stance that "unilateral grants, one-time company grants, company-initiated
policies and programs, which include, but are not limited to the Retirement Plan, Incidental
Straight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects
of CBA negotiations and therefore shall be excluded therefrom."8

Dialogue between the company and the union thereafter ensued.

On 14 August 2001, however, Nestlé requested9 the National Conciliation and Mediation
Board (NCMB), Regional Office No. IV, Imus, Cavite, to conduct preventive mediation
proceedings between it and UFE-DFA-KMU owing to an alleged impasse in said
dialogue; i.e., that despite fifteen (15) meetings between them, the parties failed to reach
any agreement on the proposed CBA.

Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Notice
of Strike10 on 31 October 2001 with the NCMB, complaining, in essence, of a bargaining
deadlock pertaining to economic issues, i.e., "retirement (plan), panel composition, costs
and attendance, and CBA".11 On 07 November 2001, another Notice of Strike12 was filed by
the union, this time predicated on Nestlé’s alleged unfair labor practices, that is,
bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to
include the issue of the Retirement Plan in the CBA negotiations. The result of a strike
vote conducted by the members of UFE-DFA-KMU yielded an overwhelming approval of
the decision to hold a strike.13

On 26 November 2001, prior to holding the strike, Nestlé filed with the DOLE a Petition for
Assumption of Jurisdiction,14 praying for the Secretary of the DOLE, Hon. Patricia A. Sto.
Tomas, to assume jurisdiction over the current labor dispute in order to effectively enjoin
any impending strike by the members of the UFE-DFA-KMU at the Nestlé’s Cabuyao
Plant in Laguna.

On 29 November 2001, Sec. Sto. Tomas issued an Order15 assuming jurisdiction over the
subject labor dispute. The fallo of said Order states that:

CONSIDERING THE FOREGOING, this Office hereby assumes jurisdiction over the labor
dispute at the Nestlé Philippines, Inc. (Cabuyao Plant) pursuant to Article 263 (g) of the
Labor Code, as amended.
Accordingly, any strike or lockout is hereby enjoined. The parties are directed to cease
and desist from committing any act that might lead to the further deterioration of the
current labor relations situation.

The parties are further directed to meet and convene for the discussion of the union
proposals and company counter-proposals before the National Conciliation and Mediation
Board (NCMB) who is hereby designated as the delegate/facilitator of this Office for this
purpose. The NCMB shall report to this Office the results of this attempt at conciliation and
delimitation of the issues within thirty (30) days from the parties’ receipt of this Order, in no
case later than December 31, 2001. If no settlement of all the issues is reached, this Office
shall thereafter define the outstanding issues and order the filing of position papers for a
ruling on the merits.

UFE-DFA-KMU sought reconsideration16 of the above but nonetheless moved for

additional time to file its position paper as directed by the Assumption of Jurisdiction
Order.

On 14 January 2002, Sec. Sto. Tomas denied said motion for reconsideration.

On 15 January 2002, despite the order enjoining the conduct of any strike or lockout and
conciliation efforts by the NCMB, the employee members of UFE-DFA-KMU at Nestlé’s
Cabuyao Plant went on strike.

In view of the above, in an Order dated on 16 January 2002, Sec. Sto. Tomas directed: (1)
the members of UFE-DFA-KMU to return-to-work within twenty-four (24) hours from
receipt of such Order; (2) Nestlé to accept back all returning workers under the same
terms and conditions existing preceding to the strike; (3) both parties to cease and
desist from committing acts inimical to the on-going conciliation proceedings leading to
the further deterioration of the situation; and (4) the submission of their respective position
papers within ten (10) days from receipt thereof. But notwithstanding the Return-to-Work
Order, the members of UFE-DFA-KMU continued with their strike, thus, prompting Sec.
Sto. Tomas to seek the assistance of the Philippine National Police (PNP) for the
enforcement of said order.

On 7 February 2002, Nestlé and UFE-DFA-KMU filed their respective position papers.
Nestlé addressed several issues concerning economic provisions of the CBA as well as
the non-inclusion of the issue of the Retirement Plan in the collective bargaining
negotiations. On the other hand, UFE-DFA-KMU limited itself to the issue of whether or
not the retirement plan was a mandatory subject in its CBA negotiations.

On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU the chance to tender its
stand on the other issues raised by Nestlé but not covered by its initial position paper by
way of a Supplemental Position Paper.
UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings,
one of which was a Manifestation with Motion for Reconsideration of the Order dated
February 11, 2002 assailing the Order of February 11, 2002 for supposedly being contrary
to law, jurisprudence and the evidence on record. The union posited that Sec. Sto. Tomas
"could only assume jurisdiction over the issues mentioned in the notice of strike subject of
the current dispute,"17 and that the Amended Notice of Strike it filed did not cite, as one of
the grounds, the CBA deadlock.

On 8 March 2002, Sec. Sto. Tomas denied the motion for reconsideration of
UFE-DFA-KMU.

Thereafter, UFE-DFA-KMU filed a Petition for Certiorari18 before the Court of Appeals,
alleging that Sec. Sto. Tomas committed grave abuse of discretion amounting to lack or
excess of jurisdiction when she issued the Orders of 11 February 2002 and 8 March 2002.

In the interim, in an attempt to finally resolve the crippling labor dispute between the
parties, then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with
an Order19 dated 02 April 2002, ruling that:

a. we hereby recognize that the present Retirement Plan at the Nestlé Cabuyao Plant is a
unilateral grant that the parties have expressly so recognized subsequent to the Supreme
Court’s ruling in Nestlé, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4, 1991, and is
therefore not a mandatory subject for bargaining;

b. the Union’s charge of unfair labor practice against the Company is hereby dismissed for
lack of merit;

c. the parties are directed to secure the best applicable terms of the recently concluded
CBSs between Nestlé Phils. Inc. and it eight (8) other bargaining units, and to adopt these
as the terms and conditions of the Nestlé Cabuyao Plant CBA;

d. all union demands that are not covered by the provisions of the CBAs of the other eight
(8) bargaining units in the Company are hereby denied;

e. all existing provisions of the expired Nestlé Cabuyao Plant CBA without any counterpart
in the CBAs of the other eight bargaining units in the Company are hereby ordered
maintained as part of the new Nestlé Cabuyao Plant CBA;

f. the parties shall execute their CBA within thirty (30) days from receipt of this Order,
furnishing this Office a copy of the signed Agreement;

g. this CBA shall, in so far as representation is concerned, be for a term of five (5) years;
all other provisions shall be renegotiated not later than three (3) years after its effective
date which shall be December 5, 2001 (or on the first day six months after the expiration
on June 4, 2001 of the superceded CBA).
UFE-DFA-KMU moved to reconsider the aforequoted ruling, but such was subsequently
denied on 6 May 2002.

For the second time, UFE-DFA-KMU went to the Court of Appeals via another Petition
for Certiorari seeking to annul the Orders of 02 April 2002 and 06 May 2002 of the
Secretary of the DOLE, having been issued in grave abuse of discretion amounting to lack
or excess of jurisdiction.

On 27 February 2003, the appellate court promulgated its Decision on the twin petitions
for certiorari, ruling entirely in favor of UFE-DFA-KMU, the dispositive part thereof stating
–

WHEREFORE, in view of the foregoing, there being grave abuse on the part of the public
respondent in issuing all the assailed Orders, both petitions are hereby GRANTED. The
assailed Orders dated February 11, 2001, and March 8, 2001 (CA-G.R. SP No. 69805), as
well as the Orders dated April 2, 2002 and May 6, 2002 (CA-G.R. SP No. 71540) of the
Secretary of Labor and Employment in the case entitled: "IN RE: LABOR DISPUTE AT
NESTLE PHILIPPINES INC. (CABUYAO FACTORY)" under OS-AJ-0023-01
(NCMB-RBIV-CAV-PM-08-035-01, NCMB-RBIV-LAG-NS-10-037-01,
NCMB-RBIV-LAG-NS-11-10-039—01) are hereby ANNULLED and SET ASIDE. Private
respondent is hereby directed to resume the CBA negotiations with the petitioner.20

Both parties appealed the aforequoted ruling. Nestlé essentially assailed that part of the
decision finding the DOLE Secretary to have gravely abused her discretion amounting to
lack or excess of jurisdiction when she ruled that the Retirement Plan was not a valid
issue to be tackled during the CBA negotiations; UFE-DFA-KMU, in contrast, questioned
the appellate court’s decision finding Nestlé free and clear of any unfair labor practice.

Since the motions for reconsideration of both parties were denied by the Court of Appeals
in a joint Resolution dated 27 June 2003, UFE-DFA-KMU and Nestlé separately filed the
instant Petitions for Review on Certiorari under Rule 45 of the Rules of Court, as
amended.

G.R. No. 158930-31 was filed by UFE-DFA-KMU against Nestlé seeking to reverse the
Court of Appeals Decision insofar as the appellate court’s failure to find Nestlé guilty of
unfair labor practice was concerned; while G.R. No. 158944-45 was instituted by Nestlé
against UFE-DFA-KMU likewise looking to annul and set aside the part of the Court of
Appeals Decision declaring that: 1) the Retirement Plan was a valid collective bargaining
issue; and 2) the scope of the power of the Secretary of the Department of Labor and
Employment (DOLE) to assume jurisdiction over the labor dispute between
UFE-DFA-KMU and Nestlé was limited to the resolution of questions and matters
pertaining merely to the ground rules of the collective bargaining negotiations to be
conducted between the parties.
On 29 March 2004, this Court resolved21 to consolidate the two petitions inasmuch as they
(1) involved the same set of parties; (2) arose from the same set of circumstances, i.e.,
from several Orders issued by then DOLE Secretary, Hon. Patricia A. Sto. Tomas,
respecting her assumption of jurisdiction over the labor dispute between Nestlé and
UFE-DFA-KMU, Alabang and Cabuyao Divisions;22 and (3) similarly assailed the same
Decision and Resolution of the Court of Appeals.

After giving due course to the instant consolidated petitions, this Court promulgated on 22
August 2006 its Decision, now subject of UFE-DFA-KMU’s Motion for Partial
Reconsideration and Nestlé’s Motion for Clarification.

In its Motion for Partial Reconsideration, UFE-DFA-KMU would have this Court address
and discuss anew points or arguments that have basically been passed upon in this
Court’s 22 August 2006 Decision. Firstly, it questions this Court’s finding that Nestlé was
not guilty of unfair labor practice, considering that the transaction speaks for itself, i.e, res
ipsa loquitor. And made an issue again is the question of whether or not the DOLE
Secretary can take cognizance of matters beyond the amended Notice of Strike.

As to Nestlé’s prayer for clarification, the corporation seeks elucidation respecting the
dispositive part of this Court’s Decision directing herein parties to resume negotiations on
the retirement compensation package of the concerned employees. It posits that "[i]n
directing the parties to negotiate the Retirement Plan, the Honorable Court x x x might
have overlooked the fact that here, the Secretary of Labor had already assumed
jurisdiction over the entire 2001-2004 CBA controversy x x x."

As to the charge of unfair labor practice:

The motion does not put forward new arguments to substantiate the prayer for
reconsideration of this Court’s Decision except for the sole contention that the transaction
speaks for itself, i.e., res ipsa loquitor. Nonetheless, even a perusal of the arguments of
UFE-DFA-KMU in its petition and memorandum in consideration of the point heretofore
raised will not convince us to change our disposition of the question of unfair labor
practice. UFE-DFA-KMU argues therein that Nestlé’s "refusal to bargain on a very
important CBA economic provision constitutes unfair labor practice."23 It explains that
Nestlé set as a precondition for the holding of collective bargaining negotiations the
non-inclusion of the issue of Retirement Plan. In its words, "respondent Nestlé Phils., Inc.
insisted that the Union should first agree that the retirement plan is not a bargaining issue
before respondent Nestlé would agree to discuss other issues in the CBA."24 It then
concluded that "the Court of Appeals committed a legal error in not ruling that respondent
company is guilty of unfair labor practice. It also committed a legal error in failing to award
damages to the petitioner for the ULP committed by the respondent."25

We are unconvinced still.

The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code, as
amended, which state –

ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively
means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours, of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any concession.

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 of conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the
parties.

Obviously, the purpose of collective bargaining is the reaching of an agreement resulting

in a contract binding on the parties; but the failure to reach an agreement after
negotiations have continued for a reasonable period does not establish a lack of good
faith. The statutes invite and contemplate a collective bargaining contract, but they do not
compel one. The duty to bargain does not include the obligation to reach an agreement.

The crucial question, therefore, of whether or not a party has met his statutory duty to
bargain in good faith typically turns on the facts of the individual case. As we have said,
there is no per se test of good faith in bargaining. Good faith or bad faith is an inference to
be drawn from the facts. To some degree, the question of good faith may be a question of
credibility. The effect of an employer’s or a union’s individual actions is not the test of
good-faith bargaining, but the impact of all such occasions or actions, considered as a
whole, and the inferences fairly drawn therefrom collectively may offer a basis for the
finding of the NLRC.26

For a charge of unfair labor practice to prosper, it must be shown that Nestlé was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings, or grave anxiety resulted x x x"27 in disclaiming unilateral grants as
proper subjects in their collective bargaining negotiations. While the law makes it an
obligation for the employer and the employees to bargain collectively with each other,
such compulsion does not include the commitment to precipitately accept or agree to the
proposals of the other. All it contemplates is that both parties should approach the
negotiation with an open mind and make reasonable effort to reach a common ground of
agreement.
Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May
2001 written by Nestlé where the latter laid down its position that "unilateral grants,
one-time company grants, company-initiated policies and programs, which include, but
are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA negotiations and therefore
shall be excluded therefrom." But as we have stated in this Court’s Decision, said letter is
not tantamount to refusal to bargain. In thinking to exclude the issue of Retirement Plan
from the CBA negotiations, Nestlé, cannot be faulted for considering the same benefit as
unilaterally granted, considering that eight out of nine bargaining units have allegedly
agreed to treat the Retirement Plan as a unilaterally granted benefit. This is not a case
where the employer exhibited an indifferent attitude towards collective bargaining,
because the negotiations were not the unilateral activity of the bargaining representative.
Nestlé’s desire to settle the dispute and proceed with the negotiation being evident in its
cry for compulsory arbitration is proof enough of its exertion of reasonable effort at
good-faith bargaining.

