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Toaz - Info Labrel Casesdocx PR
Toaz - Info Labrel Casesdocx PR
2. ID.; ID.; ID.; ‗PIECE MEAL‘ ELECTION FOR UNION On February 17-23, 1984, in Metro Manila and on February 20,
OFFICERS; NOT ALLOWED. — The May 4, 1984 special election 1984 in Cebu/Mactan area, PALEA held its election for National
in Cebu and Mactan is without factual and legal justification. As Officers. Herein petitioner Miguel J. Villaor won the election over
aptly observed by the Solicitor General, the same was resorted to respondent Mario S. Santos for the presidency, Villaor obtaining
only to accommodate the herein other private respondents — 1,954 votes to Santos‘ 1,809 votes, or a difference of 145 votes.
"There is absolutely no justification for calling the said May 4, 1984 Likewise, herein petitioner Cecilio V. Bautista won against Carlos
elections. Obviously, such move was resorted by the PALEA V. Bandalan for the position of vice-president, Bautista garnering
Comelec to accommodate defeated candidates for president and 1,264 votes as against Bandalan‘s 1,220 votes, or a difference of
vice-president in the February 20, 1984 election, Mario and Carlos 44 votes. They were proclaimed on February 25, 1984.
Bandalan (respondent herein), and enable them to overcome the
winning margin of winning candidates therein, Villaor and Bautista Subsequently, the defeated candidates - respondent Mario S.
(herein petitioners), who won by only 145 and 44 votes Santos, for president; respondent Carlos V. Bandalan, for vice-
respectively. president; and Antonio Josue, for secretary, filed their election
protests with the PALEA COMELEC within the 30 day
3. ID.; ID.; RIGHT OF UNION MEMBERS TO VOTE; NOT reglementary period, as provided under the Constitution and By-
DEPRIVED IN CASE AT BAR. — It is the contention of the Laws of the Association, on the grounds that (1) a number of votes
protestants that a great number of PALEA members were deprived in precincts 1, 4 and 4-A were segregated and not counted; and (2)
of their right to vote because it had been tradition since 1969 to a substantial number of PALEA members in Cebu/Mactan area
hold elections in Cebu and Mactan for two days; and that the were not able to vote on February 20, 1984 by reason of the voting
holding of elections for only one day was done without notice to all days having been reduced from two (February 20-21, 1984) to just
PALEA members in said station. On the other hand, it is the one day (February 20, 1984). Respondent Mario S. Santos filed his
contention of the petitioners that the change was agreed upon by protest on March 12, 1984; respondent Carlos Bandalan filed his
all the candidates concerned in a conference held at SM CD protest on February 27, 1984; and Antonio Josue on March 14,
Office, Nichols Fields, on February 20, 1982. On said controversy, 1984, before PALEA COMELEC composed of the herein other
while public respondent found for the protestants, the Solicitor respondents.chanrobles.com.ph : virtual law library
General is for the petitioners. Be that as it may, it is a fact that the
PALEA COMELEC issued on February 15, 1984 a bulletin Meanwhile, on March 6, 1984, respondent Mario S. Santos sent
announcing that the elections in the area would be only on petitioner Miguel J. Villaor a letter, the body of which reads —
February 20, 1984. Hence, it cannot be said that the voters therein
were not duly notified. In addition to this, worth mentioning is the "We formally turnover to you PALEA‘s CBA proposals in the
comment of the Solicitor General, which reads: ". . . . Besides, we ongoing PAL-PALEA CBA negotiations. Other pertinent records
do not see how these 193 members could have failed to know are either accompanying these proposals or on file with the office.
about the one-day election. It was held within the office premises,
and, surely, they must have been told of such fact by the other "Other PALEA properties, including the President‘s car and
members who voted in the election. It would appear that these 193 another vehicle, shall also be turned over to you at the appropriate
members simply did not bother to vote for one reason for another. time.
And we do not see the necessity of holding a two-day election in
said areas with only 500 members, and hold a one-day election in "On the CBA negotiation, we would like to inform you that we are
Metro Manila area which has about 4,000 members. That it is the filing a manifestation with the Director-Bureau of Labor Relations in
tradition to hold a two-day election in said areas is not a valid order to withdraw PALEA‘s declaration of deadlock. This will give
you and the other officers-elect a free hand to continue with the and canvassing of votes as hereinabove indicated.
PAL-PALEA CBA negotiation.
