Associated Labor Unions v.

Ferrer-Calleja
GR L-77282 | May 5, 1989
J. Regalado

Petitioner: ASSOCIATED LABOR UNIONS (ALU)

Respondents: HON. PURA FERRER-CALLEJA, as Director of the Bureau of Labor Relations, Ministry of
Labor and Employment; PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); SOUTHERN
PHILIPPINES FEDERATION OF LABOR (SPFL) and GAW TRADING, INC

Topic: CBA — Ratification

Case Summary: ALU, SPFL and GLLU were unions of the workers of GAW Trading, Inc. ALU sought
recognition as the SEBA through a letter sent to the management of GAW. Acting on the letter, GAW
recognized ALU as the SEBA and fixed the date for negotiations for a CBA. Pending negotiations, SPFL
went on a strike, pressuring the management to make a turnabout with its recognition of ALU as the
employees’ SEBA. Despite the obvious dissension, the management and ALU executed the CBA, which
was later filed with the Regional Office. The SC held that the CBA was void since ALU and GAW Tradings
failed to meet the jurisdictional preconditions for a valid collective bargaining. Moreover, the court took
note of the evidence submitted by SPFL and GLLU on appeal that majority of the employees who
supposedly “ratified” the CBA now expressly repudiate and deny the negotiations that led to the CBA.
While raised only on appeal, the Court nonethless took cognizance of the same following the rule that
technical rules of procedure should not be applied strictly in labor disputes, especially given that the
additional evidence presented had weighty significance in relation to the case.

Doctrine: While industrial stability is deemed one of the paramount purposes of CBA negotiations., any
stability derived from CBAs must be subordinated to the employees' freedom of choice.

The requirement of majority ratification is one means to harmonize these goals. The
purpose of the requirement is precisely to inform the employees in the bargaining unit of
the contents of said agreement so that they could intelligently decide whether to accept the
same or not.

CBAs entered into which do not foster industrial stability, such as where the identity of the representative
is in doubt, may noy be considered as one that was entered validly so as to warrant application of the
contract bar rule.

Application
On top of the dubious standing of the union as the SEBA, the CBA’s ratification was also questioned by
the presentation of evidence by the other unions which purport that the majority who supposedly
“ratified” the contract now actually deny having ratified the same and vehemently repudiates the CBA.
For the SC, this, on top of the union’s failure to meet the jurisdictional preconditions for valid collective
bargaining, is enough to hold the CBA as defective that could not produce any legal effect (ie. trigger the
contract bar rule).

The assembly of the members of ALU wherein the agreement in question was allegedly explained does
not cure the defect. The contract is intended for all employees and not only for the members of the
purported representative alone.

Facts:
 1. On May 7, 1986, the Associated Labor Unions (ALU) informed GAW Trading Inc that majority of the
latter’s employees have authorized ALU to be their sole and exclusive bargaining representative.
a. As such, ALU requested GAW for a conference for the execution of an initial CBA.
b. On the same day, GAW recognized ALU as the SEBA for the majority of its employees and set
the time for conference at 4:00PM on May 12, 1986 at the Pillsbury Office, Aboitiz Bldg in
Cebu City.

2. On May 9, at about 1:00PM, the Southern Philippines Federation of Labor (SPFL) undertook a
strike after it failed to get the management of GAW to sir for a conference respecting its demands it
presented the morning of the same day.
a. Basically, SPFL was putting pressure on GAW’s management to make a turnabout of its
standing recognition of ALU as the SEBA of the employees.

3. This later prompted GAW’s management to file a TRO/Injunction with the Labor Arbiter, which the
latter granted since it held that the strike was illegally made.

4. On May 15, GAW signed and executed a CBA which it negotiated with ALU.

5. On May 16, GAW Lumad Labor Union Federation (GLLU-FED) filed a certification election, but the
Med-Arbiter had to dismiss the complaint since the union failed to comply with the subscription
requirement.
a. As such, it treated GLLU as merely an intervenor until compliance thereof.

6. On May 27, the CBA executed between GAW’s management and ALU, on behalf of the majority of
GAW’s employees, was duly filed with the Ministry of Labor and Employment in Cebu City.

7. On June 11, 1986 and despite a CBA already being filed, the Med-Arbiter ruled for the holding of
certification election in all branches of GAW Trading Inc. in Cebu.
a. ALU filed a motion for reconsideration, which the Med-Arbiter treated as an appeal and
transmitted the same to the BLR.

8. On Aug. 13, 1986, the BLR granted the appeal and set aside the order of certification election on the
ground that the CBA has been effective and valid and the contract bar rule is applicable.
a. SPFL and GLLU appealed, adducing as evidence documents that show that 181 out of 281 of
GAW workers who supposedly “ratified” the CBA now repudiate the same.

9. BLR: reversed its previous decision.

a. Held that the CBA was defective and thus could not have produced any legal effect as to
bar the holding of the certification election.

10. As such, ALU instituted this instant special civil action for certiorari and prohibition to overturn
the decision of the respondent director, alleging grave abuse of discretion in granting the petition for
certification election despite the clear applicability of the contract bar rule.

Ratio Decidendi:
1. W/N THE CBA WAS DEFECTIVE — YES.
a. Gen: The mechanics of collective bargaining are set in motion only when the ff.
jurisdictional preconditions are present:
i. (1) possession of the status of majority representation by the employees'
representative in accordance with any of the means of selection and/or designation
provided for by the Labor Code;
ii. (2) proof of majority representation; and
iii. (3) a demand to bargain under Article 251, paragraph (a), of the New Labor Code.
 b. ITC, the standing of ALU as the SEBA is dubious to say the least, since the management
merely indicated that “it was not against the desire of its workers” and just required ALU to
submit proof that it was supported by the majority.
i. The only express proof that it was supported by the majority is the CBA itself entered
two days after.

c. Further, it seems clear that the act of the employer hastily recognizing ALU as the SEBA
was an improvident move considering that the other two unions of the majority of its
employees held a strike prior the negotiations.

d. Re: MOLE Certification: void since there was a failure to properly determine with legal
certainty whether the union enjoyed a majority representation.

e. Re: Ratification: Another ground for which the CBA may be annulled is the finding that
181 of the 281 workers who “ratified” it now strongly and vehemently deny and repudiate the
negotiations and ratification of the CBA.
i. While ALU claims that only 7 of the repudiating workers belong to the total number
who allegedly ratified the agreement, such unsubstantiated contention weighed
against the factual findings of the regional director cannot negate the fact that the
CBA will not promote industrial stability.
ii. The allegation that there were "no impartial members of the unit" is immaterial. The
purpose of the requirement is precisely to inform the employees in the
bargaining unit of the contents of said agreement so that they could
intelligently decide whether to accept the same or not.
1. The assembly of the members of ALU wherein the agreement in question was
allegedly explained does not cure the defect. The contract is intended for all
employees and not only for the members of the purpoted representative
alone.

f. Moreover, it bears noting that technical rules of procedure do not strictly apply in labor
disputes.
i. As such, though the evidence was merely adduced on appeal, the Court allowed the
recognition of such considering the weighty significance thereof.

g. Thus, since the CBA was defective, the contract bar rule finds no application in this case.
i. Plus, assuming that the CBA was valid, the petition for certification was already filed
before the filing of the CBA with the Regional Office on May 27. In any case, the
contract bar rule does not apply.

- RULING: WHEREFORE, the order of the public respondent for the conduct of a certification
election among the rank-and-file workers of respondent GAW Trading Inc. is AFFIRMED. The
temporary restraining order issued in this case pursuant to the Resolution of March 25, 1987 is
hereby lifte