In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The
corporation simply wanted to exclude the Retirement Plan from the issues to be taken up
during CBA negotiations, on the postulation that such was in the nature of a unilaterally
granted benefit. An employer’s steadfast insistence to exclude a particular substantive
provision is no different from a bargaining representative’s perseverance to include one
that they deem of absolute necessity. Indeed, an adamant insistence on a bargaining
position to the point where the negotiations reach an impasse does not establish bad
faith.[fn24 p.10] It is but natural that at negotiations, management and labor adopt
positions or make demands and offer proposals and counter-proposals. On account of the
importance of the economic issue proposed by UFE-DFA-KMU, Nestle could have
refused to bargain with the former – but it did not. And the management’s firm stand
against the issue of the Retirement Plan did not mean that it was bargaining in bad faith. It
had a right to insist on its position to the point of stalemate.

The foregoing things considered, this Court replicates below its clear disposition of the
issue:

The concept of "unfair labor practice" is defined by the Labor Code as:

ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND PROCEDURE FOR

PROSECUTION THEREOF. – Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and
hinder the promotion of healthy and stable labor-management relations.

x x x x.
The same code likewise provides the acts constituting unfair labor practices committed by
employers, to wit:

ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. – It shall be unlawful for an

employer to commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;

(b) To require as a condition of employment that a person or an employee shall not join a
labor organization or shall withdraw from one to which he belongs;

(c) To contract out services or functions being performed by union members when such
will interfere with, restrain or coerce employees in the exercise of their right to
self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation or administration
of any labor organization, including the giving of financial or other support to it or its
organizers or supporters;

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
Nothing in this Code or in any other law shall stop the parties from requiring membership
in a recognized collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing of the
collective bargaining agreement.

Employees of an appropriate collective bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a reasonable fee equivalent to
the dues and other fees paid by members of the recognized collective bargaining agent, if
such non-union members accept the benefits under the collective agreement. Provided,
That the individual authorization required under Article 242, paragraph (o) of this Code
shall not apply to the nonmembers of the recognized collective bargaining agent; [The
article referred to is 241, not 242. – CAA]

(f) To dismiss, discharge, or otherwise prejudice or discriminate against an employee for

having given or being about to give testimony under this Code;

(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or

(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and agents
of corporations associations or partnerships who have actually participated, authorized or
ratified unfair labor practices shall be held criminally liable. (Emphasis supplied.)

Herein, Nestlé is accused of violating its duty to bargain collectively when it purportedly
imposed a pre-condition to its agreement to discuss and engage in collective bargaining
negotiations with UFE-DFA-KMU.

A meticulous review of the record and pleadings of the cases at bar shows that, of the two
notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on the second that
the ground of unfair labor practice was alleged. Worse, the 7 November 2001 Notice of
Strike merely contained a general allegation that Nestlé committed unfair labor practice by
bargaining in bad faith for supposedly "setting pre-condition in the ground rules
(Retirement issue)." (Notice of Strike of 7 November 2001; Annex "C" of UFE-DFA-KMU
Position Paper; DOLE original records, p. 146.) In contrast, Nestlé, in its Position Paper,
did not confine itself to the issue of the non-inclusion of the Retirement Plan but
extensively discussed its stance on other economic matters pertaining to the CBA. It is
UFE-DFA-KMU, therefore, who had the burden of proof to present substantial evidence to
support the allegation of unfair labor practice.

A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum

(in G.R. Nos. 158930-31) will readily disclose the need for the presentation of evidence
other than its bare contention of unfair labor practice in order to make certain the propriety
or impropriety of the ULP charge hurled against Nestlé. Under Rule XIII, Sec. 4, Book V of
the Implementing Rules of the Labor Code:

x x x. In cases of unfair labor practices, the notice of strike shall as far as practicable,
state the acts complained of and the efforts to resolve the dispute amicably." (Emphasis
supplied.)

In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second
Notice of Strike nor the records of these cases substantiate a finding of unfair labor
practice. It is not enough that the union believed that the employer committed acts of
unfair labor practice when the circumstances clearly negate even a prima facie showing to
warrant such a belief. (Tiu v. National Labor Relations Commission, G.R. No. 123276, 18
August 1997, 277 SCRA 681, 688.)

Employers are accorded rights and privileges to assure their self-determination and
independence and reasonable return of capital. (Capitol Medical Center, Inc. v. Meris,
G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges
comprises the so-called management prerogatives. (Capitol Medical Center, Inc. v. Meris,
G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) In this connection, the rule is
that good faith is always presumed. As long as the company’s exercise of the same is in
good faith to advance its interest and not for purpose of defeating or circumventing the
rights of employees under the law or a valid agreement, such exercise will be upheld.
(Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA
125, 136.)

There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking

Corporation Employees Union v. National Labor Relations Commission, G.R. No. 125038,
6 November 1997, 281 SCRA 509, 518.) Good faith or bad faith is an inference to be drawn
from the facts. (Hongkong Shanghai Banking Corporation Employees Union v. National
Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.)
Herein, no proof was presented to exemplify bad faith on the part of Nestlé apart from
mere allegation. Construing arguendo that the content of the aforequoted letter of 29 May
2001 laid down a pre-condition to its agreement to bargain with UFE-DFA-KMU, Nestlé’s
inclusion in its Position Paper of its proposals affecting other matters covered by the CBA
negates the claim of refusal to bargain or bargaining in bad faith. Accordingly, since
UFE-DFA-KMU failed to proffer substantial evidence that would overcome the legal
presumption of good faith on the part of Nestlé, the award of moral and exemplary
damages is unavailing.

As to the jurisdiction of the DOLE Secretary under the amended Notice of Strike:

This Court is not convinced by the argument raised by UFE-DFA-KMU that the DOLE
Secretary should not have gone beyond the disagreement on the ground rules of the CBA
negotiations. The union doggedly asserts that the entire labor dispute between herein
parties concerns only the ground rules.

Lest it be forgotten, it was UFE-DFA-KMU which first alleged a bargaining deadlock as the
basis for the filing of its Notice of Strike; and at the time of the filing of the first Notice of
Strike, several conciliation conferences had already been undertaken where both parties
had already exchanged with each other their respective CBA proposals. In fact, during the
conciliation meetings before the NCMB, but prior to the filing of the notices of strike, the
parties had already delved into matters affecting the meat of the collective bargaining
agreement.

The Secretary of the DOLE simply relied on the Notices of Strike that were filed by
UFE-DFA-KMU as stated in her Order of 08 March 2002, to wit:

x x x The records disclose that the Union filed two Notices of Strike. The First is dated
October 31, 2001 whose grounds are cited verbatim hereunder:

"A. Bargaining Deadlock

1. Economic issues (specify)

1. Retirement

2. Panel Composition
3. Costs and Attendance

4. CBA"

The second Notice of Strike is dated November 7, 2001 and the cited ground is like quoted
verbatim below:

"B. Unfair Labor Practices (specify)

Bargaining in bad faith –

Setting pre-condition in the ground rules (Retirement issue)"

Nowhere in the second Notice of Strike is it indicated that this Notice is an amendment to
and took the place of the first Notice of Strike. In fact, our Assumption of Jurisdiction Order
dated November 29, 2001 specifically cited the two (2) Notices of Strike without any
objection on the part of the Union x x x.29

Had the parties not been at the stage where the substantive provisions of the proposed
CBA had been put in issue, the union would not have based thereon its initial notice to
strike. This Court maintains its original position in the Decision that, based on the Notices
of Strike filed by UFE-DFA-KMU, the Secretary of the DOLE rightly decided on matters of
substance. That the union later on changed its mind is of no moment because to give
premium to such would make the legally mandated discretionary power of the Dole
Secretary subservient to the whims of the parties.

As to the point of clarification on the resumption of negotiations respecting the

Retirement Plan:

As for the supposed confusion or uncertainty of the dispositive part of this Court’s
Decision, Nestle moves for clarification of the statement – "The parties are directed to
resume negotiations respecting the Retirement Plan and to take action consistent with the
discussion hereinabove set forth. No costs." The entire fallo of this Court’s Decision reads:

WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seeking that
Nestlé be declared to have committed unfair labor practice in allegedly setting a
precondition to bargaining is DENIED. The Petition in G.R. No. 158944-45, however, is
PARTLY GRANTED in that we REVERSE the ruling of the Court of Appeals in CA G.R.
SP No. 69805 in so far as it ruled that the Secretary of the DOLE gravely abused her
discretion in failing to confine her assumption of jurisdiction power over the ground rules of
the CBA negotiations; but the ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective bargaining negotiations between
UFE-DFA-KMU and Nestlé is AFFIRMED. The parties are directed to resume negotiations
respecting the Retirement Plan and to take action consistent with the discussions
hereinabove set forth. No costs.
Nestle interprets the foregoing as an order for the parties to resume negotiations
by themselves respecting the issue of retirement benefits due the employees of the
Cabuyao Plant. Otherwise stated, Nestle posits that the dispositive part of the Decision
directs the parties to submit to a voluntary mode of dispute settlement.

A read-through of this Court’s Decision reveals that the ambiguity is more ostensible than
real. This Court’s Decision of 22 August 2006 designated marked boundaries as to the
implications of the assailed Orders of the Secretary of the DOLE. We said therein that 1)
the Retirement Plan is still a valid issue for herein parties’ collective bargaining
negotiations; 2) the Court of Appeals committed reversible error in limiting to the issue of
the ground rules the scope of the power of the Secretary of Labor to assume jurisdiction
over the subject labor dispute; and 3) Nestlé is not guilty of unfair labor practice. Nowhere
in our Decision did we require parties to submit to negotiate by themselves the tenor of the
retirement benefits of the concerned employees of Nestlé, precisely because the
Secretary of the DOLE had already assumed jurisdiction over the labor dispute subject of
herein petitions. Again, we spell out what encompass the Secretary’s assumption of
jurisdiction power. The Secretary of the DOLE has been explicitly granted by Article 263(g)
of the Labor Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, and
decide the same accordingly. And, as a matter of necessity, it includes questions
incidental to the labor dispute; that is, issues that are necessarily involved in the dispute
itself, and not just to that ascribed in the Notice of Strike or otherwise submitted to him for
resolution. In the case at bar, the issue of retirement benefits was specifically what was
presented before the Secretary of the DOLE; hence, We reject Nestlé’s interpretation. Our
decision is crystal and cannot be interpreted any other way. The Secretary having already
assumed jurisdiction over the labor dispute subject of these consolidated petitions, the
issue concerning the retirement benefits of the concerned employees must be remanded
back to him for proper disposition.

All told, in consideration of the points afore-discussed and the fact that no substantial
arguments have been raised by either party, this Court remains unconvinced that it should
modify or reverse in any way its disposition of herein cases in its earlier Decision. The
labor dispute between the Nestle and UFE-DFA-KMU has dragged on long enough. As no
other issues are availing, let this Resolution write an ending to the protracted labor dispute
between Nestlé and UFE-DFA-KMU (Cabuyao Division).

WHEREFORE, premises considered, the basic issues of the case having been passed
upon and there being no new arguments availing, the Motion for Partial Reconsideration is
hereby DENIED WITH FINALITY for lack of merit. Let these cases be remanded to the
Secretary of the Department of Labor and Employment for proper disposition, consistent
with the discussions in this Court’s Decision of 22 August 2006 and as hereinabove set
forth. No costs.

SO ORDERED.
G.R. No. 155306 August 28, 2013

MALAYANG MANGGAGAWA NG STAYFAST PHILS., INC., PETITIONER,

vs.
NATIONAL LABOR RELATIONS COMMISSION, STAYFAST PHILIPPINES, INC./
MARIA ALMEIDA,RESPONDENTS.

DECISION

LEONARDO-DE CASTRO, J.:

This petition for Certiorari under Rule 65 of the Rules of Court seeks a review and reversal
of the Decision1 dated July 1, 2002 of the Court of Appeals in CA-G.R. SP No. 59465, which
dismissed the petition for certiorari of petitioner Malayang Mangggagawa ng Stayfast
Phils., Inc.