SO RESOLVED."cralaw virtua1aw library
"As we have the common objective of protecting and promoting the
interests of our members, we wish yon all the luck and best of On May 3, 1984, petitioners filed a motion with the Med-Arbiter to
everything for our members and our union."cralaw virtua1aw library cite COMELEC members for contempt, to suspend them from
office, and to annul their Resolution of April 27, 1984 "for being
On April 17, 1984, petitioners filed their joint Comment/Answer to issued without jurisdiction." On the same day, a notice was issued
the election protests cases, and two (2) basic issues were joined, directing the parties and the petitioners‘ counsel to appear for
to wit:chanrob1es virtual 1aw library hearing at 1:30 p.m. on May 3 and 4, 1984, On the May 3, 1984
scheduled hearing, none of the parties appeared, and on the May
1. Whether or not the more than 40 to 47 ballots cast by alleged 4, 1984 scheduled hearing, only the petitioners‘ counsel
qualified PALEA members in Precincts 1, 4 and 4-A which were appeared.chanrobles virtualawlibrary
segregated and invalidated actually resulted in the chanrobles.com:chanrobles.com.ph
disenfranchisement of said PALEA voters; and
In conformity with the Resolution of April 27, 1984, respondents
2. Whether or not the qualified PALEA voters in the Cebu/Mactan PALEA COMELEC members counted the segregated ballots in
areas were deprived of their right to vote as a result of the sudden precincts 1, 4 and 4-A on May 4, 1984 and likewise held on said
change from the two day traditional election days in previous years date a special election in Cebu/Mactan area. As a result of the
to just one day. election of May 4, 1984, Mario S. Santos, Carlos V. Bandalan and
Ernesto Galang, were proclaimed on May 5, 1984 as the duly
On the basis of the election protests and the Comment/Answer elected President, Vice-President and Secretary respectively by
thereto, respondent PALEA COMELEC members, in a letter dated PALEA COMELEC.
April 25, 1984, informed the parties that the ballot boxes in the
questioned precincts would be opened and their voters list On May 8, 1984, Petitioner Miguel J. Villaor filed a motion to annul
retrieved on April 25, 1984 at 10:00 in the morning. the May 4, 1984 election and the proclamation of the winners
contending that these were "premature" as no action had yet been
On April 24, 1984, herein petitioners Miguel J. Villaor and Cecilio taken on the motion to declare the April 27, 1984 Resolution void.
V. Bautista, and Ernesto P. Galang filed a complaint/petition with
the Regional Office of the Ministry of Labor and Employment On May 31, 1984, the respondents filed their omnibus answer to
(MOLE) against the PALEA COMELEC members, seeking their the petition and the subsequent motions filed by the petitioners.
disqualification from their positions as such on the ground of
alleged partiality for the protestants. The Regional Office On the same date, May 31, 1984, herein respondents Mario S.
summoned the parties to appear before Med-Arbiter Renato D. Santos and Carlos V. Bandalan filed their Notice To Admit
Parungao "on the 25th of April at 9:30 a.m."cralaw virtua1aw Intervention (Record, p. 128) in the case filed by Villaor, Et. Al.
library against the PALEA COMELEC members. The intervention was
allowed when therein petitioners withdrew their opposition thereto.
On April 25, 1984, herein petitioners Miguel J. Villaor and Cecilio The intervenors likewise manifested that they were adopting the
V. Bautista, and respondent PALEA COMELEC member Edwardo position paper filed by the respondents therein as their own.
C. Flora appeared before the Med-Arbiter who issued an Order
"enjoining the respondents from opening the ballot boxes subject On June 5, 1984, petitioners filed a motion for injunction alleging
of the controversy." On the same day, at 10:30 a.m., respondents that Mario S. Santos and "his cohorts" had inveigled the Board of
Octavio Pineda and Rafael Samson proceeded to open the ballot Directors to adopt a resolution including Santos in the union panel
boxes.chanroblesvirtualawlibrary and that as a result thereof, the PAL refused to continue
negotiating with the union.
On April 27, 1984, Respondents, sitting en banc, resolved the
election protests, the dispositive portion of which reads — On June 8, 1984, herein respondents Mario S. Santos and Carlos
V. Bandalan filed their answer in intervention alleging that they
"WHEREFORE, AND IN VIEW OF ALL THE FOREGOING, THE were duly proclaimed officers of the union and the ones recognized
PALEA COMELEC HEREBY RESOLVES, AS IT HEREBY by the Board of Directors.
RESOLVED.
On the same day, June 8, 1984, the Med-Arbiter issued a
"1. To set aside the proclamation dated February 25, 1984 of temporary restraining order "enjoining the respondents and the
Miguel J. Villaor as PALEA President, Cecilio V. Bautista as Vice- intervenors to cease and desist from acting as PALEA President,
President and Ernesto P. Galang as Secretary; Vice-President and Secretary in order to maintain the status quo
prevailing prior to the filing of the instant petition." The Med-Arbiter
"2. To count the segregated votes of qualified PALEA members, as furthermore directed them to show cause why injunction should not
verified, in Precincts 1, 4 and 4-A. The counting shall be held on be granted in favor of the petitioners. The intervenors filed an
May 4, 1984 at 1300 H at the PALEA COMELEC Office; opposition on June 19, 1984.
