G.R. No.

101730 June 17, 1993

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner, 

vs.
HON. BIENVENIDO E. LAGUESMA and PT & T SUPERVISORY EMPLOYEES UNION-
APSOTEU, respondents.

Leonard U. Sawal for private respondent.

BELLOSILLO, J.:

Can a petition for certification election filed by supervisory employees of an unorganized establishment — one
without a certified bargaining agent — be dismissed on the ground that these employees are actually performing
managerial functions?

This is the issue for reconsideration in this petition for certiorari and mandamus, with prayer for the issuance of
a temporary restraining order, of the Resolution of 11 June 19911 of then Acting Secretary of Labor and
Employment Nieves D. Confesor dismissing the appeal from the Order of 11 December 1990 2 of the Med-
Arbiter which granted the petition for certification election, and of the Order of 15 August 1991 3 denying
reconsideration.

On 22 October 1990, private respondent PT&T Supervisory Employees Union-APSOTEU (UNION, for
brevity) filed a petition before the Industrial Relations Decision of the Department of Labor and Employment
praying for the holding of a certification election among the supervisory employees of petitioner Philippine
Telegraph & Telephone Corporation (PT&T, for brevity). On 29 October 1990, UNION amended its petition to
include the allegation that PT&T was an unorganized establishment employing roughly 100 supervisory
employees from whose ranks will constitute the bargaining unit sought to be established.

On 22 November 1990, PT&T moved to dismiss the petition for certification election on the ground that
UNION members were performing managerial functions and thus were not merely supervisory employees.
Moreover, PT&T alleged that a certified bargaining unit already existed among its rank-and-file employees
which barred the filing of the petition.

On 27 November 1990, respondent UNION opposed the motion to dismiss, contending that under the Labor
Code supervisory employees are not eligible to join the Labor organization of the rank-and-file employees
although they may form their own.

On 4 December 1990, PT&T filed its reply to the opposition and manifested that it is the function of an
employee which is determinative of whether said employee is a managerial or supervisory employee.

On 11 December 1990, the Med-Arbiter granted the petition and ordered that "a certification election . . . (be)
conducted among the supervisory personnel of the Philippine Telegraph & Telephone Corporation
(PT&T)."4Petitioner PT&T appealed to the Secretary of Labor and Employment.

On 24 May 1991, PT&T filed its supplemental appeal and attached copies of the job descriptions and
employment service records of these supervisory employees, including samples of memoranda and notices they
made which purportedly illustrate their exercise of management prerogatives. On 31 May 1991, petitioner
submitted more job descriptions to further bolster its contention.

On 11 June 1991, the Acting Secretary of Labor and Employment Nieves R. Confesor denied petitioner's appeal
for lack of merit. However, she did not rule on the additional evidence presented by PT&T. Instead, she directed
that the evidence "should be scrutinized and . . . considered during the exclusion-inclusion proceedings where
the employees who should be part of the bargaining unit . . . will be determined."5

On 15 August 1991, respondent Undersecretary of Labor and Employment Bienvenido E. Laguesma denied
reconsideration of the resolution dismissing the appeal. Hence, the instant petition anchored on the ground that
public respondent committed grave abuse of discretion in failing to rule on the additional evidence submitted by
petitioner which would have buttressed its contention that there were no supervisory employees in its employ
and which, as a consequence, would have barred the holding of a certification election.
The petition is devoid of merit.

The applicable provision of law in the case at bar is Art. 257 of the Labor Code. It reads —

Art. 257. Petitions in unorganized establishments. — In any establishment where there is no

certified bargaining agent, a certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization (emphasis supplied).

The supervisory employees of PT&T did not yet have a certified bargaining agent to represent them at the time
the UNION, which is legitimate labor organization duly registered with the Department of Labor and
Employment,6 filed the petition for certification election. Since no certified bargaining agent represented the
supervisory employees, PT&T may be deemed an unorganized establishment within the purview of Art. 257 of
the Labor Code.

The fact that petitioner's rank-and-file employees were already represented by a certified bargaining agent doe
not make PT&T an organized establishment vis-a-vis the supervisory employees. After all, supervisory
employees are "not . . . eligible for membership in a labor organization of the rank-and-file employees."7

Consequently, the Med-Arbiter, as sustained by public respondent, committed no grave abuse of discretion in
granting the petition for certification election among the supervisory employee of petitioner PT&T because Art.
257 of the Labor Code provides that said election should be automatically conducted upon filing of the petition.
In fact, Sec. 6 of Rule V, Book V, of the Implementing Rules and Regulations makes it mandatory for the Med-
Arbiter to order the holding of a certification election. It reads —

Sec. 6. Procedure. — Upon receipt of a petition, the Regional Director shall assign the case to a
Med-Arbiter for appropriate action. The Med-Arbiter, upon receipt of the assigned petition, shall
have twenty (20) working days from submission of the case for resolution within which to
dismiss or grant the petition.