The Labor Arbiter and the National Labor Relations Commission (NLRC) made similar
findings of fact. Petitioner and Nagkakaisang Lakas ng Manggagawa sa Stayfast
(NLMS-Olalia) sought to be the exclusive bargaining agent of the employees of
respondent company, Stayfast Philippines, Inc. A certification election was conducted on
December 29, 1995.2 Out of the 223 valid votes cast, petitioner garnered 109 votes while
NLMS-Olalia received 112 votes and 2 votes were for "No Union."3 Thus, the Med-Arbiter
who supervised the certification election issued an Order dated January 9, 1996 certifying
NLMS-Olalia as the sole and exclusive bargaining agent of all rank and file employees of
respondent company.4

Petitioner appealed the Order of the Med-Arbiter to the Secretary of Labor and
Employment. The Secretary of Labor and Employment initially set aside the Order of the
Med-Arbiter and called for run-off election between petitioner and NLMS-Olalia. On
motion of NLMS-Olalia, however, the Secretary of Labor and Employment reconsidered
his earlier decision and restored the Med-Arbiter’s Order dated January 9, 1996. Petitioner
elevated the matter via petition for certiorari to this Court.5 The petition, docketed as G.R.
No. 125957, was dismissed in a Resolution dated January 14, 1998.6

Meanwhile, NLMS-Olalia demanded to collectively bargain with respondent company. The

latter rejected petitioner’s demand, insisting that it would negotiate a collective bargaining
agreement only with whichever union is finally certified as the sole and exclusive
bargaining agent of the workers. Nevertheless, NLMS-Olalia went on strike on April 1,
1997 until it was temporarily restrained eight days later.7

Subsequently, on June 5, 1997, petitioner filed its own notice of strike in the National
Conciliation and Mediation Board (NCMB). Respondent company opposed petitioner’s
move and filed a motion to dismiss on the ground that petitioner was not the certified
bargaining agent and therefore lacked personality to file a notice of strike.8Thereafter, the
parties were able to make concessions during the conciliation-mediation stage in the
NCMB which led petitioner to withdraw its notice of strike.9 In this connection, the NCMB
issued a Certification dated July 31, 1997 which reads:

CERTIFICATION

TO WHOM IT MAY CONCERN:

This is to certify that it appears from the "Minutes/Agreement" of

conciliation conference dated July 15, 1997, which was further confirmed
by Conciliator/Mediator Gil Caragayan[,] the Notice of Strike filed by
MMSP-Independent on June 5, 1997, against Stayfast Philippines, Inc. is
considered dropped/withdrawn from the business calendar of this office.

It is further certified that there is no new Notice of Strike filed by the same
union.

This certification is being issued upon the written request of Atty. Edgardo
R. Abaya.

July 31, 1997.

(Sgd.) LEOPOLDO B. DE JESUS

Director II10

On July 21, 1997, however, petitioner’s members staged a "sit-down strike" to dramatize
their demand for a fair and equal treatment as respondent company allegedly continued to
discriminate against them. Respondent company issued a memorandum requiring the
alleged participants in the "sit-down strike" to explain within 24 hours why they should not
be terminated or suspended from work for infraction of company rules and regulations
pertaining to unauthorized work stoppage, acts inimical to company interest, and
disregard of instruction of immediate supervisor to perform assigned task. As no one
complied with the memorandum within the 24-hour deadline, respondent company
promptly terminated the service of the participants in the "sit-down strike" on July 22, 1997.
Consequently, on July 23, 1997, petitioner staged a strike and filed a complaint for unfair
labor practice, union busting and illegal lockout against respondent company and its
General Manager, Maria Almeida, in the NLRC.11

In support of its complaint, petitioner alleged that respondents had repeatedly committed
acts of discrimination, such as the denial of the use of the company canteen for purposes
of conducting a strike vote, the constant denial of applications of petitioner’s members for
leave to attend hearings in relation to certain labor cases while similar applications of
members of the other union were approved, and the suspension of petitioner’s president
for being absent due to attendance in hearings of labor cases involving petitioner’s
members. Petitioner further claimed that the termination of about 127 of its officers and
members constituted union busting and unlawful lockout.12
For its part, respondent company claimed that petitioner lacked legal authority to go on
strike since it is a minority union. As petitioner withdrew its notice of strike during the
proceedings in the NCMB, the strike conducted by petitioner was illegal as it constituted a
wildcat strike and later became a full-blown strike on July 23, 1997. Petitioner committed
illegal acts during the strike and obstructed the free ingress and egress from respondent
company’s premises.13

On April 27, 1999, the Labor Arbiter rendered a Decision which ruled that, while petitioner
may file a notice of strike on behalf of its members, petitioner failed to cite any instance of
discrimination or harassment when it filed its notice of strike on June 5, 1997 and the
incidents mentioned as discriminatory occurred after the filing of the said notice. Moreover,
assuming the strike was legal at the beginning, it became illegal when petitioner
committed acts prohibited under Article 264(e) of the Labor Code, such as acts of violence,
coercion and intimidation and obstruction of the free ingress to and egress from
respondent company’s premises. Also, petitioner was supposed to have made a
self-imposed prohibition to stage a strike when it submitted its labor dispute with
respondent company for compulsory arbitration in the afternoon of July 23, 1997. Yet,
petitioner continued with its strike. For these reasons, the Labor Arbiter dismissed the
petition.14 The dispositive portion of the Labor Arbiter’s Decision dated April 27, 1999
reads:

PREMISES CONSIDERED, the complaint is hereby dismissed for lack of merit.15

Petitioner appealed but, in a Resolution dated January 31, 2000, the NLRC upheld the
Labor Arbiter’s Decision. According to the NLRC, the actuations of petitioner were
patently illegal because the sit-down strike staged on July 21, 1997 was made barely a
week after petitioner withdrew its notice of strike, with prejudice, on account of the
concessions agreed upon by the parties. Petitioner filed no new notice of strike that could
have supported its charges of discriminatory acts and unfair labor practice. Moreover, no
evidence was presented to establish such charges. Also, petitioner’s members were given
the opportunity to explain their violation of respondent company’s rules on unauthorized
work stoppage, acts inimical to company interest and disregard of instruction of immediate
supervisor to perform assigned task. Thus, the NLRC dismissed petitioner’s appeal.16 The
dispositive portion of the NLRC’s Resolution dated January 31, 2000 reads:

WHEREFORE, premises considered, the decision under review is AFFIRMED, and

complainants’ appeal, DISMISSED, for lack of merit.17

Petitioner filed a motion for reconsideration but the NLRC denied it in a Resolution dated
April 10, 2000.18

Petitioner filed a petition for certiorari in the Court of Appeals, docketed as CA-G.R. SP No.
59465, on the following grounds:
(A) RESPONDENT NLRC COMMITTED GROSS AND GRAVE ABUSE OF DISCRETION
WHEN IT UPHELD THE LABOR ARBITER’S DECISION.

(B) COMPLAINANTS/APPELLANTS WHOSE TERMINATION RESULTED FROM THE

UNFAIR LABOR PRACTICE[,] UNION-BUSTING AND UNLAWFUL LOCKOUT OF
HEREIN RESPONDENT ARE ENTITLED TO REINSTATEMENT WITH FULL
BACKWAGES.

(C) COMPLAINANTS, BY REASON OF THE ARBITRARY ACTION IN WANTON

DISREGARD OF THE LEGAL RIGHTS OF HEREIN [COMPLAINANTS,] ARE ENTITLED
TO DAMAGES AND ATTORNEY’S FEES.19

In a Decision dated July 1, 2002, the Court of Appeals found that petitioner was seeking a
review of the findings of fact and conclusion of the Labor Arbiter which was sustained by
the NLRC. The Court of Appeals found no cogent reason to indulge petitioner. It applied
the rule that findings of fact made by the Labor Arbiter and affirmed by the NLRC are
considered by the appellate court as binding if supported by substantial evidence. The
Court of Appeals ruled that the NLRC Resolution dated January 31, 2000 was supported
by justifiable reason and cannot be faulted with grave abuse of discretion. Petitioner failed
to establish that the NLRC committed grave abuse of discretion. Moreover, a petition for
certiorari is not used to correct a lower tribunal’s appreciation of evidence and findings of
fact. Thus, the Court of Appeals dismissed the petition. The dispositive portion of the
Court of Appeals’ Decision dated July 1, 2002 reads:

WHEREFORE, foregoing premises considered, the Petition, having no merit, in fact and
in law, is hereby DENIED DUE COURSE and ORDERED DISMISSED. Resultantly, the
assailed Resolution[s] are AFFIRMED, with costs to Petitioner.20

Hence, this petition for certiorari21 under Rule 65 of the Rules of Court.

According to petitioner, it "interposes appeal on the judgment of the Honorable Justices of

the Court of Appeals" on the following grounds:

(1) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the rulings of the NLRC and
disregarded the constitutional protection of labor as well as Article 248 (e) and Article 263
of the Labor Code.

(2) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the decision of the NLRC that
the termination of complainants/appellants were valid and corollary thereto no
reinstatement[,] backwages, damages and attorney’s fees were awarded.22

In discussing the above grounds, petitioner claims that the discriminatory acts of
respondent company and its General Manager against petitioner’s members constituted
unfair labor practice under Article 248(e) of the Labor Code, as amended. The termination
of employment of petitioner’s 127 officers and members constituted union-busting and
unlawful lockout. As the said officers and members were unlawfully dismissed from
employment, they are entitled to reinstatement with full backwages. The arbitrary action of
respondent company and its General Manager wantonly disregarded the legal rights of
petitioner’s officers and members thereby entitling said officers and members to damages
and attorney’s fees.23

Respondent company and its General Manager, for their part, question the timeliness of
the petition which was filed 52 days after petitioner’s receipt of the Decision of the Court of
Appeals. They point out that petitioner should have filed a petition for review under Rule
45 of the Rules of Court within 15 days from receipt of a copy of the Court of Appeals
Decision. Respondent company and its General Manager also argue that the sit-down
strike which subsequently became a full blown strike conducted by petitioner was illegal
as it had previously withdrawn its notice of strike. The illegality of the strike was
compounded by the commission of prohibited acts like the blocking of the entry and exit
points of respondent company’s premises. Also, petitioner’s officers and employees were
afforded due process before they were dismissed as they were issued a memorandum
requiring them to explain their participation in the illegal sit-down strike but they simply
ignored the said memorandum.24

The petition fails for many reasons.

First, this petition for certiorari is a wrong remedy.

A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may
be resorted to only in the absence of appeal or any plain, speedy and adequate remedy in
the ordinary course of law.25 Contrary to petitioner’s claim in the Jurisdictional Facts
portion of its petition that there was no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law other than this petition for certiorari, the right
recourse was to appeal to this Court in the form of a petition for review on certiorari under
Rule 45 of the Rules of Court, Section 1 of which provides:

Section 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari
from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the
Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by
law, may file with the Supreme Court a verified petition for review on certiorari. The
petition may include an application for a writ of preliminary injunction or other provisional
remedies and shall raise only questions of law, which must be distinctly set forth. The
petitioner may seek the same provisional remedies by verified motion filed in the same
action or proceeding at any time during its pendency.

For purposes of appeal, the Decision dated July 1, 2002 of the Court of Appeals was a final
judgment as it denied due course to, and dismissed, the petition. Thus, the Decision
disposed of the petition of petitioner in a manner that left nothing more to be done by the
Court of Appeals in respect to the said case. Thus, petitioner should have filed an appeal
by petition for review on certiorari under Rule 45, not a petition for certiorari under Rule 65,
in this Court. Where the rules prescribe a particular remedy for the vindication of rights,
such remedy should be availed of.

The proper remedy to obtain a reversal of judgment on the merits, final order or resolution
is appeal. This holds true even if the error ascribed to the court rendering the judgment is
its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof,
or grave abuse of discretion in the findings of fact or of law set out in the decision, order or
resolution. The existence and availability of the right of appeal prohibits the resort to
certiorari because one of the requirements for the latter remedy is that there should be no
appeal.26

Petitioner cannot mask its failure to file an appeal by petition for review under Rule 45 of
the Rules of Court by the mere expedient of conjuring grave abuse of discretion to avail of
a petition for certiorari under Rule 65. The error of petitioner becomes more manifest in
light of the following pronouncement in Balayan v. Acorda27:

It bears emphasis that the special civil action for certiorari is a limited form of review and is
a remedy of last recourse. The Court has often reminded members of the bench and bar
that this extraordinary action lies only where there is no appeal nor plain, speedy and
adequate remedy in the ordinary course of law. It cannot be allowed when a party to a
case fails to appeal a judgment despite the availability of that remedy, certiorari not being
a substitute for a lapsed or lost appeal. Where an appeal is available, certiorari will not
prosper, even if the ground therefor is grave abuse of discretion. x x x. (Citations omitted.)

Moreover, certiorari is not and cannot be made a substitute for an appeal where the latter
remedy is available but was lost through fault or negligence.28 In this case, petitioner
received the Decision dated July 1, 2002 on August 2, 2002 and, under the rules,29 had until
August 19, 2002 to file an appeal by way of a petition for review in this Court. Petitioner let
this period lapse without filing an appeal and, instead, filed this petition for certiorari on
October 1, 2002.

Second, even assuming that a petition for certiorari is the correct remedy in this case,
petitioner failed to comply with the requirement of a prior motion for reconsideration.

As a general rule, a motion for reconsideration is a prerequisite for the availment of a

petition for certiorari under Rule 65.30 The filing of a motion for reconsideration before
resort to certiorari will lie is intended to afford the public respondent an opportunity to
correct any actual or fancied error attributed to it by way of re-examination of the legal and
factual aspects of the case.31 While there are well recognized exceptions to this rule,32 this
petition is not covered by any of those exceptions. The Court of Appeals was not given
any opportunity either to rectify whatever error it may have made or to address the
ascription and aspersion of grave abuse of discretion thrown at it by petitioner. Nor did
petitioner offer any compelling reason to warrant a deviation from the rule. The instant
petition for certiorari is therefore fatally defective.

Third, petitioner was not able to establish its allegation of grave abuse of discretion on the
part of the Court of Appeals.

Where a petition for certiorari under Rule 65 of the Rules of Court alleges grave abuse of
discretion, the petitioner should establish that the respondent court or tribunal acted in a
capricious, whimsical, arbitrary or despotic manner in the exercise of its jurisdiction as to
be equivalent to lack of jurisdiction.33 This is so because "grave abuse of discretion" is
well-defined and not an amorphous concept that may easily be manipulated to suit one’s
purpose. In this connection, Yu v. Judge Reyes-Carpio34 is instructive:

The term "grave abuse of discretion" has a specific meaning. An act of a court or tribunal
can only be considered as with grave abuse of discretion when such act is done in a
"capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction." The
abuse of discretion must be so patent and gross as to amount to an "evasion of a positive
duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion and hostility." Furthermore, the use of a petition for certiorari
is restricted only to "truly extraordinary cases wherein the act of the lower court or
quasi-judicial body is wholly void." From the foregoing definition, it is clear that the special
civil action of certiorari under Rule 65 can only strike an act down for having been done
with grave abuse of discretion if the petitioner could manifestly show that such act was
patent and gross. x x x. (Citations omitted.)