"3. To hold a special election on May 4, 1984 from 0500 H to 1700 On June 27, 1984, the Med-Arbiter issued a writ of preliminary
H, in Cebu/Mactan to allow PALEA members, not able to vote on injunction (Ibid., pp. 116-117) "enjoining both the respondents and
February 20, 1984, to cast their votes for the positions of intervenors to cease and desist from further committing the acts
President, Vice President and Secretary; and complained of until the intra-union conflict and all its attendant
incidents are finally resolved." Moreover, the Med-Arbiter declared
"4. To proclaim the winning candidates for PALEA President, Vice- that "Miguel J. Villaor remains as President of the Philippine
President and Secretary immediately after the election, counting Airlines Employees‘ Association (PALEA) unless ordered
otherwise."cralaw virtua1aw library Public respondent, in compliance with the June 16, 1985
Resolution of the First Division of this Court, filed his comment
The Med-Arbiter, after hearing, issued an Order dated August 1, (Ibid., pp. 327-374) on August 8, 1985.
1984, (Ibid, pp. 119-127) the dispositive portion of which reads —
The First Division of this Court, in a Resolution dated August 26,
"WHEREFORE, premises considered the petition is hereby 1985 (Ibid., p. 374-a) resolved (a) to give due course to the
granted and let an order issue, as it is hereby petition; and (b) to require the parties to submit simultaneous
issued:jgc:chanrobles.com.ph memoranda within thirty (30) days from notice.
"a) Declaring respondents Octavio Pineda, Rafael Samson and Petitioners filed their memorandum (Ibid., pp. 391-435) on October
Edwardo Flora as disqualified from their office as chairman and 28, 1985; Private respondents filed their memorandum (Ibid., pp.
members, respectively, of the PALEA Commission on Elections 438-464) on November 5, 1985; and public respondent, in a
and ordering them to desist from further performing their functions "Motion" dated November 19, 1985 (Ibid., pp. 462-464),
as Comelec officers; respectfully moved that the comment he has filed be treated and
considered as memorandum. Said motion was granted by the First
"b) Declaring as null and void Resolution dated 27 April 1984, Division of this Court in its Resolution of January 13, 1986 (Ibid., p.
promulgated ex-parte in complete violation of Sec. 6, Article XIX of 476).
the PALEA Constitution and By-laws;
The sole issue in this case is —
"c) Declaring the special election conducted by the respondents
(PALEA Comelec) on 4 May 1984 as invalid and that the results Whether or not the decision of public respondent Bureau of Labor
thereof, proclaiming Mario S. Santos, Carlos V. Bandalan, as Relations Director issued on November 14, 1984 was promulgated
President and Vice-President, respectively, as likewise declared with grave abuse of discretion amounting to lack of jurisdiction.
null and void;
In his Decision of November 14, 1984 (p. 7, Ibid., p. 39), Public
"d) The writ of preliminary injunction dated 27 June 1984, enjoining respondent BLR Director Cresenciano B. Trajano, in reversing
intervenors Mario S. Santos and Carlos V. Bandalan as President Med-Arbiter Renato D. Parungo‘s ruling disqualifying therein
and Vice-President, of PALEA, but, also from interfering with the respondents as members of the PALEA COMELEC, stressed that
on-going CBA negotiations between the PAL Management and the Philippine Constitution assures the right of workers to self-
PALEA and also from interfering in any manner with the operation organization and this right implies the freedom of unions from
of the activities of PALEA, shall continue to remain binding and interference by employers and the government; that it includes the
effective until this intra-union conflict and its attendant aspects are right of unions to elect their officers in full freedom and guarantee
finally resolved and terminated, in which case the said injunctive that the government refrains from any interference which would
writ shall likewise be dissolved."cralaw virtua1aw library restrict this right or impede its lawful exercise; and that "It shall be
unlawful for any person," Article 247 of the Labor Code states, "to
Therein respondent PALEA COMELEC members and intervenors unduly interfere with employees and workers in their exercise of
Mario S. Santos and Carlos V. Bandalan appealed the said Order the right to self-organization." With the foregoing as his premise,
of the Med-Arbiter to the Bureau of Labor Relations he opined that the right of self-organization is impaired when the
(BLR).chanrobles.com : virtual law library government dissolves a union COMELEC and proceeds to resolve
an election protest pending before it.chanrobles.com:cralaw:red
BLR Director Cresenciano B. Trajano, in a decision dated
November 14, 1984, (Ibid., pp. 33-42) set aside the Med-Arbiter‘s In this connection, attention is invited to Article 226 of the Labor
Orders of June 27, 1984 and August 1, 1984, and at the same time Code, which reads —
dismissed the petition of Miguel J. Villaor and Cecilio V. Bautista
for lack of merit. Hence, the instant petition (Ibid., pp. 56-115). "ART. 226. Bureau of Labor Standards. — The Bureau of Labor
Relations and the Labor Code relations divisions of the regional
The First Division of this Court, in a Resolution dated January 16, offices of the Department of Labor (now the Ministry of Labor and
1985, resolved without giving due course to the petition to require Employment) shall have original and exclusive authority to act, at
the respondents to comment within ten (10) days from notice their own initiative or upon request of either or both parties, on all
thereof (Ibid., p. 203). inter-union and intra-union conflicts and all disputes arising from or
affecting labor-management relations in all workplaces whether
In compliance with the said Resolution, private respondents filed agricultural or non-agricultural, except those arising from the
their comment (Ibid., pp. 237-247) on March 18, 1985. implementation of collective bargaining agreements which shall be
the subject of grievance procedure and or voluntary
On March 28, 1985, petitioners filed their "Reply" to the comment arbitration."cralaw virtua1aw library
filed by the private respondents.