In a petition filed by a legitimate organization involving an unorganized establishment, the Med-

Arbiter shall immediately order the conduct of a certification election . . . (emphasis supplied)

Furthermore, PT&T did not possess the legal personality to file a motion to dismiss the petition for certification
election even if based on the ground that its supervisory employees are in reality managerial employees. It is
well-settled that an employer has no standing to question a certification election8 since this is the sole concern of
the workers.9 The only exception to this rule is where the employer has to file the petition for certification
election itself pursuant to Art. 258 10 of the Labor Code because it was requested to bargain collectively. But,
other that this instance, the choice of a collective bargaining agent is purely the internal affair of labor. 11

What PT&T should have done was to question the inclusion of any disqualified employee in the certification
election during the exclusion-inclusion proceedings before the representation officer. Indeed, this is precisely
the purpose of the exclusion-inclusion proceedings, i.e., to determine who among the employees are entitled to
vote and be part of the bargaining unit sought to be certified.

Then Acting Secretary Nieves D. Confesor therefore did not abuse her discretion when she opted not to act
upon the additional evidence by petitioner PT&T. For, the holding of a certification election in an unorganized
establishment is mandatory and must immediately be ordered upon petition by a legitimate labor organization,
which is the case here.

At any rate, the additional evidence presented by petitioner failed to sufficiently show that the supervisory
employees who sought to be included in the bargaining unit were in fact performing managerial functions. On
the contrary, while these supervisory employees did exercise independent judgment which is not routinary or
clerical in nature, their authority was merely recommendatory in character. In all instances, they were still
accountable for their actions to a superior officer, i.e., their respective superintendents. The Solicitor General
succinctly puts it thus —

A perusal of petitioner's annexes . . . would readily show that the power of said supervisors in
matters relating to the exercise of prerogatives for or against rank-and-file employees is not
absolute but merely recommendatory in character. Note that their reports recommending or
imposing disciplinary action against rank-and-file employees always bore the concurrence of one
or two superiors . . . and the job descriptions . . . clearly stated that these supervisors directly
reported to a superior and were accountable to the latter 12 (emphasis supplied).
As the Med-Arbiter himself noted, "It is incredible that only rank-and-file and managerial employees are the
personnel of respondent firm, considering the line of service it offers to the public" 13 and the fact that it
employed 2,500 employees, more or less, all over the country.

A word more. PT&T alleges that respondent UNION is affiliated with the same national federation representing
its rank-and-file employees. Invoking Atlas Lithographic Services, Inc. v. Laguesma, 14 PT&T seeks the
disqualification of respondent UNION. Respondent, however, denied it was affiliated with the same national
federation of the rank-and-file employees union, the Associated Labor Union or ALU. It clarified that the PT&T
Supervisory Employees Union is affiliated with Associated Professional, Supervisory Office, Technical
Employees Union or APSOTEU, which is a separate and distinct national federation from ALU.

IN VIEW OF THE FOREGOING, the Petition for Certiorari and Mandamus with prayer for the issuance of a
temporary restraining order is DENIED.

Costs against petitioner.

SO ORDERED.
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 Dismiss 4 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 regulations 19 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 descriptions 29 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.
STA. LUCIA EAST COMMERCIAL  G.R. No. 162355
CORPORATION,  
Petitioner,  
  Present:
- versus -  
  PUNO, C.J., Chairperson,
  CARPIO,
HON. SECRETARY OF LABOR AND CORONA,
EMPLOYMENT and CHICO-NAZARIO,*and
STA. LUCIA EAST COMMERCIAL LEONARDO-DE CASTRO, JJ.
CORPORATION WORKERS  
ASSOCIATION (CLUP LOCAL  
CHAPTER), Promulgated:
Respondents.  
August 14, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
 
DECISION
 
CARPIO, J.:
 
The Case
 
This is a petition for review[1]assailing the Decision[2]promulgated on 14 August 2003 as well as the
Resolution[3]promulgated on 24 February 2004 of the Court of Appeals (appellate court) in CA-G.R. SP No.
77015. The appellate court denied Sta. Lucia East Commercial Corporations (SLECC) petition for certiorari
with prayer for writ of preliminary injunction and temporary restraining order. The appellate court further ruled
that the Secretary of Labor and Employment (Secretary) was correct when she held that the subsequent
negotiations and registration of a collective bargaining agreement (CBA) executed by SLECC with Samahang
Manggagawa sa Sta. Lucia East Commercial (SMSLEC) could not bar Sta. Lucia East Commercial Corporation
Workers Associations (SLECCWA) petition for direct certification.