In this case, nowhere in the petition did petitioner show that the issuance of the Decision
dated July 1, 2002 of the Court of Appeals was patent and gross that would warrant
striking it down through a petition for certiorari. Aside from a general statement in the
Jurisdictional Facts portion of the petition and the sweeping allegation of grave abuse of
discretion in the general enumeration of the grounds of the petition,35 petitioner failed to
substantiate its imputation of grave abuse of discretion on the part of the Court of Appeals.
No argument was advanced to show that the Court of Appeals exercised its judgment
capriciously, whimsically, arbitrarily or despotically by reason of passion and hostility.
Petitioner did not even discuss how or why the conclusions of the Court of Appeals were
made with grave abuse of discretion. Instead, petitioner limited its discussion on its
version of the case, which had been already rejected both by the Labor Arbiter and the
NLRC. Thus, petitioner failed in its duty to demonstrate with definiteness the grave abuse
of discretion that would justify the proper availment of a petition for certiorari under Rule 65
of the Rules of Court.

Fourth, petitioner essentially questioned the factual findings of the Labor Arbiter and the
NLRC. Petitioner cannot properly do that in a petition for certiorari.
1âwphi1
Petitioner used the Discussion/Arguments portion of its petition to refute the findings of
fact of the Labor Arbiter which was upheld by the NLRC. In particular, petitioner reiterated
its position that respondent company and its General Manager committed discriminatory
acts against petitioner’s members which constituted unfair labor practice; that the
termination of employment of petitioner’s officers and members was a case of
union-busting and unlawful lockout; and, that the said officers and members were
unlawfully dismissed from employment and are therefore entitled to reinstatement with full
backwages, plus damages and attorney’s fees.36 For petitioner to question the identical
findings of the Labor Arbiter and the NLRC is to raise a question of fact. However, it is
settled that questions of fact cannot be raised in an original action for certiorari.37 Only
established or admitted facts can be considered.38 Romy’s Freight Service v.
Castro39 explains the rationale of this rule:

The Supreme Court is not a trier of facts, more so in the consideration of the extraordinary
writ of certiorari where neither questions of fact nor of law are entertained, but only
questions of lack or excess of jurisdiction or grave abuse of discretion. The sole object of
the writ is to correct errors of jurisdiction or grave abuse of discretion. The phrase ‘grave
abuse of discretion’ has a precise meaning in law, denoting abuse of discretion "too patent
and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the
duty enjoined or act in contemplation of law, or where the power is exercised in an
arbitrary and despotic manner by reason of passion and personal hostility." It does not
encompass an error of law. Nor does it include a mistake in the appreciation of the
contending parties’ respective evidence or the evaluation of their relative weight.
(Citations omitted.)

Fifth, considering that petitioner basically presented an issue of fact, its petition for
certiorari crumbles in view of the identical findings of the Labor Arbiter and the NLRC
which were further upheld by the Court of Appeals.

The Court of Appeals correctly ruled that findings of fact made by Labor Arbiters and
affirmed by the NLRC are not only entitled to great respect, but even finality, and are
considered binding if the same are supported by substantial evidence.40 That ruling is
based on established case law.41 Furthermore, in arriving at the said ruling, the Court of
Appeals even reviewed the rationale of the Labor Arbiter’s decision and was convinced
that there was justifiable reason for the NLRC to uphold the same.42 This Court finds no
compelling reason to rule otherwise.

Sixth, even on the merits, the case of petitioner has no leg to stand on.

Petitioner’s case rests on the alleged discriminatory acts of respondent company against
petitioner’s officers and members. However, both the Labor Arbiter and the NLRC held
that there was no sufficient proof of respondent company’s alleged discriminatory
acts.43 Thus, petitioner’s unfair labor practice, union-busting and unlawful lockout claims
do not hold water. Moreover, the established facts as found by the NLRC are as follows:
the "sit-down strike" made by petitioner’s officers and members on July 21, 1997 was in
violation of respondent company’s rules, and petitioner’s officers and members ignored
the opportunity given by respondent company for them to explain their misconduct, which
resulted in the termination of their employment.44 The Court of Appeals ruled that the said
findings were supported by substantial evidence.45 This Court finds that such ruling of the
appellate court is not grave abuse of discretion, nor could it be considered wrong.

In sum, there is an abundance of reasons, both procedural and substantive, which are all
fatal to petitioner’s cause. In contrast, the instant petition for certiorari suffers from an
acute scarcity of legal and factual support.

WHEREFORE, the petition is hereby DISMISSED.

G.R. No. 179146 July 23, 2013

HOLY CHILD CATHOLIC SCHOOL, Petitioner,

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

DECISION

PERALTA, J.:

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

The factual antecedents are as follows:

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

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

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

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

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

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

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

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

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

It will be recalled that in the U.P. case, there were two contending unions, the
Organization of Non-Academic Personnel of U.P. (ONAPUP) and All U.P. Workers Union
composed of both academic and nonacademic personnel of U.P. ONAPUP sought the
conduct of certification election among the rank-and-file non-academic personnel only
while the all U.P. Workers Union sought the conduct of certification election among all of
U.P.’s rank-and-file employees covering academic and nonacademic personnel. While the
Supreme Court ordered a separate bargaining unit for the U.P. academic personnel, the
Court, however, did not order them to organize a separate labor organization among
themselves. The All U.P. Workers Union was not directed to divest itself of its academic
personnel members and in fact, we take administrative notice that the All U.P. Workers
Union continue to exist with a combined membership of U.P. academic and non-academic
personnel although separate bargaining agreements is sought for the two bargaining units.
Corollary, private respondent can continue to exist as a legitimate labor organization with
the combined teaching and non-teaching personnel in its membership and representing
both classes of employees in separate bargaining negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby
REVERSED and SET ASIDE. In lieu thereof, a new order is hereby issued directing the
conduct of two certification elections, one among the non-teaching personnel of Holy
Child Catholic School, and the other, among the teaching personnel of the same school,
subject to the usual pre-election conferences and inclusion-exclusion proceedings, with
the following choices:

A. Certification Election Among Petitioner’s Teaching Personnel:

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

2. No Union.

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

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

2. No Union.

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

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

On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging that
Hon. Helen F. Dacanay of the Industrial Relations Division of the DOLE was set to
implement the SOLE Decision when it received a summons and was directed to submit a
certified list of teaching and non-teaching personnel for the last three months prior to the
issuance of the assailed Decision.26 Acting thereon, on August 5, 2003, the CA issued the
TRO and ordered private respondent to show cause why the writ of preliminary injunction
should not be granted.27 Subsequently, a Manifestation and Motion28 was filed by private
respondent, stating that it repleads by reference the arguments raised in its Comment and
that it prays for the immediate lifting of the TRO and the denial of the preliminary injunction.
The CA, however, denied the manifestation and motion on November 21, 200329 and, upon
motion of petitioner,30 granted the preliminary injunction on April 21, 2005.31 Thereafter,
both parties filed their respective Memorandum.32
On April 18, 2007, the CA eventually dismissed the petition. As to the purported
commingling of managerial, supervisory, and rank-and-file employees in private
respondent’s membership, it held that the Toyota ruling is inapplicable because the
vice-principals, department head, and coordinators are neither supervisory nor
managerial employees. It reasoned:

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

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

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

I.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT

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

II

THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING

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

We deny.

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

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

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

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

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

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

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

self-organization and to form, join or assist labor organizations of their own choosing for
the purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual
aid or protection. Individuals employed as supervisors shall not be eligible for membership
in a labor organization of employees under their supervision but may form separate
organizations of their own. (Emphasis supplied)

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

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

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

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

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

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

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

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

Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as
follows:

Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own (Emphasis supplied)

Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any
violation of the prohibition would bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus
Rules) which supplied the deficiency by introducing the following amendment to Rule II
(Registration of Unions):

Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not
be eligible for membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own; Provided, that those
supervisory employees who are included in an existing rank-and-file bargaining unit, upon
the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)

and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules,
viz.;

Sec. 1. Where to file. - A petition for certification election may be filed with the Regional
Office which has jurisdiction over the principal office of the employer. The petition shall be
in writing and under oath.

Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested
to bargain collectively, may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among others:

xxxx

(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards. (Emphasis supplied)

By that provision, any questioned mingling will prevent an otherwise legitimate and duly
registered labor organization from exercising its right to file a petition for certification
election.

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

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

In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not,
prior to purging itself of its supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot possess the requisite personality to
file a petition for certification election. (Emphasis supplied)

In Dunlop, in which the labor organization that filed a petition for certification election was
one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long as
it counted rank-and-file employees among its members.

It should be emphasized that the petitions for certification election involved in Toyota and
Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the
1989 Rules was applied in both cases.

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

Rule XI
Certification Elections

xxxx

Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath
and shall contain, among others, the following: x x x (c) The description of the bargaining
unit."

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the
1997 Amended Omnibus Rules, although the specific provision involved therein was only
Sec. 1, Rule VI, to wit:

Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or national

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

All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.

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

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

In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File
Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not
require a local or chapter to provide a list of its members, it would be improper for the
DOLE to deny recognition to said local or chapter on account of any question pertaining to
its individual members.

More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in 1999
against a rank-and-file labor organization on the ground of mixed membership: the Court
therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of
disqualified employees is not among the grounds for cancellation, unless such inclusion is
due to misrepresentation, false statement or fraud under the circumstances enumerated
in Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.46

When a similar issue confronted this Court close to three years later, the above ruling was
substantially quoted in Samahang Manggagawa sa Charter Chemical Solidarity of Unions
in the Philippines for Empowerment and Reforms (SMCC-Super) v. Charter Chemical and
Coating Corporation.47 In unequivocal terms, We reiterated that the alleged inclusionof
supervisory employees in a labor organization seeking to represent the bargaining unit of
rank-and-file employees does not divest it of its status as a legitimate labor organization.48

Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the
instant case. The petitions for certification election involved in Toyota and Dunlop were
filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules
and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) was
applied. In contrast, D.O. No. 9 is applicable in the petition for certification election of
private respondent as it was filed on May 31, 2002.

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

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

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

The amendments to the Labor Code and its implementing rules have buttressed that
policy even more.49

Further, the determination of whether union membership comprises managerial and/or

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

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

We disagree.

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

Article 212(g) of the Labor Code defines a labor organization as "any union or association
of employees which exists in whole or in part for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment." Upon
compliance with all the documentary requirements, the Regional Office or Bureau shall
issue in favor of the applicant labor organization a certificate indicating that it is included in
the roster of legitimate labor organizations. Any applicant labor organization shall acquire
legal personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration.53

In case of alleged inclusion of disqualified employees in a union, the proper procedure for
an employer like petitioner is to directly file a petition for cancellation of the union’s
certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended.54 To reiterate,
private respondent, having been validly issued a certificate of registration, should be
considered as having acquired juridical personality which may not be attacked collaterally.

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

As the SOLE correctly observed, petitioner failed to comprehend the full import of Our
ruling in U.P. It suffices to quote with approval the apt disposition of the SOLE when she
denied petitioner’s motion for reconsideration:
Petitioner likewise claimed that we erred in interpreting the decision of the Supreme Court
in U.P. v. Ferrer-Calleja, supra. According to petitioner, the Supreme Court stated that the
non-academic rank-andfile employees of the University of the Philippines shall constitute
a bargaining unit to the exclusion of the academic employees of the institution. Hence,
petitioner argues, it sought the creation of separate bargaining units, namely: (1)
petitioner’s teaching personnel to the exclusion of non-teaching personnel; and (2)
petitioner’s non-teaching personnel to the exclusion of teaching personnel.

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

A bargaining unit is a group of employees sought to be represented by a petitioning union.

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

The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to

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

In the same manner, the teaching and non-teaching personnel of petitioner school must
form separate bargaining units. Thus, the order for the conduct of two separate
1âwphi1

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

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

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

x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in

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

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

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

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

SO ORDERED.
G.R. No. 162943 December 6, 2010

EMPLOYEES UNION OF BAYER PHILS., FFW and JUANITO S. FACUNDO, in his

capacity as President,Petitioners,
vs.
BAYER PHILIPPINES, INC., DIETER J. LONISHEN (President), ASUNCION
AMISTOSO (HRD Manager), AVELINA REMIGIO AND ANASTACIA
VILLAREAL, Respondents.

DECISION

VILLARAMA, JR., J.:

This petition for review on certiorari assails the Decision1 dated December 15, 2003 and
Resolution2 dated March 23, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 73813.

Petitioner Employees Union of Bayer Philippines3 (EUBP) is the exclusive bargaining

agent of all rank-and-file employees of Bayer Philippines (Bayer), and is an affiliate of the
Federation of Free Workers (FFW). In 1997, EUBP, headed by its president Juanito S.
Facundo (Facundo), negotiated with Bayer for the signing of a collective bargaining
agreement (CBA). During the negotiations, EUBP rejected Bayer’s 9.9% wage-increase
proposal resulting in a bargaining deadlock. Subsequently, EUBP staged a strike,
prompting the Secretary of the Department of Labor and Employment (DOLE) to assume
jurisdiction over the dispute.