as supplemented by Policy Instruction No. 6 — relating to the
On March 29, 1985, the Solicitor General filed his comment. In the distribution of jurisdiction over labor cases -
same, the Solicitor General concluded that it is his opinion that
respondent BLR Director committed reversible error in setting "x x x
aside the Med-Arbiter‘s Orders, and recommended that the instant
petition be given due course. "3. The following cases are under the exclusive original jurisdiction
of the Med-Arbiter Section of the Regional Office:chanrob1es
Petitioners, in compliance with the Resolution of the First Division virtual 1aw library
of this Court dated April 22, 1985 (Ibid., p. 273) filed on May 17,
1985 their "Reply" to the "Comment" filed by the Solicitor General. x x x
Election within 30 days after the proclamation of the winning
candidates and the Commission on Election, sitting en banc, shall
"b) Intra-union cases."cralaw virtua1aw library hear and decide such protest . . .
From the aforequoted provisions, it is safe to conclude that the From the aforequoted provision, as opined by the Solicitor
freedom of the unions from interference from the government General, "once a candidate concedes the election, he is precluded
presupposes that there is no inter-union or intra-union conflict. In from filing a protest." Private respondent Mario S. Santos, prior to
the instant case, there is no question that there is an intra-union filing his election protest, in his letter of March 6, 1984 to herein
conflict. petitioner Miguel J. Villaor, had already unequivocably conceded
the position of president to the latter.
Public respondent further opined that the COMELEC should have
been allowed to discharge its functions without prejudice to the Likewise, from the aforequoted provision, it is mandatory for the
right of petitioners to apply for relief from the Board of Directors. PALEA COMELEC to set the election protest for appropriate
He averred that under the union constitution, the Board has the hearing on the issues raised before it could finally resolve the
power to remove or discipline, by three-fourths‘ votes, any union case. In the instant case, it is undisputed that the PALEA
officer including the president himself or the members of the COMELEC, without conducting any formal hearing on the issues
COMELEC, and accordingly concluded that only after the remedy raised, on the basis of the pleadings of the parties, informed the
failed could the petitioners be allowed to bring their case to the parties in a letter dated April 23, 1984 that the ballot boxes in the
Med-Arbiter. In short, the petitioners should first exhaust questioned precincts would be opened and their voters‘ list
administrative remedies before bringing their case to the Med- retrieved on April 25, 1984 at 10:00 in the morning. Likewise, on
Arbiter. April 27, 1984, the PALEA COMELEC, without the benefit of formal
hearing resolved the election protest by setting aside the
Anent this opinion of public respondent, petitioners averred that proclamation dated February 25, 1984 of Miguel J. Villaor as
pursuant to Section 4 of Article VII of the PALEA Constitution and PALEA President, Cecilio V. Bautista as Vice-President, and
By-Laws, which reads:jgc:chanrobles.com.ph Ernesto P. Galang as Secretary; directing the canvassing of the
segregated ballots in precincts 1, 4, and 4-A; and directing the
"Section 4 — As a fact-finding body, the Chairman and members holding of a special election in Cebu and Mactan on May 4, 1984.
of the Board of Inquiry (created by the President) shall have the
sole power to conduct investigation on involving an act specified Besides, it appears that respondents Octavio Pineda and Rafael
under Article 18, Section of this Constitution committed by any Samson intentionally disregarded the summons of Med-Arbiter
officer, member of the board or members of the Association and Renato D. Parungo to appear before him at 9:00 a.m. on April 25,
submit thereto reports and recommendations based on their 1984 so that they can carry out their plan to open the ballot boxes.
findings to the Board of Directors who shall have the sole power to Please note that the herein petitioners alleged that Med-Arbiter
render decisions and impose penalty to howsoever is guilty."cralaw Parungo issued a restraining order enjoining the respondents, as
virtua1aw library PALEA COMELEC members, to refrain from proceeding with their
plan to open the ballot boxes. Said restraining order was
The Board of Inquiry, created by the President, has the sole power personally served on respondent Edwardo Flora who immediately
to investigate cases involving acts committed by any officer, called the PALEA office and after respondent Octavio Pineda was
member of the Board or member of the Association that the power on the phone, Flora informed him, in the presence of Med-Arbiter
of the Board to remove or discipline any union officer, including the Parungo, about the restraining order served upon them.