The Facts
 
The Secretary narrated the facts as follows:
On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its
chartered local, instituted a petition for certification election among the regular rank-and-file
employees of Sta. Lucia East Commercial Corporation and its Affiliates, docketed as Case No.
RO400-0202-RU-007. The affiliate companies included in the petition were SLE Commercial,
SLE Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home
Gallery and Essentials.
 
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to
inappropriateness of the bargaining unit. CLUP-Sta. Lucia East Commercial Corporation and its
Affiliates Workers Union appealed the order of dismissal to this Office on 14 September
2001. On 20 November 2001, CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
Workers Union [CLUP-SLECC and its Affiliates Workers Union] moved for the withdrawal of
the appeal. On 31 January 2002, this Office granted the motion and affirmed the dismissal of the
petition.
 
In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union]
reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers
Association (herein appellant CLUP-SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It was issued Certificate of Creation of a
Local Chapter No. RO400-0110-CC-004.
 
 On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC]
employs about 115 employees and that more than 20% of employees belonging to the rank-and-
file category are its members. [CLUP-SLECCWA] claimed that no certification election has
been held among them within the last 12 months prior to the filing of the petition, and while
there is another union registered with DOLE-Regional Office No. IV on 22 June 2001 covering
the same employees, namely [SMSLEC], it has not been recognized as the exclusive bargaining
agent of [SLECCs] employees.
 
On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it has
voluntarily recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its
regular rank-and-file employees, and that collective bargaining negotiations already commenced
between them. SLECC argued that the petition should be dismissed for violating the one year
and negotiation bar rules under pars. (c) and (d), Section 11, Rule XI, Book V of the Omnibus
Rules Implementing the Labor Code.
 
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-
file employees and registered with DOLE-Regional Office No. IV on 9 January 2002.
 
In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and Comment
to [SLECCS] Motion to Dismiss. It assailed the validity of the voluntary recognition of
[SMSLEC] by [SLECC] and their consequent negotiations and execution of a CBA. According
to [CLUP-SLECCWA], the same were tainted with malice, collusion and conspiracy involving
some officials of the Regional Office. Appellant contended that Chief LEO Raymundo
Agravante, DOLE Regional Office No. IV, Labor Relations Division should have not approved
and recorded the voluntary recognition of [SMSLEC] by [SLECC] because it violated one of the
major requirements for voluntary recognition, i.e., non-existence of another labor organization in
the same bargaining unit. It pointed out that the time of the voluntary recognition on 20 July
2001, appellants registration as [CLUP-SLECC and its Affiliates Workers Union], which covers
the same group of employees covered by Samahang Manggagawa sa Sta. Lucia East
Commercial, was existing and has neither been cancelled or abandoned. [CLUP-SLECCWA]
also accused Med-Arbiter Bactin of malice, collusion and conspiracy with appellee company
when he dismissed the petition for certification election filed by [SMSLEC] for being moot and
academic because of its voluntary recognition, when he was fully aware of the pendency of
[CLUP-SLECCWAs] earlier petition for certification election.
 
Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC] reiterated their respective
positions on the validity and invalidity of the voluntary recognition. On 29 July 2002, Med-
Arbiter Bactin issued the assailed Order.[4]
  
The Med-Arbiters Ruling
  
In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-SLECCWAs petition for
direct certification on the ground of contract bar rule. The prior voluntary recognition of SMSLEC and the CBA
between SLECC and SMSLEC bars the filing of CLUP-SLECCWAs petition for direct certification. SMSLEC
is entitled to enjoy the rights, privileges, and obligations of an exclusive bargaining representative from the time
of the recording of the voluntary recognition. Moreover, the duly registered CBA bars the filing of the petition
for direct certification.

CLUP-SLECCWA filed a Memorandum of Appeal of the Med-Arbiters Order before the Secretary.

 
The Ruling of the Secretary of Labor and Employment

  
In her Decision promulgated on 27 December 2002, the Secretary found merit in CLUP-SLECCWAs
appeal. The Secretary held that the subsequent negotiations and registration of a CBA executed by SLECC with
SMSLEC could not bar CLUP-SLECCWAs petition. CLUP-SLECC and its Affiliates Workers Union
constituted a registered labor organization at the time of SLECCs voluntary recognition of SMSLEC. The
dispositive portion of the Secretarys Decision reads:
 
WHEREFORE, the appeal is hereby GRANTED and the Order of the Med-Arbiter dated 29 July
2002 is REVERSED and SET ASIDE. Accordingly, let the entire records of the case be
remanded to the Regional Office of origin for the immediate conduct of a certification election,
 subject to the usual pre-election conference, among the regular rank-and-file employees of
[SLECC], with the following choices:
 
1. Sta. Lucia East Commercial Corporation Workers Association CLUP Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East Commercial; and
3. No Union.