In November 1997, pending the resolution of the dispute, respondent Avelina Remigio
(Remigio) and 27 other union members, without any authority from their union leaders,
accepted Bayer’s wage-increase proposal. EUBP’s grievance committee questioned
Remigio’s action and reprimanded Remigio and her allies. On January 7, 1998, the DOLE
Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA
retroactive to January 1, 1997 and to be made effective until December 31, 2001. The said
CBA4 was registered on July 8, 1998 with the Industrial Relations Division of the
DOLE-National Capital Region (NCR).5

Meanwhile, the rift between Facundo’s leadership and Remigio’s group broadened. On
August 3, 1998, barely six months from the signing of the new CBA, during a
company-sponsored seminar,6 Remigio solicited signatures from union members in
support of a resolution containing the decision of the signatories to: (1) disaffiliate from
FFW, (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP),
(3) adopt a new constitution and by-laws for the union, (4) abolish all existing officer
positions in the union and elect a new set of interim officers, and (5) authorize REUBP to
administer the CBA between EUBP and Bayer.7 The said resolution was signed by 147 of
the 257 local union members. A subsequent resolution was also issued affirming the first
resolution.8
A tug-of-war then ensued between the two rival groups, with both seeking recognition
from Bayer and demanding remittance of the union dues collected from its rank-and-file
members. On September 8, 1998, Remigio’s splinter group wrote Facundo, FFW and
Bayer informing them of the decision of the majority of the union members to disaffiliate
from FFW.9 This was followed by another letter informing Facundo, FFW and Bayer that
an interim set of REUBP executive officers and board of directors had been appointed,
and demanding the remittance of all union dues to REUBP. Remigio also asked Bayer to
desist from further transacting with EUBP. Facundo, meanwhile, sent similar requests to
Bayer10 requesting for the remittance of union dues in favor of EUBP and accusing the
company of interfering with purely union matters.11 Bayer responded by deciding not to
deal with either of the two groups, and by placing the union dues collected in a trust
account until the conflict between the two groups is resolved.12

On September 15, 1998, EUBP filed a complaint for unfair labor practice (first ULP
complaint) against Bayer for non-remittance of union dues. The case was docketed as
NLRC-NCR-Case No. 00-09-07564-98.13

EUBP later sent a letter dated November 5, 1998 to Bayer asking for a grievance
conference.14 The meeting was conducted by the management on November 11, 1998,
with all REUBP officers including their lawyers present. Facundo did not attend the
meeting, but sent two EUBP officers to inform REUBP and the management that a
preventive mediation conference between the two groups has been scheduled on
November 12, 1998 before the National Conciliation and Mediation Board (NCMB).15

Apparently, the two groups failed to settle their issues as Facundo again sent respondent
Dieter J. Lonishen two more letters, dated January 14, 199916 and September 2,
1999,17 asking for a grievance meeting with the management to discuss the failure of the
latter to comply with the terms of their CBA. Both requests remained unheeded.

On February 9, 1999, while the first ULP case was still pending and despite EUBP’s
repeated request for a grievance conference, Bayer decided to turn over the collected
union dues amounting to ₱254,857.15 to respondent Anastacia Villareal, Treasurer of
REUBP.

Aggrieved by the said development, EUBP lodged a complaint18 on March 4, 1999 against
Remigio’s group before the Industrial Relations Division of the DOLE praying for their
expulsion from EUBP for commission of "acts that threaten the life of the union."

On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint
for lack of jurisdiction.19The Arbiter explained that the root cause for Bayer’s failure to remit
the collected union dues can be traced to the intra-union conflict between EUBP and
Remigio’s group20 and that the charges imputed against Bayer should have been
submitted instead to voluntary arbitration.21 EUBP did not appeal the said decision.22
On December 14, 1999, petitioners filed a second ULP complaint against herein
respondents docketed as NLRC-RAB-IV Case No. 12-11813-99-L. Three days later,
petitioners amended the complaint charging the respondents with unfair labor practice
committed by organizing a company union, gross violation of the CBA and violation of
their duty to bargain.23 Petitioners complained that Bayer refused to remit the collected
union dues to EUBP despite several demands sent to the management.24 They also
alleged that notwithstanding the requests sent to Bayer for a renegotiation of the last two
years of the 1997-2001 CBA between EUBP and Bayer, the latter opted to negotiate
instead with Remigio’s group.25

On even date, REUBP and Bayer agreed to sign a new CBA. Remigio immediately
informed her allies of the management’s decision.26

In response, petitioners immediately filed an urgent motion for the issuance of a

restraining order/injunction27 before the National Labor Relations Commission (NLRC) and
the Labor Arbiter against respondents. Petitioners asserted their authority as the exclusive
bargaining representative of all rank-and-file employees of Bayer and asked that a
temporary restraining order be issued against Remigio’s group and Bayer to prevent the
employees from ratifying the new CBA. Later, petitioners filed a second amended
complaint28 to include in its complaint the issue of gross violation of the CBA for violation of
the contract bar rule following Bayer’s decision to negotiate and sign a new CBA with
Remigio’s group.

Meanwhile, on January 26, 2000, the Regional Director of the Industrial Relations Division
of DOLE issued a decision dismissing the issue on expulsion filed by EUBP against
Remigio and her allies for failure to exhaust reliefs within the union and ordering the
conduct of a referendum to determine which of the two groups should be recognized as
union officers.29 EUBP seasonably appealed the said decision to the Bureau of Labor
Relations (BLR).30 On June 16, 2000, the BLR reversed the Regional Director’s ruling and
ordered the management of Bayer to respect the authority of the duly-elected officers of
EUBP in the administration of the prevailing CBA.31

Unfortunately, the said BLR ruling came late since Bayer had already signed a new
CBA32 with REUBP on February 21, 2000. The said CBA was eventually ratified by majority
of the bargaining unit.33

On June 2, 2000, Labor Arbiter Waldo Emerson R. Gan dismissed EUBP’s second ULP
complaint for lack of jurisdiction.34 The Labor Arbiter explained the dismissal as follows:

All told, were it not for the fact that there were two (2) [groups] of employees, the Union led
by its President Juanito Facundo and the members who decided to disaffiliate led by Ms.
Avelina Remigio, claiming to be the rightful representative of the rank and file employees,
the Company would not have acted the way it did and the Union would not have filed the
instant case.
Clearly then, as the case involves intra-union disputes, this Office is bereft of any
jurisdiction pursuant to Article 226 of the Labor Code, as amended, which provides
pertinently in part, thus:

"Bureau of Labor Relations – The Bureau of Labor Relations and the Labor Relations
Divisions in the regional offices of the Department of Labor and Employment shall have
original and exclusive authority to act, at their own initiative or upon request of either or
both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces whether
agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of grievance
procedure and/or voluntary arbitration."

Specifically, with respect to the union dues, the authority is the case of Cebu Seamen’s
Association[,] Inc. vs. Ferrer-Calleja, (212 SCRA 51), where the Supreme Court held that
when the issue calls for the determination of which between the two groups within a union
is entitled to the union dues, the same cannot be taken cognizance of by the NLRC.

xxxx

WHEREFORE, premises considered, the instant complaint is hereby DISMISSED on the

ground of lack of jurisdiction.

SO ORDERED.35

On June 28, 2000, the NLRC resolved to dismiss36 petitioners’ motion for a restraining
order and/or injunction stating that the subject matter involved an intra-union dispute, over
which the said Commission has no jurisdiction.37

Aggrieved by the Labor Arbiter’s decision to dismiss the second ULP complaint,
petitioners appealed the said decision, but the NLRC denied the appeal.38 EUBP’s motion
for reconsideration was likewise denied.39

Thus, petitioners filed a Rule 65 petition to the CA. On December 15, 2003, the CA
sustained both the Labor Arbiter and the NLRC’s rulings. The appellate court explained,

A cursory reading of the three pleadings, to wit: the Complaint (Vol. I, Rollo, p[p]. 166-167);
the Amended Complaint(Vol. I, Rollo[,] pp. 168-172) and the Second Amended
Complaint dated March 8, 2000 (Vol. II, Rollo, pp. 219-225) will readily show that the instant
case was brought about by the action of the Group of REM[I]GIO to disaffiliate from FFW
and to organized (sic) REUBP under the tutelage of REM[I]GIO and VILLAREAL. At first
glance of the case at bar, it involves purely an (sic) inter-union and intra-union conflicts or
disputes between EUBP-FFW and REUBP which issue should have been resolved by the
Bureau of Labor Relations under Article 226 of the Labor Code. However, since no less
than petitioners who admitted that respondents committed gross violations of the CBA,
then the BLR is divested of jurisdiction over the case and the issue should have been
referred to the Grievance Machinery and Voluntary Arbitrator and not to the Labor Arbiter
as what petitioners did in the case at bar. x x x

xxxx

Furthermore, the CBA entered between BAYER and EUBP-FFW [has] a life span of only
five years and after the said period, the employees have all the right to change their
bargaining unit who will represent them. If there exist[s] two opposing unions in the same
company, the remedy is not to declare that such act is considered unfair labor practice but
rather they should conduct a certification election provided [that] it should be conducted
within 60 days of the so[-]called freedom period before the expiration of the CBA.

WHEREFORE, premises considered, this Petition is DENIED and the assailed Decision
dated September 27, 2001 as well as the Order dated June 21, 2002, denying the motion
for reconsideration, by the National Labor Relations Commission, First Division, in NLRC
Case No. RAB-IV-12-11813-99-L, are hereby AFFIRMED in toto. Costs against
petitioners.

SO ORDERED.40

Undaunted, petitioners filed this Rule 45 petition before this Court. Initially, the said
petition was denied for having been filed out of time and for failure to comply with the
requirements provided in the 1997 Rules of Civil Procedure, as amended.41 Upon
petitioners’ motion, however, we decided to reinstate their appeal.

The following are the issues raised by petitioners, to wit:

I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN ARRIVING AT THE

DECISION PROMULGATED ON 15 DECEMBER 2003 AND RESOLUTION
PROMULGATED ON 23 MARCH 2004, DECIDED THE CASE IN ACCORDANCE WITH
LAW AND JURISPRUDENCE; AND

II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN ARRIVING AT

THE DECISION PROMULGATED ON 15 DECEMBER 2003 AND RESOLUTION
PROMULGATED ON 23 MARCH 2004, GRAVELY ABUSE[D] ITS DISCRETION IN ITS
FINDINGS AND CONCLUSION THAT:

THE ACTS OF ABETTING OR ASSISTING IN THE CREATION OF ANOTHER UNION,

NEGOTIATING OR BARGAINING WITH SUCH UNION, WHICH IS NOT THE SOLE AND
EXCLUSIVE BARGAINING AGENT, VIOLATING THE DUTY TO BARGAIN
COLLECTIVELY, REFUSAL TO PROCESS GRIEVABLE ISSUES IN THE GRIEVANCE
MACHINERY AND/OR REFUSAL TO DEAL WITH THE SOLE AND EXCLUSIVE
BARGAINING AGENT ARE ACTS CONSTITUTING OR TANTAMOUNT TO UNFAIR
LABOR PRACTICE.42
Respondents Bayer, Lonishen and Amistoso, meanwhile, identify the issues as follows:

I. WHETHER OR NOT THE UNIFORM FINDINGS OF THE COURT OF APPEALS, THE

NLRC AND THE LABOR ARBITER ARE BINDING ON THIS HONORABLE COURT;

II. WHETHER OR NOT THE LABOR ARBITER AND THE NLRC HAVE JURISDICTION
OVER THE INSTANT CASE;

III. WHETHER OR NOT THE INSTANT CASE INVOLVES AN INTRA-UNION DISPUTE;

IV. WHETHER OR NOT RESPONDENTS COMPANY, LONISHEN AND AMISTOSO

COMMITTED AN ACT OF UNFAIR LABOR PRACTICE; AND

V. WHETHER OR NOT THE INSTANT CASE HAS BECOME MOOT AND ACADEMIC.43

Essentially, the issue in this petition is whether the act of the management of Bayer in
dealing and negotiating with Remigio’s splinter group despite its validly existing CBA with
EUBP can be considered unfair labor practice and, if so, whether EUBP is entitled to any
relief.

Petitioners argue that the subject matter of their complaint, as well as the subsequent
amendments thereto, pertain to the unfair labor practice act of respondents Bayer,
Lonishen and Amistoso in dealing with Remigio’s splinter union. They contend that (1) the
acts of abetting or assisting in the creation of another union is among those considered by
the Labor Code, as amended, specifically under Article 248 (d)44 thereof, as unfair labor
practice; (2) the act of negotiating with such union constitutes a violation of Bayer’s duty to
bargain collectively; and (3) Bayer’s unjustified refusal to process EUBP’s grievances and
to recognize the said union as the sole and exclusive bargaining agent are tantamount to
unfair labor practice.45

Respondents Bayer, Lonishen and Amistoso, on the other hand, contend that there can
be no unfair labor practice on their part since the requisites for unfair labor practice – i.e.,
that the violation of the CBA should be gross, and that it should involve violation in the
economic provisions of the CBA – were not satisfied. Moreover, they cite the ruling of the
Labor Arbiter that the issues raised in the complaint should have been ventilated and
threshed out before the voluntary arbitrators as provided in Article 261 of the Labor Code,
as amended.46 Respondents Remigio and Villareal, meanwhile, point out that the case
should be dismissed as against them since they are not real parties in interest in the ULP
complaint against Bayer,47 and since there are no specific or material acts imputed against
them in the complaint.48

The petition is partly meritorious.