President himself or the COMELEC members cannot be exercised Notwithstanding said information, respondents Pineda and
until the Board of Inquiry submits its report and recommendation Samson went ahead and opened the ballot boxes as planned. This
based on their findings on the acts complained of after due allegation of petitioners was never denied by the respondents.
investigation. With this as a premise, petitioners claim that in their Respondent PALEA COMELEC members, likewise disregarded
Reply and Opposition dated September 14, 1984, in connection Med-Arbiter Renato D. Parungo‘s notice for them to appear for
with the three (3) consolidated cases before Med-Arbiter Napoleon hearing at 1:30 p.m. on May 3 and 4, 1984.
V. Fernando, Nos, NLR-LRD-M-6-185-184, NLR-LRD-M6-156-84
and NLR-LRD-N-6-204-84, they called attention to the fact that The May 4, 1984 special election in Cebu and Mactan is without
they have exhausted administrative remedies provided in the factual and legal justification. As aptly observed by the Solicitor
PALEA Charter — On May 17, 1984, PALEA President Miguel J. General, the same was resorted to only to accommodate the
Villaor created the Special Board of Inquiry and appointed Rey herein other private respondents —
Taggueg, as chairman, Ildefonso Medina and Rodolfo de Guzman,
as members, however, the Board refused to approve the newly "There is absolutely no justification for calling the said May 4, 1984
created Special Board of Inquiry for fear that they themselves may election. There is no law which allows ‗piece meal‘ elections.
be the first to be subjected to investigation for the acts complained Obviously, such move was resorted to by the PALEA Comelec to
of in Case No. NCR-LRD M-6-156-84. This claim of petitioners was accommodate defeated candidates for president and vice-
never denied by the private respondents. president in the February 20, 1984 election, Mario and Carlos
Bandalan (respondent herein), and enable them to overcome the
Accordingly, there is no question that the Med-Arbiter rightly winning margin of winning candidates therein, Villaor and Bautista
exercised jurisdiction over the case. (herein petitioners), who won by only 145 and 44 votes,
respectively,
Section 6 of Article XIX of the PALEA Constitution
provides:chanrobles.com.ph : virtual law library It is the contention of the protestants that a great number of
PALEA members were deprived of their right to vote because it
"Sec. 6. In cases where a situation arises, whereby the losing had been the tradition since 1969 to hold election in Cebu and
candidate does not concede to the result of the election, he may, if Mactan for two days; and that the holding of elections for only one
he so desires, submit in writing, his protest to the Commission on day was done without notice to all PALEA members in said station.
On the other hand, it is the contention of the petitioners that the
change was agreed upon by all the candidates concerned in a
conference held at SMCD Office, Nichols Field, on February 20,
1982. On said controversy, while public respondent found for the
protestants, the Solicitor General is for the petitioners. Be that as it
may, it is a fact that the PALEA COMELEC issued on February 15,
1984 a bulletin announcing that the elections in that area would be
only on February 20, 1984. Hence, it cannot be said that the voters
therein were not duly notified. In addition to this, worth mentioning
is the comment of the Solicitor General, which
reads:jgc:chanrobles.com.ph
". . . Besides, we do not see how these 103 members could have
failed to know about the one-day election. It was held within the
office premises, and, surely, they must have been told of such fact
by the other members who voted in the election. It would appear
that these 193 members simply did not bother to vote for one
reason or another. And we do not see the necessity of holding a
two-day election in said areas with only 500 members, and hold a
one-day election in Metro Manila area which has about 4,000
members. That it is the tradition to hold a two-day election in said
areas is not a valid argument. Tradition can always be overturned,
as what happened in the instant case."cralaw virtua1aw library
The holding of the May 4, 1984 special election, when its legality is
still pending determination by the Med-Arbiter, therefore, further
shows the partiality of the respondent PALEA COMELEC
members.
SO ORDERED.