Pursuant to Rule XI, Section II.1 of Department Order No. 9, appellee corporation is hereby
directed to submit to the office of origin, within ten (10) days from receipt hereof, the certified
list of its employees in the bargaining unit or when necessary a copy of its payroll covering the
same employees for the last three (3) months preceding the issuance of this Decision.
 
Let a copy of this Decision be furnished the Bureau of Labor Relations and Labor Relations
Division of Regional Office No. IV for the cancellation of the recording of voluntary recognition
in favor of Samahang Manggagawa sa Sta. Lucia East Commercial and the appropriate
annotation of re-registration of CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
Workers Union to Sta. Lucia East Commercial Corporation Workers Association-CLUP Local
Chapter.
 
SO DECIDED.[5]
 
SLECC filed a motion for reconsideration which the Secretary denied for lack of merit in a Resolution
dated 27 March 2003. SLECC then filed a petition for certiorari before the appellate court.
 
The Ruling of the Appellate Court
 
The appellate court affirmed the ruling of the Secretary and quoted extensively from the Secretarys
decision. The appellate court agreed with the Secretarys finding that the workers sought to be represented by
CLUP-SLECC and its Affiliates Workers Union included the same workers in the bargaining unit represented
by SMSLEC. SMSLEC was not the only legitimate labor organization operating in the subject bargaining unit
at the time of SMSLECs voluntary recognition on 20 July 2001. Thus, SMSLECs voluntary recognition was
void and could not bar CLUP-SLECCWAs petition for certification election.

The Issue
 
SLECC raised only one issue in its petition. SLECC asserted that the appellate court commited a reversible
error when it affirmed the Secretarys finding that SLECCs voluntary recognition of SMSLEC was done while a
legitimate labor organization was in existence in the bargaining unit.
 
The Ruling of the Court
 
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the appellate court.
 
Legitimate Labor Organization
 
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.[6] 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.[7]

Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit. We explained the concept of a bargaining unit in San Miguel Corporation v. Laguesma,
[8]where we stated that:
 
 A bargaining unit is a group of employees of a given employer, comprised of all or less than all
of the entire body of employees, consistent with equity to the employer, indicated to be the best
suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.
 
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the
will of the employees (Globe Doctrine); (2) affinity and unity of the employees interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status.
 
Contrary to petitioners assertion, this Court has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor conclusive  in the determination of what
constitutes an appropriate bargaining unit.
 
However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of
the two corporations are related.[9]
 
A Legitimate Labor Organization Representing
An Inappropriate Bargaining Unit
 
CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its Affiliates
Workers Union subsequently re-registered as CLUP-SLECCWA, limiting its members to the rank-and-file of
SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union was a legitimate labor
organization at the time of SLECCs voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by
themselves, decide whether CLUP-SLECC and its Affiliates Workers Union represented an appropriate
bargaining unit.
 
The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration,
unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated
in Sections (a) to (c) of Article 239 of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION, HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION, SHOULD BE
CONSIDERED AS HAVING ACQUIRED JURIDICAL PERSONALITY WHICH MAY NOT BE ATTACKED
COLLATERALLY. THE PROPER PROCEDURE FOR SLECC IS TO FILE A PETITION FOR
CANCELLATION OF CERTIFICATE OF REGISTRATION[11]OF CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION AND NOT TO IMMEDIATELY COMMENCE VOLUNTARY RECOGNITION
PROCEEDINGS WITH SMSLEC.
 
SLECCs Voluntary Recognition of SMSLEC
 
The employer may voluntarily recognize the representation status of a union in unorganized establishments.
[12] SLECC WAS NOT AN UNORGANIZED ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED
SMSLEC AS ITS EXCLUSIVE BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC AND ITS
AFFILIATES WORKERS UNION FILED A PETITION FOR CERTIFICATION ELECTION ON 27 FEBRUARY
2001 AND THIS PETITION REMAINED PENDING AS OF 20 JULY 2001. THUS, SLECCS VOLUNTARY
RECOGNITION OF SMSLEC ON 20 JULY 2001, THE SUBSEQUENT NEGOTIATIONS AND RESULTING
REGISTRATION OF A CBA EXECUTED BY SLECC AND SMSLEC ARE VOID AND CANNOT BAR CLUP-
SLECCWAS PRESENT PETITION FOR CERTIFICATION ELECTION.
EMPLOYERS PARTICIPATION IN A PETITION FOR CERTIFICATION ELECTION
 
We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for
certification election. In petitions for certification election, the employer is a mere bystander and cannot oppose
the petition or appeal the Med-Arbiters decision. The exception to this rule, which happens when the employer
is requested to bargain collectively, is not present in the case before us.[13]
 
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as
the Resolution promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.