An intra-union dispute refers to any conflict between and among union members,
including grievances arising from any violation of the rights and conditions of membership,
violation of or disagreement over any provision of the union’s constitution and by-laws, or
disputes arising from chartering or disaffiliation of the union.49 Sections 1 and 2, Rule XI of
Department Order No. 40-03, Series of 2003 of the DOLE enumerate the following
circumstances as inter/intra-union disputes, viz:

RULE XI
INTER/INTRA-UNION DISPUTES AND
OTHER RELATED LABOR RELATIONS DISPUTES

Section 1. Coverage. - Inter/intra-union disputes shall include:

(a) cancellation of registration of a labor organization filed by its members or by another

labor organization;

(b) conduct of election of union and workers’ association officers/nullification of election of

union and workers’ association officers;

(c) audit/accounts examination of union or workers’ association funds;

(d) deregistration of collective bargaining agreements;

(e) validity/invalidity of union affiliation or disaffiliation;

(f) validity/invalidity of acceptance/non-acceptance for union membership;

(g) validity/invalidity of impeachment/expulsion of union and workers’ association officers

and members;

(h) validity/invalidity of voluntary recognition;

(i) opposition to application for union and CBA registration;

(j) violations of or disagreements over any provision in a union or workers’ association

constitution and by-laws;

(k) disagreements over chartering or registration of labor organizations and collective

bargaining agreements;

(l) violations of the rights and conditions of union or workers’ association membership;

(m) violations of the rights of legitimate labor organizations, except interpretation of

collective bargaining agreements;

(n) such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining –
(1) between and among legitimate labor organizations;

(2) between and among members of a union or workers’ association.

Section 2. Coverage. – Other related labor relations disputes shall include any conflict
between a labor union and the employer or any individual, entity or group that is not a
labor organization or workers’ association. This includes: (1) cancellation of registration of
unions and workers’ associations; and (2) a petition for interpleader.

It is clear from the foregoing that the issues raised by petitioners do not fall under any of
the aforementioned circumstances constituting an intra-union dispute. More importantly,
the petitioners do not seek a determination of whether it is the Facundo group (EUBP) or
the Remigio group (REUBP) which is the true set of union officers. Instead, the issue
raised pertained only to the validity of the acts of management in light of the fact that it still
has an existing CBA with EUBP. Thus as to Bayer, Lonishen and Amistoso the question
was whether they were liable for unfair labor practice, which issue was within the
jurisdiction of the NLRC. The dismissal of the second ULP complaint was therefore
erroneous.

However, as to respondents Remigio and Villareal, we find that petitioners’ complaint was
validly dismissed.

Petitioners’ ULP complaint cannot prosper as against respondents Remigio and Villareal
because the issue, as against them, essentially involves an intra-union dispute based on
Section 1 (n) of DOLE Department Order No. 40-03. To rule on the validity or illegality of
their acts, the Labor Arbiter and the NLRC will necessarily touch on the issues respecting
the propriety of their disaffiliation and the legality of the establishment of REUBP – issues
that are outside the scope of their jurisdiction. Accordingly, the dismissal of the complaint
was validly made, but only with respect to these two respondents.

But are Bayer, Lonishen and Amistoso liable for unfair labor practice? On this score, we
find that the evidence supports an answer in the affirmative.

It must be remembered that a CBA is entered into in order to foster stability and mutual
cooperation between labor and capital. An employer should not be allowed to rescind
unilaterally its CBA with the duly certified bargaining agent it had previously contracted
with, and decide to bargain anew with a different group if there is no legitimate reason for
doing so and without first following the proper procedure. If such behavior would be
tolerated, bargaining and negotiations between the employer and the union will never be
truthful and meaningful, and no CBA forged after arduous negotiations will ever be
honored or be relied upon. Article 253 of the Labor Code, as amended, plainly provides:

ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement.
– Where there is a collective bargaining agreement, the duty to bargain collectively shall
also mean that neither party shall terminate or 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. (Emphasis supplied.) 1avvphi1

This is the reason why it is axiomatic in labor relations that a CBA entered into by a
legitimate labor organization that has been duly certified as the exclusive bargaining
representative and the employer becomes the law between them. Additionally, in the
Certificate of Registration50 issued by the DOLE, it is specified that the registered CBA
serves as the covenant between the parties and has the force and effect of law between
them during the period of its duration. Compliance with the terms and conditions of the
CBA is mandated by express policy of the law primarily to afford protection to labor51 and
to promote industrial peace. Thus, when a valid and binding CBA had been entered into
by the workers and the employer, the latter is behooved to observe the terms and
conditions thereof bearing on union dues and representation.52 If the employer grossly
violates its CBA with the duly recognized union, the former may be held administratively
and criminally liable for unfair labor practice.53

Respondents Bayer, Lonishen and Amistoso, contend that their acts cannot constitute
unfair labor practice as the same did not involve gross violations in the economic
provisions of the CBA, citing the provisions of Articles 248 (1) and 26154 of the Labor Code,
as amended.55 Their argument is, however, misplaced.

Indeed, in Silva v. National Labor Relations Commission,56 we explained the correlations

of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be
cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction
thereon, the allegations in the complaint must show prima facie the concurrence of two
things, namely: (1) gross violation of the CBA; and (2) the violation pertains to the
economic provisions of the CBA.57

This pronouncement in Silva, however, should not be construed to apply to violations of

the CBA which can be considered as gross violations per se, such as utter disregard of
the very existence of the CBA itself, similar to what happened in this case. When an
employer proceeds to negotiate with a splinter union despite the existence of its valid CBA
with the duly certified and exclusive bargaining agent, the former indubitably abandons its
recognition of the latter and terminates the entire CBA.

Respondents cannot claim good faith to justify their acts. They knew that Facundo’s group
represented the duly-elected officers of EUBP. Moreover, they were cognizant of the fact
that even the DOLE Secretary himself had recognized the legitimacy of EUBP’s mandate
by rendering an arbitral award ordering the signing of the 1997-2001 CBA between Bayer
and EUBP. Respondents were likewise well-aware of the pendency of the intra-union
dispute case, yet they still proceeded to turn over the collected union dues to REUBP and
to effusively deal with Remigio. The totality of respondents’ conduct, therefore, reeks with
anti-EUBP animus.

Bayer, Lonishen and Amistoso argue that the case is already moot and academic
following the lapse of the 1997-2001 CBA and their renegotiation with EUBP for the
2006-2007 CBA. They also reason that the act of the company in negotiating with EUBP for
the 2006-2007 CBA is an obvious recognition on their part that EUBP is now the certified
collective bargaining agent of its rank-and-file employees.58

We do not agree. First, a legitimate labor organization cannot be construed to have

abandoned its pending claim against the management/employer by returning to the
negotiating table to fulfill its duty to represent the interest of its members, except when the
pending claim has been expressly waived or compromised in its subsequent negotiations
with the management. To hold otherwise would be tantamount to subjecting industrial
peace to the precondition that previous claims that labor may have against capital must
first be waived or abandoned before negotiations between them may resume.
Undoubtedly, this would be against public policy of affording protection to labor and will
encourage scheming employers to commit unlawful acts without fear of being sanctioned
in the future.
1avvphi1

Second, that the management of Bayer decided to recognize EUBP as the certified
collective bargaining agent of its rank-and-file employees for purposes of its 2006-2007
CBA negotiations is of no moment. It did not obliterate the fact that the management of
Bayer had withdrawn its recognition of EUBP and supported REUBP during the
tumultuous implementation of the 1997-2001 CBA. Such act of interference which is
violative of the existing CBA with EUBP led to the filing of the subject complaint.

On the matter of damages prayed for by the petitioners, we have held that as a general
rule, a corporation cannot suffer nor be entitled to moral damages. A corporation, and by
analogy a labor organization, being an artificial person and having existence only in legal
contemplation, has no feelings, no emotions, no senses; therefore, it cannot experience
physical suffering and mental anguish. Mental suffering can be experienced only by one
having a nervous system and it flows from real ills, sorrows, and griefs of life – all of which
cannot be suffered by an artificial, juridical person.59 A fortiori, the prayer for exemplary
damages must also be denied.60 Nevertheless, we find it in order to award (1) nominal
damages in the amount of ₱250,000.00 on the basis of our ruling in De La Salle University
v. De La Salle University Employees Association (DLSUEA-NAFTEU)61 and Article
2221,62 and (2) attorney’s fees equivalent to 10% of the monetary award. The remittance to
petitioners of the collected union dues previously turned over to Remigio and Villareal is
likewise in order.

WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The Decision
dated December 15, 2003 and the Resolution dated March 23, 2004 of the Court of
Appeals in CA-G.R. SP No. 73813 are MODIFIED as follows:
1) Respondents Bayer Phils., Dieter J. Lonishen and Asuncion Amistoso are found
LIABLE for Unfair Labor Practice, and are hereby ORDERED to remit to petitioners the
amount of ₱254,857.15 representing the collected union dues previously turned over to
Avelina Remigio and Anastacia Villareal. They are likewise ORDERED to pay petitioners
nominal damages in the amount of ₱250,000.00 and attorney’s fees equivalent to 10% of
the monetary award; and

2) The complaint, as against respondents Remigio and Villareal. is DISMISSED due to the
lack of jurisdiction of the Labor Arbiter and the NLRC, the complaint being in the nature of
an intra-union dispute.

No pronouncement as to costs.

SO ORDERED.
 G.R. No. 220383, October 05, 2016

SONEDCO WORKERS FREE LABOR UNION (SWOFLU) / RENATO YUDE, MARIANITO REGINO,
MANUEL YUMAGUE, FRANCISCO DACUDAG, RUDY ABABAO, DOMINIC SORNITO, SERGIO
CAJUYONG, ROMULO LABONETE, GENEROSO GRANADA, EMILIO AGUS, ARNOLD CAYAO, BEN
GENEVE, VICTOR MAQUE, RICARDO GOMEZ, RODOLFO GAWAN, JIMMY SULLIVAN, FEDERICO
SUMUGAT, JR., ROMULO AVENTURA, JR., JURRY MAGALLANES, HERNAN EPISTOLA, JR.,
ROBERTO BELARTE, EDMON MONTALVO, TEODORO MAGUAD, DOMINGO TABABA, MAXIMO
SALE, CYRUS DIONILLO, LEONARDO JUNSAY, JR., DANILO SAMILLION, MARIANITO
BOCATEJA, JUANITO GEBUSION, RICARDO MAYO, RAUL ALIMON, ARNEL ARNAIZ, REBENCY
BASOY, JIMMY VICTORIO BERNALDE, RICARDO BOCOL, JR., JOB CALAMBA, WOLFRANDO
CALAMBA, RODOLFO CASISID, JR., EDGARDO DELA PENA, ALLAN DIONILLO, EDMUNDO
EBIDO, JOSE ELEPTICO, JR., MARCELINO FLORES, HERNANDO FUENTEBILLA, SAUL HITALIA,
JOSELITO JAGODILLA, NONITO JAYME, ADJIE JUANILLO, JEROLD JUDILLA, EDILBERTO
NACIONAL, SANDY NAVALES, FELIPE NICOLASORA, JOSE PAMALO-AN, ISMAEL PEREZ, JR.,
ERNESTO RANDO, JR., PHILIP REPULLO, VICENTE RUIZ, JR., JOHN SUMUGAT, CARLO SUSANA,
ROMEO TALAPIERO, JR., FERNANDO TRIENTA, FINDY VILLACRUZ, JOEL VILLANUEVA, AND
JERRY MONTELIBANO, Petitioners, v. UNIVERSAL ROBINA CORPORATION, SUGAR
DIVISION-SOUTHERN NEGROS DEVELOPMENT CORPORATION (SONEDCO), Respondent.

DECISION

LEONEN, J.:

An employer who refuses to bargain with the union and tries to restrict its bargaining power is guilty of
unfair labor practice. In determining whether an employer has not bargained in good faith, the totality of
all the acts of the employer at the time of negotiations must be taken into account.

This resolves a Petition1 for review assailing the Decision2 dated January 30, 2015 and the
Resolution3dated July 27, 2015 of the Court of Appeals. The Court of Appeals dismissed the Petition for
Certiorari filed by members of SONEDCO Workers Free Labor Union for lack of merit.4

On May 6, 2002, Universal Robina Corporation Sugar Division - Southern Negros Development
Corporation (URC-SONEDCO) and Philippine Agricultural Commercial and Industrial Workers Union
(PACIWU-TUCP), then the exclusive bargaining representative of URC-SONEDCO's rank-and-file
employees, entered into a Collective Bargaining Agreement (2002 Collective Bargaining Agreement)
effective January 1, 2002 to December 31, 2006.5 Under the 2002 Collective Bargaining Agreement,
rank-and-file employees were entitled to a wage increase of P14.00/day for 2002 and P12.00/day for the
succeeding years until 2006.6

On May 17, 2002, days after the 2002 Collective Bargaining Agreement was signed, a certification election
was conducted. SONEDCO Workers Free Labor Union won and replaced PACIWU-TUCP as the exclusive
bargaining representative.7

PACIWU-TUCP questioned the results of the certification election before the Department of Labor and
Employment. On July 8, 2002, Med-Arbiter Romulo Sumalinog certified SONEDCO Workers Free Labor
Union as the sole and exclusive bargaining representative of URC-SONEDCO.8 This was affirmed by the
Labor Secretary in a Resolution dated December 27, 2002, which became final on April 15,
2003.9PACIWU-TUCP elevated the same issue to the Court of Appeals and thereafter this Court, which on
July 11, 2007, resolved that the certification election was valid. SONEDCO Workers Free Labor Union was
declared the exclusive bargaining agent of URC-SONEDCO's rank-and-file employees.10

URC-SONEDCO consistently refused to negotiate a new collective bargaining agreement with SONEDCO
Workers Free Labor Union, despite several demands from SONEDCO Workers Free Labor Union, allegedly
due to the 2002 Collective Bargaining Agreement, which it signed with PACIWU-TUCP.12

Despite being the incumbent exclusive bargaining agent, SONEDCO Workers Free Labor Union filed
before the Department of Labor and Employment a Petition13 for certification election on December 6,
2006 in view of the approaching expiration of the 2002 Collective Bargaining Agreement. On December 31,
2006, the 2002 Collective Bargaining Agreement expired with no new collective bargaining agreement
being signed.14