This judgment was however overturned by the Officer-in-Charge of xxx xxx xxx
Labor Relations, on appeal seasonably taken. The OIC's decision,
dated October 10, 1986 nullified the general elections in the The submission of the respondents that they
provinces and Metro Manila on the ground of (1) lack of notice to did not receive a copy of the injunctive order is
the candidates and voters, (2) failure to disseminate the election completely rebuffed by the records. It appears
ground rules to all parties concerned, and (3) disregard of the that the same was received and signed by a
temporary restraining order of the Med-Arbiter. The decision certain Cenidoza for respondent Manolito
stressed the following points: 1 Paran at 4:30 P.M. of July 23, 1986 and by
respondent Benedicto Rodriguez himself, also
The undue haste with which the questioned on July 23, 1986 at 4:30 P.M. In the case of
general elections were held raises doubts as to Manolitao Paran, the restraining order in
its validity. In its desire to conduct the elections question was served at his office/postal
as scheduled, the respondents unwittingly address at Rm. 310 Regina Bldg., Escolta,
disregarded mandatory procedural Manila.
requirements. The respondents' pretensions
that the appellants were duly furnished with the It is this decision of the BLR Officer-in-Charge which is the subject
ground rules/guidelines of the general of the certiorari actions filed in this Court by Benedicto Rodriguez,
elections and that the same were properly the chairman of the Union COMELEC, and docketed as G.R. Nos.
disseminated to the qualified voters of the 76579-82. He claims the decision was rendered with grave abuse
union are not supported by the records. of discretion considering that (a) the Med-Arbiter had found no
fraud or irregularity in the elections; (b) the election was
xxx xxx xxx participated in by more than 73% of the entire union membership;
and (e) the petition for nullity was not supported by 30% of the
Moreover, the Union's Comelec did not follow general membership.
the schedule of election outlined in the
guidelines. Specifically, the guidelines fixed the G.R. No. 80504: Controversy Respecting Labor-Union Dues
elections in Visayas-Mindanao on July 14, 16
and 18, 1986, in Northern Luzon, on July 16, The terms of office of the old officers (Manolito Paran, et al.) ended
17, 18 and 21, 1986 and in Southern Luzon on in August, 1986. However, the new set of officers (headed by the
July 16, 17 and 18, 1986 (records, pp. 67-70). same Manolito Paran) apparently could not assume office under a
Surprisingly, however, the Union's Comelec new term because of the proceedings assailing the validity of the
conducted the elections in Northern and elections pending before the Bureau of Labor Relations. What
Southern Luzon on July 21, and 22, 1986 and happened was that the old officers continued to exercise the
in Visayas Mindanao on July 25, 1986 without functions of their respective offices under the leadership of
proper notice to the appellants. Manolito Paran.
Accordingly, the unwarranted failure of the On January 17, 1987, the Legislative Council of the union passed
Union's Comelec to duly furnish the appellants a resolution which generated another controversy. That resolution
the guidelines and properly disseminate the increased the amount of the union dues from P21.00 to P50.00 a
same to the voters, and the holding of the month. It was then presented to the general membership for
elections not in accordance with the schedule ratification at a referendum called for the purpose. Rey Sumangil
set by the guidelines and ill open defiance of and his followers objected to the holding of the referendum. When
the July 23, 1986 Restraining Order, their objection went unheeded, they and their supporters, all
precipitated an uncalled for confusion among together numbering 829 or so, boycotted the referendum and
the appellants' supporters andunduly formally reiterated their protest against it. Subsequently the union
prevented them from adopting the appropriate officers announced that the referendum has resulted in a
electoral safeguards to protect their interests. ratification of the increased union dues.
Under the circumstances, this Office is
constrained to invalidate the general elections
On March 1, 1987 Manolito Paran requested the PLDT to deduct
held on July 21, 22 and 25, 1986 and declare
the union dues at the new, increased rates, from the salaries of all
the results thereof null and void.
union members and dispense with their individual written
authorizations therefor. PLDT acceded to the request and effected
Furthermore, only 6,903 out of the 9,426 the check-off of the increased dues for the payroll period from
qualified voters trooped to the polls during the March 1 to March 15, 1987.
July 21, 22 and 25, 1986 general elections.
Considering the closeness of the result of the
BLR Case No. NCR-OD-M- 7-3-206-87
Once again Rey Sumangil and his followers hide themselves off to inter-union and intra-union conflicts, and all
the Bureau of Labor Relations. They filed a petition on March 26, disputes, grievances or problems arising from
1987 challenging the resolution for the increase in union dues, or affecting labor management
docketed as BLR Case No. NCR-OD-M-73-206-87. They relations ...
contended that since the terms of the members of the Legislative
Council who approved the resolution had already expired in As regards Article 242 of the Labor Code, relied upon by the Med-
August, 1986, and their reelection had been nullified by the Arbiter, the Director expressed the view that the 30% support
Bureau, they had no authority to act as members of the council; therein provided is not mandatory, and is not a condition precedent
consequently, it could not be said that the resolution for the to the valid presentation of a grievance before the Bureau of Labor
increase of union dues had been approved by 2/3 vote of the Relations. The Director ruled, finally, that Sumangil and the other
Council members, as provided by the union constitution and by union members had a valid grievance calling for redress, since the
laws; hence, the resolution was void. They further contended that record disclosed no compliance with the requirement that the
there had been no valid ratification of the resolution because the resolution for the increase of union dues be passed by at least 2/3
plebiscite had been "rigged," vote of the members of the Legislative Council and be ratified by a
majority of the entire membership at a plebiscite.