On August 28, 2007, with no collective bargaining agreement in effect, URC-SONEDCO informed the
rank-and-file employees that they would be granted the following economic benefits: chanRoblesvirtualLawlibrary

(1) Wage increase of P16.00/day effective January 1, 2007;

(2) Group life insurance of P50,000.00 coverage/year;

Emergency leave in lieu of bereavement leave, up to five (5) days

(3)
per year; and

Cash loan in lieu of emergency loan of P5,000.00, payable in 11

(4)
months.15
chanrobleslaw

URC-SONEDCO asked the employees who wished to avail themselves of these-benefits to sign an
acknowledgment receipt/waiver (2007 waiver), which stated that "[i]n the event that a subsequent
[collective bargaining agreement] is negotiated between Management and Union, the new [Collective
Bargaining Agreement] shall only be effective January 1, 2008."16 URC-SONEDCO claimed that the 2007
waiver was designed to avoid and/or prevent double compensation.17

Several SONEDCO Workers Free Labor Union members refused to sign the 2007 waiver. Hence, they did
not receive the benefits given to other members of the bargaining unit who had done so.18

In 2008, another wage increase of P16.00/day effective January 1, 2008 were given to employees who
signed an acknowledgment receipt/waiver (2008 waiver).19 The 2008 waiver stated that "[s]a panahon na
kung saan may [collective bargaining agreement] na maisasara sa pagitan ng Management at Uniyon,
ito ay magiging epektibo lamang Simula January 1, 2009."20
Again, several SONEDCO Workers Free Labor Union members refused to sign the 2008 waiver. They did
not receive the benefits from URC-SONEDCO.20

On August 20, 2008, a certification election was conducted.21 SONEDCO Workers Free Labor Union won
again and proceeded to negotiate a new collective bargaining agreement, which became effective
January 1, 2009 to December 31, 2013 (2009 Collective Bargaining Agreement).22

On July 2, 2009, SONEDCO Workers Free Labor Union and its members who refused to sign the 2007 and
2008 waivers filed a complaint for unfair labor practices against URC-SONEDCO.23 They argued that the
requirement of a waiver before the release of the wage increase violated their right to self-organization,
collective bargaining, and concerted action.24

The Labor Arbiter found that URC-SONEDCO did not commit unfair labor practice when it increased the
wages of the rank-and-file employees for 2007 and 2008.25 He found that, the requirement of a waiver
aside, it was benevolent for URC-SONEDCO to give its employees additional benefits outside the
Collective Bargaining Agreement.26 However, the Labor Arbiter ordered URC-SONEDCO to pay the
employees who refused to sign the 2007 and 2008 waivers of the benefits received by their fellow
employees for 2007 and 2008. As a new collective bargaining agreement had already been renegotiated
and did not include the years 2007 and 2008, the purpose of the waivers was already served.

On appeal, the National Labor Relations Commission sustained27 the Labor Arbiter's Decision that the
requirement of a waiver before the release of the benefits for 2007 and 2008 did not constitute unfair labor
practice: chanRoblesvirtualLawlibrary

Such an act does not constitute interference, restraining or coercing

employees in the exercise of their right to self organization or to
bargain collectively, neither is it tantamount to discrimination against
union members who refused to waive wage increase in a CBA. As
aptly termed by respondents, it is an "offer" during the absence of
a Collective Bargaining Agreement (CBA) and during the time when
there was an unresolved union representation, which this Commission
considers as reasonable.29
chanrobleslaw

The National Labor Relations Commission likewise affirmed the decision to award the wage increase to
the employees who initially refused to sign the waiver.30

Aggrieved, members of SONEDCO Workers Free Labor Union filed before the Court of Appeals a Petition
for Certiorari assailing the National Labor Relations Commission Decision. The Court of Appeals found no
grave abuse of discretion in the assailed decision and dismissed the Petition.31

Hence, on October 22, 2015, this Petition32 was filed.

In the Resolution33 dated January 11, 2016, this Court required respondent URC-SONEDCO to file its
comment on the Petition. Respondent filed its Comment34 on March 22, 2016.
Petitioners now argue that the Court of Appeals failed to consider the totality of respondent's dealings
with them.35 They allege that despite their several invitations, respondent consistently failed to bargain
with them, and the wage increase was just another move to avoid negotiations.36 Petitioners claim that
the benefits given by respondent was an economic incentive meant to encourage individual employees to
give up agreement bargaining for 2007 and 2008.37 Moreover, petitioners maintain that the wage increase
for 2007 and 2008 should be considered as a continuing benefit over what was already provided in the
2009 Collective Bargaining Agreement because Article XXI of the 2009 Collective Bargaining Agreement
38
excluded claims pending before the courts. Article XXI provides: chanRoblesvirtualLawlibrary

ARTICLE XXI
COMPLETE SETTLEMENT

The parties agree that this Agreement is full and

complete settlement of all demands, requests, claims
and disputes of any nature, written or verbal, that either
party have or may have against the other prior to the
effectivity hereof, except those subject of pending cases
before the NLRC or its arbitration branch, or before
the DOLE or regular courts.39
chanrobleslaw

Respondent points out that petitioners merely rehashed the same matters already ruled upon by the
Court of Appeals.40 It reiterates that both the National Labor Relations Commission and the Court of
Appeals found them not guilty of unfair labor practice since the waivers did not violate the employees'
right to organize.41 Moreover, the employees freely signed the waivers; even petitioners did not accuse
respondent of coercing employees to sign these waivers.42 Respondent claims that the benefits that it
offered were higher than what the employees had previously received; there was no diminution of
benefits involved.43

For resolution are the following issues:cralawlawlibrary

First, whether respondent committed unfair labor practice; ChanRoblesVirtualawlibrary

Second, whether petitioners, who refused to sign the 2007 and 2008 waivers, are entitled to the wage
increase and other economic benefits as a continuing employee benefit notwithstanding the 2009
Collective Bargaining Agreement; and

Lastly, whether respondent is liable for damages. chanroblesvirtuallawlibrary

Respondent is guilty of unfair labor practice.

Both the National Labor Relations Commission and the Court of Appeals ruled that respondent did not
commit unfair labor practice since the requirement of a waiver for 2007 and 2008 did not interfere with the
employees 5 exercise of their right to self-organization.44 However, the Court of Appeals failed to take
into account that unfair labor practice not only involves acts that violate the right to self-organization but
also covers several acts enumerated in Article 259 of the Labor Code, thus: chanRoblesvirtualLawlibrary

ARTICLE 259. [248] Unfair Labor Practices of Employers. — It shall

be unlawful for an employer to commit any of the following unfair
labor practices: cralawlawlibrary

(a) To interfere with, restrain or coerce employees in the exercise of

their right to self-organization;

(b) To require as a condition of employment that a person or an

employee shall not join a labor organization or shall withdraw from
one to which he belongs; ChanRoblesVirtualawlibrary

(c) To contract out services or functions being performed by union

members when such will interfere with, restrain or coerce employees
in the exercise of their right to self-organization; ChanRoblesVirtualawlibrary

(d) To initiate, dominate, assist or otherwise interfere with the

formation or administration of any labor organization, including the
giving of financial or other support to it or its organizers or
supporters; ChanRoblesVirtualawlibrary

(e) To discriminate in regard to wages, hours of work and other terms

and conditions of employment in order to encourage or discourage
membership in any labor organization. Nothing in this Code or in any
other law shall stop the parties from requiring membership in a
recognized collective bargaining agent as a condition for employment,
except those employees who are already members of another union
at the time of the signing of the collective bargaining agreement.
Employees of an appropriate bargaining unit who are not members
of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members
of 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 242, paragraph (o) of this Code 204 shall not apply to the
non-members of the recognized collective bargaining agent; ChanRoblesVirtualawlibrary

(f) To dismiss, discharge or otherwise prejudice or discriminate against

an employee for having given or being about to give testimony under
this Code; ChanRoblesVirtualawlibrary

(g) To violate the duty to bargain collectively as prescribed by this

Code;
 (h) To pay negotiation or attorney's fees to the union or its officers
or agents as part of the settlement of any issue in collective bargaining
or any other dispute; or

(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the

officers and agents of corporations, associations or partnerships who
have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable. (Emphasis supplied)
chanrobleslaw

Under this provision, an employer is guilty of unfair labor practice when it fails in its duty to bargain in
good faith.

Although it Is well-settled that the findings of fact of quasi-judicial agencies such as the National Labor
Relations Commission are accorded great respect, this rule does admit exceptions.45 One of these
exceptions is when, as in this case, the Court of Appeals errs in appreciating the facts. In Culili v. Eastern
Telecommunications Philippines, Inc.:46 chanroblesvirtuallawlibrary

While it is true that factual findings made by quasi-judicial and

administrative tribunals, if supported by substantial evidence, are
accorded great respect and even finality by the courts, this general
rule admits of exceptions. When there is a showing that a palpable
and demonstrable mistake that needs rectification has been committed
or when the factual findings were arrived at arbitrarily or in disregard
of the evidence on record, these findings may be examined by the
courts.47
chanrobleslaw

In ruling that respondent did not commit unfair labor practice, the National Labor Relations Commission
and the Court of Appeals failed to consider the totality of respondent's acts, which showed that it violated
its duty to bargain collectively. This constitutes unfair labor practice under Article 259(g) of the Labor
Code.

Article 263 of the Labor Code defines the duty to bargain collectively: chanRoblesvirtualLawlibrary

ARTICLE 263. [252] Meaning of Duty to Bargain Collectively. —

The duty to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to wages,
hours of work and all other terms and conditions of employment
including proposals for adjusting any grievances or questions arising
under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel
any party to agree to a proposal or to make any concession.
chanrobleslaw

Respondent repeatedly refused to meet and bargain with SONEDCO Workers Free Labor Union, the
exclusive bargaining agent of its rank-and-file employees. In its Position Paper48 before the National
Labor Relations Commission, respondent cited the different instances when petitioners sent it letters
trying to set meetings to discuss a new collective bargaining agreement.49 Respondent admitted that it
refused to meet with petitioners in light of the 2002 Collective Bargaining Agreement, which it signed with
PACIWU-TUCP, the previous bargaining representative. It claimed that the 2002 Collective Bargaining
Agreement remained in full force and effect without change until December 31, 2006, despite
PACIWU-TUCP losing the May 17, 2002 certification election to SONEDCO Workers Free Labor Union.50

Respondent's argument has no merit. Respondent's reliance on the 2002 Collective Bargaining
Agreement as basis for not negotiating with petitioners is unjustified. The Collective Bargaining
Agreement that respondent invoked had been entered into when a Petition for Certification Election was
already filed.

In Associated Trade Unions v. Trajano,50 this Court ruled on the temporary nature of this type of
collective bargaining agreement: chanRoblesvirtualLawlibrary

The Court will not rule on the merits and/or defects of the new CBA
and shall only consider the fact that it was entered into at a time
when the petition for certification election had already been filed by
TUP AS and was then pending resolution. The said CBA cannot be
deemed permanent, precluding the commencement of negotiations by
another union with the management. In the meantime however, so as
not to deprive the workers of the benefits of the said agreement, it
shall be recognized and given effect on a temporary basis, subject
to the results of the certification election. The agreement may be
continued in force if ATU is certified as the exclusive bargaining
representative of the workers or may be rejected and replaced in the
event that TUP AS emerges as the winner.51 (Emphasis supplied)
chanrobleslaw

Respondent claimed that it refused to bargain with petitioners because the issue of representation was
still pending before the courts. It claimed that when the 2002 Collective Bargaining Agreement expired on
December 31, 2006, it had no bargaining agent to deal with as SONEDCO Workers Free Labor Union had
filed before the Department of Labor and Employment a Petition for Certification Election on December 6,
2006, which resulted in the absence of a duly elected bargaining representative.52Respondent claimed it
was only on September 25, 2008 that SONEDCO Workers Free Labor Union was certified by the
Department of Labor and Employment as the exclusive bargaining agent of respondent's rank-and-file
employees.53

This argument fails to persuade.

The Department of Labor and Employment, in its Order54 dated May 4, 2007 granting SONEDCO Workers
Free Labor Union's second Petition for Certification Election, illustrated why respondent's argument is
untenable: chanRoblesvirtualLawlibrary
 Let it be noted that based on the results of the certification election
conducted in the establishment on 17 May 2002, Mediator-Arbiter
Sumalinog, declared and certified SWOFLU as the sole and exclusive
bargaining agent of the rank-and-file employees of SONEDCO. The
office of the Secretary affirmed SWOFLU's certification in
OS-A-6-63-01, and the decision became final and executory on 15
April 2003. As such, the suspension of the running of the one (1)
year period referred in Section 3(a) Rule VIII was automatically lifted
on 15 April 2003. Hence, the one (1) year bar cannot be used to deny
the subject petition. Furthermore, despite PACIWU-TUCP's act of
questioning the Office of the Secretary's affirmation before the Court
of Appeals by way of a petition for certiorari, no restraining order
was issued to stay the implementation of the decision.

In other words, as far as this Office is concerned, SWOFLU is the

incumbent sole and exclusive bargaining agent of the rank-and-file
employees of SONEDCO. As such, there was actually no necessity
for SWOFLU to file the subject petition, as its representation status
remains to be effective unless challenged by other legitimate labor
organizations during the freedom period of the CBA that was entered
into by PACIWU-TUCP and employer SONEDCO.

Incidentally, the Office of the Secretary declared in OS-A-6-63-01 that

SWOFLU had the option to adopt the interim CBA or negotiate with
SONEDCO a new CBA. Whether SWOFLU was able to actually
administer the said CBA, or whether it attempted to negotiate with
the employer for a new CBA but was rejected, the issues are already
moot and academic by reason of the expiration of the effectivity of
the agreement.56 (Emphasis supplied)
chanrobleslaw

Respondent's duty to bargain with SONEDCO Workers Free Labor Union as the incumbent bargaining
agent is clear. The last paragraph of Article 268 of the Labor Code states: chanRoblesvirtualLawlibrary

ARTICLE 268 [256]. Representation issue in organized establishments.

— In organized establishments, when a verified petition questioning
the majority status of the incumbent bargaining agent is filed before
the Department of Labor and Employment within the sixty-day period
before the expiration of the collective bargaining agreement, the
Med-Arbiter shall automatically order an election by secret ballot
when the verified petition is supported by the written consent of at
least twenty-five percent (25%) of all the employees in the bargaining
unit to ascertain the will of the employees in the appropriate bargaining
unit. To have a valid election, at least a majority of all eligible voters
in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive
 bargaining agent of all the workers in the unit. When an election which
provides for three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be conducted
between the labor unions receiving the two highest number of
votes: Provided, that the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes cast.

At the expiration of the freedom period, the employer shall continue

to recognize the majority status of the incumbent bargaining agent
where no petition for certification election is filed. (Emphasis supplied)
chanrobleslaw

When petitioners held a conference on May 26, 2003, respondent refused to attend.57 Because respondent
failed to appear in the conference, petitioners wrote their demands in a letter sometime in July 2003. The
letter included, among others, a wage increase of P50.00/day from September 2003 to 2006.58 Instead of
explaining its non-attendance to the conference or making a counter-offer, respondent replied on August
15, 2003 acknowledging the receipt and contents of the July 2003 letter but invoking the 2002 Collective
Bargaining Agreement as an excuse not to answer petitioners' demands to negotiate.59 This is contrary to
Article 261 of the Labor Code, which requires the other party to reply within 10 days from receipt of the
written demand: chanRoblesvirtualLawlibrary

ARTICLE 261. [250] Procedure in Collective Bargaining. — The

following procedures shall be observed in collective bargaining: cralawlawlibrary

(a) When a party desires to negotiate an agreement, it shall serve

a written notice upon the other party with a statement of its proposals.
The other party shall make a reply thereto not later than ten (10)
calendar days from receipt of such notice[.]
chanrobleslaw

This was not respondent's only violation of Article 261. Respondent likewise failed to reply to the
collective bargaining agreement proposal sent by petitioners on August 21, 2007.60 The September 22,
2007 letter, sent with the agreement proposal, also went unheeded.61

Respondent's reliance on the 2002 Collective Bargaining Agreement is contrary to jurisprudence.

In Associated Labor Unions v. Trajano,62 this Court explicitly held that the winning union had the option
to either continue the existing collective bargaining agreement or negotiate a new one: chanRoblesvirtualLawlibrary

The new CBA negotiated by petitioners whether or not submitted to

the MOLE in accordance with Article 231 of the Labor Code cannot
be deemed permanent, precluding commencement of negotiations by
another union with management, considering that it was entered into
at a time when the petition for certification election had already been
filed by respondent union. . . . Meantime, this interim agreement must
be recognized and given effect on a temporary basis so as not to
deprive the workers of the favorable terms of the agreement. . . .

If, as a result of the certification election, respondent union or a union

 other than petitioner union which executed the interim agreement is
certified as the exclusive bargaining representative of the rank and
file employees of respondent company, then, such union may adopt
the interim collective bargaining agreement or negotiate with
management for a new collective bargaining agreement[.]63 (Citations
omitted, emphasis supplied)
chanrobleslaw

As petitioners asked for a P50.00 wage increase, as opposed to the P12.00 wage increase they had been
receiving under the 2002 Collective Bargaining Agreement, petitioners were justified in demanding a
renegotiation. Respondent was remiss in its duty when it repeatedly refused negotiations with petitioners.

Respondent's refusal is even more unfounded considering that the Labor Secretary's Resolution,64 which
upheld the result of the May 17, 2002 certification election and declared SONEDCO Workers Free Labor
Union as the exclusive bargaining agent, became final and executory as early as April 15, 2003.65 Even
though there had been a pending petition for certiorari questioning the election results, no temporary
restraining order was issued to preclude respondent from bargaining with SONEDCO Workers Free Labor
Union, the declared incumbent union.

Even if we consider respondent's refusal to bargain as merely a mistake made in good faith, its
subsequent acts show an attempt to restrict petitioners' negotiating power.

First, the 2002 Collective Bargaining Agreement was done on May 6, 2002, only days before the May 17,
2002 certification election. When respondent and PACIWU-TUCP entered into the 2002 Collective
Bargaining Agreement, they had been aware that a certification election was going to be conducted in a
few days. In pushing through with negotiations instead of waiting for the outcome of the election,
respondent risked needing to renegotiate with a new union if PACIWU-TUCP loses. It cannot, thus, invoke
the hastily concluded 2002 Collective Bargaining Agreement as an excuse not to bargain with petitioners.
If respondent had truly intended to bargain in good faith, it could have easily waited a few more days to
know the result of the certification election.

Second, when the 2002 Collective Bargaining Agreement expired in December 2006, the Labor
Secretary's Resolution declaring SONEDCO Workers Free Labor Union as the bargaining agent of
respondent's rank-and-file employees was already final and executory. Respondent's initial basis for
refusal to bargain had expired, and since no temporary restraining order was issued, nothing was legally
preventing respondent from negotiating a new collective bargaining agreement with petitioners. That it
chose to refuse negotiations and instead entered into an agreement with its employees to essentially
waive negotiations for 2007 and 2008 betrays its intention of limiting petitioners' bargaining power.

The 2007 waiver provided, in part: chanRoblesvirtualLawlibrary

In the event that a subsequent CBA is negotiated between Management

and Union, the new CBA shall only be effective January 1, 2008.66
chanrobleslaw

The 2008 waiver provided, in part: chanRoblesvirtualLawlibrary

 Sa panahon na kung saan may CBA na maisasara sa pagitan ng
Management at Unyon, ito ay magiging epektibo lamang Simula
January l, 2009.67
chanrobleslaw

The wording of the waivers shows a clear attempt to limit petitioners' bargaining power by making them
waive the negotiations for 2007 and 2008. In stipulating that the collective bargaining agreement that
would be entered into would only be effective the year following the 2008 waiver, respondent limited
when the collective bargaining agreement could be deemed effective. Tn other words, respondent asked
petitioners to forego any benefits they might have received under a collective bargaining agreement in
exchange for the company-granted benefits.

Both the National Labor Relations Commission and the Court of Appeals regarded the incentives as a
magnanimous move because it gave the employees a P16.00 wage increase, P4.00 more than the P12.00
increase under the 2002 Collective Bargaining Agreement. However, respondent's claim of benevolence
falls short: the wage increase proposed by petitioners in 2007 was P50.00. If a collective bargaining
agreement had been concluded in 2007, employees who signed the waivers would have lost the chance
to receive P34.00 wage increase for that year.

Lastly, when the 2007 waiver was circulated, respondent already had a copy of petitioners' agreement
proposal. Respondent was aware that petitioners asked for a P50.00 wage increase. More importantly,
the last bar preventing respondent from recognizing SONEDCO Workers Free Labor Union as the
bargaining agent has been resolved by the time it issued the waivers. The Petition for Certiorari relative
to the May 17, 2002 certification election was denied with finality by this Court on July 11, 2007.68 There
was no reason to doubt that SONEDCO Workers Free Labor Union was the sole and exclusive bargaining
representative. If respondent did indeed act in good faith, it would have undergone agreement
negotiations with petitioners. However, respondent incessantly refused to meet with petitioners to
discuss the agreement proposal even after petitioners sent their September 22, 2007 letter.69 Instead of
negotiating the proposed P50.00 wage increase, respondent granted a P16.00 wage increase on the
condition that if a collective bargaining agreement was to be signed, it would only be effective the
succeeding year. In effect, respondent hindered petitioners' bargaining power when it made them waive
the bargaining efforts for 2007 and 2008. chanroblesvirtuallawlibrary

II
The National Labor Relations Commission did not err in granting the benefits for 2007 and 2008 to the
employees who did not sign the waiver.

After SONEDCO Workers Free Labor Union was again declared as the exclusive bargaining representative
in the August 20, 2008 certification election, the 2009 Collective Bargaining Agreement was created to
cover 2009 to 2013.70 Since the 2009 Collective Bargaining Agreement did not include the years 2007 and
2008, the alleged purpose of the waivers, which was to prevent double compensation, was already
served.71 It would be unfair for the employees to still not receive the benefits for 2007 and 2008 simply
because they refused to sign a waiver that was already moot.

However, there is no need for the continuation of the wage increase for 2007 and 2008 since the 2009
Collective Bargaining Agreement contains wage increase provisions for 2009 to 2013. As explained
in Samahang Manggagawa sa Top Form Manufacturing v. National Labor Relations Commission,72 if a
proposal is not printed in the collective bargaining agreement, it cannot be demanded: chanRoblesvirtualLawlibrary

The CBA is the law between the contracting parties — the collective
bargaining representative and the employer-company. Compliance
with a CBA is mandated by the expressed policy to give protection
to labor, hi the same vein, CBA provisions should be "construed
liberally rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose
which it is intended to serve." This is founded on the dictum that
a CBA is not an ordinary contract but one impressed with public
interest. It goes without saying, however, that only provisions
embodied in the CBA should be so interpreted and complied with.
Where a proposal raised by a contracting party does not find print
in the CBA, it is not a part thereof and the proponent has no claim
whatsoever to its implementation.72 (Citations omitted)
chanrobleslaw

If petitioners wanted the wage increase for 2007 and 2008 to be carried on, the proper recourse would
have been to demand that this be included in the 2009 Collective Bargaining Agreement. chanroblesvirtuallawlibrary

III

Respondent is liable to pay moral and exemplary damages. In Nueva Ecija Electric Cooperative, Inc. v.
National Labor Relations Commission:73 chanroblesvirtuallawlibrary

Unfair labor practices violate the constitutional rights of workers and

employees to self-organization, are inimical to the legitimate interests
of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect; and disrupt industrial peace and hinder
the promotion of healthy and stable labor-management relations. As
the conscience of the government, it is the Courts sworn duty to ensure
that none trifles with labor rights.

For this reason, we find it proper in this case to impose moral and
exemplary damages on private respondent.74
chanrobleslaw

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated January 30, 2015
and the Resolution dated July 27, 2015 in CA-GR. SP No. 05950 are SET ASIDE. Respondent Universal
Robina Corporation. Sugar Division - Southern Negros Development Corporation is GUILTY of unfair
labor practice and is ORDERED to pay each of the petitioners the wage increase of P16.00 for the years
2007 and 2008; and to pay SONEDCO Workers Free Labor Union moral damages in the amount of
P100,000.00; and exemplary damages in the amount of P200,000.00.

SO ORDERED. ChanRoblesVirtualawlibrary

GR. NO. 218454, December 01, 2016

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

DECISION

PERLAS-BERNABE, J.:

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

The Facts

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

Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union dues/agency fees from one
percent (1%) to two percent (2%) of the rank and file employees' monthly salaries, brought about by
PEU's affiliation with NUWHRAIN, which supposedly requires its affiliates to remit to it two percent (2%)
of their monthly salaries.11
Meanwhile, in a Decision12 dated October 10, 2008 (October 10, 2008 Decision), the OSEC resolved the
collective bargaining deadlock between PEU-NUWHRAIN and The Peninsula Manila Hotel (Hotel),
ordering the parties to execute a collective bargaining agreement (CBA) incorporating the dispositions
therein (arbitral award).13 The parties have yet to actually sign a CBA but have, for the most part,
implemented the arbitral award.14

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

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

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

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

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

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

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

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

The Issue Before the Court

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

The Court's Ruling

The petition lacks merit.

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

In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed. However, the rate of
agency fees it seeks to collect from the non-PEU members is contested, considering its failure to comply
with the requirements for a valid increase of union dues, rendering the collection of increased agency
fees unjustified.
Case law interpreting Article 250 (n) and (o)45 (formerly Article 241) of the Labor Code, as amended,
mandates the submission of three (3) documentary requisites in order to justify a valid levy of increased
union dues. These are: (a) an authorization by a written resolution of the majority of all the members at
the general membership meeting duly called for the purpose; (b) the secretary's record of the minutes of
the meeting, which shall include the list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees;46 and (c) individual written
authorizations for check-off duly signed by the employees concerned.47

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

1. the General Membership Assembly (Assembly) "approved

the deduction of two percent (2%) union dues from the monthly
basic salary of each union member" during its 8th General
Membership Meeting, as shown in the October 28, 2008
minutes; ChanRoblesVirtualawlibrary

2. "through inadvertence, the [October 28, 2008 GMR] failed

to include the Assembly's approval of the two percent (2%)
deduction of union dues;"

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

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

1. "the [two percent (2%)] Union dues will have to be

implemented since PEU was already affiliated with
NUWHRAIN [in] 2007";51]

2. "it was discussed, deliberated and approved by the majority

of members the (sic) 10% of total CBA back wages through
[the Assembly] resolution authorizing the payment of attorney's
fees."52

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

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

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

In fine, the Court finds no reversible error on the part of the CA in granting petitioner's certiorari petition,
and finding that the OSEC gravely abused its discretion in declaring PEU-NUWHRAIN's entitlement to
collect two percent (2%) agency fees from the non-PEU members beginning July 2010. The OSEC's March
6, 2012 Order is patently contrary to law, hence, imbued with grave abuse of discretion correctible
through certiorari.58

WHEREFORE, the petition is DENIED. The Decision dated February 9, 2015 and the Resolution dated
May 21, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 124566 are hereby AFFIRMED.

SO ORDERED. ChanRoblesVirtualawlibrary