Once again Rey Sumangil and his group were unsuccessful in
proceedings at the level of the Med-Arbiter. The latter denied their But not long afterwards, the Director reversed herself.
petition on the ground of lack of support of at least 30% of all The Manggagawa sa Komunikasyon sa Pilipinas (MKP) —with
members of the union, citing Article 242 of the Labor Code which which Paran's Union, the FTWU, is affiliated, — intervened in the
reads as follows: case and moved for reconsideration of her decision. By resolution
dated October 1, 1987, the Director set aside her decision of July
Art. 242. — Rights and conditions of 1, 1987 and entered a new one dismissing the petition of Sumangil
membership in a labor organization. — ... Any and company, in effect affirming the Med-Arbiter's order. The
violation of the above rights and conditions of Director opined that the intervenor (MKP) was correct in its
membership shall be a ground for cancellation contention that there was no 30%-membership support for the
of union registration and expulsion of officer petition, since only 829 members had signed their support therefor,
from office, whichever is appropriate. At least as correctly found by the Med-Arbiter, and because of this, the
thirty percent (30%) of all the members of a BLR never acquired jurisdiction over the case. According to her: 2
union or any member or members specially
concerned may report such violation to the The rationale for such requirement is not
Bureau. The Bureau shall have the power to difficult to discern. It is to make certain that
hear and decide any reported violation to mete there is a primafacie case against prospective
the appropriate penalty. respondents whether it be the union or its
officers and thus forestall nuisance or
Again Sumangil and his group went up on appeal to the Director of harassment petitions/complaints. The
Labor Relations, before whom they raised the issue of whether or requirement was intended to shield the union
not the petition in fact had the support of at least 30% of the from destabilization and paralyzation coming
members, and said 30%-support was indeed a condition sine qua from adventurous and ambitious members or
non for acquisition by the Med-Arbiters (in the Labor Relations non-members engaged in union politics under
Division in a Regional Office of the MOLE) of jurisdiction over the the guise of working for the union welfare.
case. Again Sumangil and his followers were successful in their
appeal. ... As found out by the Med-Arbiter in the Office
of origin all signatures except that of 829 were
On July 1, 1987 the Director of Labor Relations rendered a obtained without the knowledge of the
decision reversing that of the Med-Arbiter. The Director ordered signatories. At this point we cannot permit 829
the cessation of the collection of the twenty-nine peso increase members to "rock the boat." so to speak, of a
and the return of the amounts already collected. In the first place, union which has at present ten thousand four
according to her, the petition was supported by 6,022 signatures, a hundred and thirteen (10,413) passengers.
number comprising more than 30% of the total membership of the
union (10,413). In the second place, the Director ruled, even In an effort to set aside this reversing resolution of the Labor
assuming the contrary, the lack of 30%-support will not preclude Relations Director, Rey Sumangil and his group have come to this
the BLR from taking cognizance of the petition where there is a Court via the instant special civil action of certiorari. In their petition
clear violation of the rights and conditions of union membership they insist that the support of 30% of the union membership is not
because Article 226 of the Labor Code, expressly confers on it the a jurisdictional requirement for the ventilation of their grievance
authority to act on all intra-union and inter-union conflicts and before the BLR-1 and assuming the contrary, they have proven
grievances affecting labor and management relations, at the that 3,501 workers had in fact joined in the petition, constituting
instance of either or both parties. The provision cited reads as 33% of the total membership. They also emphasize the validity of
follows: their grievance, drawing attention to the absence of the requisite
2/3 vote essential for validity of any resolution increasing the rates
Art. 226. — Bureau of Labor Relations. — The of union dues, and the doubtful result of the referendum at which
Bureau of Labor Relations and the Labor the resolution had allegedly been ratified.
Relations division in the Regional Offices of the
Department of Labor shall have original and Three issues are thus presented to the Court in these cases. The
exclusive authority to act, at their own initiative first involves the validity of the 1986 general elections for union
or upon request of either or both parties, on all officers; the second, whether or not 30%-membership support is
indispensable for acquisition of jurisdiction by the Bureau of Labor is the fact that the provision expressly declares that the report may
Relations of a complaint for alleged violation of rights and be made, alternatively by "any member or members specially
conditions of union members; and third, the validity of the increase concerned." And further confirmation that the assent of 30% of the
in union dues. union members is not a factor in the acquisition of jurisdiction by
the Bureau of Labor Relations is furnished by Article 226 of the
The General Elections of 1986 same Labor Code, which grants original and exclusive jurisdiction
to the Bureau, and the Labor Relations Division in the Regional
Offices of the Department of Labor, over "all inter-union and intra-
A review of the record fails to disclose any grave abuse of
union conflicts, and all disputes, grievances or problems arising
discretion tainting the adjudgment of respondent Director of Labor
from or affecting labor management relations," making no
Relations that the general elections for union officers held in 1986
reference whatsoever to any such 30 % support requirement.
were attended by grave irregularities, rendering the elections
Indeed, the officials mentioned are given the power to act "on all
invalid. That finding must thus be sustained.
inter-union and intra-union conflicts (1) "upon request of either or
both parties" as well as (2) "at their own initiative." There can thus
The dates for provincial elections were set for July 14 to 18, 1986. be no question about the capacity of Rey Sumangil and his group
But they were in fact held on July 21 to 22, 1986, without prior of more than eight hundred, to report and seek redress in an intra-
notice to all voting members, and without ground rules duly union conflict involving a matter they are specially concerned, i.e.,
prescribed therefor. The elections in Metro Manila were conducted the rates of union dues being imposed on them.
under no better circumstances. It was held on July 25, 1986 in
disregard and in defiance of the temporary restraining order
These considerations apply equally well to controversies over
properly issued by the Med-Arbiter on July 23, 1986, notice of
elections. In the cases at bar, the petition to nullify the 1986 union
which restraining order had been regularly served on the same
elections could not be deemed defective because it did not have
date, as the proofs adequately show, on both the Union, President,
the assent of 30% of the union membership. The petition clearly
Manolito Paran, and the Chairman of the Union COMELEC,
involved an intra-union conflict — one directly affecting the right of
Benedicto Rodriguez. Moreover, as in the case of the provincial
suffrage of more than 800 union members and the integrity of the
elections, there were no ground rules or guidelines set for the
union elections — over which, as the law explicitly provides,
Metro Manila elections. Undue haste, lack of adequate safeguards
jurisdiction could be assumed by the Labor Relations Director or
to ensure integrity of the voting, and absence of notice of the dates
the Med-Arbiters "at their own initiative" or "upon request of either
of balloting, thus attended the elections in the provinces and in
or both parties."
Metro Manila. They cannot but render the proceedings void.
DE LEON, JR., J.: In view of the adverse Order dated November 5, 1991 dismissing
the SECOND case, petitioner appealed[16] to the public respondent
Before us is a petition for certiorari seeking to annul the twin DOLE. Public respondent Laguesma, issued the assailed
Orders dated December 29, 1992[2] and January 25, 1993[3] of Order[17] dated December 29, 1992, holding that petitioner‘s failure
public respondent Bienvenido E. Laguesma, acting then as to show in his complaint that the administrative remedies provided
Undersecretary, now the secretary, of the Department of Labor for in the constitution and by-laws of both unions, have been
and Employment (DOLE), in his affirmance of the dismissal[4] by exhausted or such remedies are not available, was fatal to
the Med-Arbiter of the complaint for unauthorized and illegal petitioner‘s cause.[18] Resultantly, he affirmed[19] the dismissal of
disbursement of union funds filed by petitioner Jesus B. Diamonon the complaint.
against private respondent Atty. Zoilo V. de la Cruz and Sofia P.
Mana-ay. Petitioner sought[20] reconsideration of the Order dated December
29, 1992. However, public respondent in his Order[21] dated
The facts of the case are the following: January 25, 1993 denied petitioner‘s motion for reconsideration.
Petitioner served as the National Executive Vice President of the Hence, this petition.
National Congress of Unions in the Sugar Industry of the
Philippines (NACUSIP) and Vice President for Luzon of the Petitioner anchors his petition on two (2) grounds, to wit: Scjj
Philippine Agricultural, Commercial and Industrial Workers Union
(PACIWU). Misoedp "I
In a letter dated March 23, 1991, petitioner learned[5] of his removal PUBLIC RESPONDENT HONORABLE
from the positions he held in both unions in a resolution approved BIENVENIDO V. LAGUESMA HAS ACTED
during a meeting[6] of the National Executive Boards of both WITH GRAVE ABUSE OF DISCRETION
unions.[7] AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT DISMISS [sic] THE
On April 22, 1991, petitioner sought[8] reconsideration of the APPEAL INTERPOSED FROM THE ORDER
resolution on his removal. At the same time, he initiated a OF THE MED ARBITER MENESIS [sic] T.
complaint[9] (hereafter referred to as FIRST) before the DOLE CRUZ, AND WHEN IT DENIED THE MOTION
against the National President of NACUSIP and PACIWU, private FOR RECONSIDERATION ON FLIMSY
respondent Atty. Zoilo V. de la Cruz, Jr., and the members of the GROUNDS.
National Executive Boards of NACUSIP and PACIWU questioning
the validity of his removal from the positions he held in the two II.
unions.
THE CASE OF THE PETITIONER IS QUITE
While the FIRST case was pending with the Med-Arbiter, petitioner MERITORIOUS AND TO DISREGARD THE
filed on May 16, 1991 a second complaint[10] (hereafter referred to aSAME WOULD [sic] TANTAMOUNT TO
as SECOND) against private respondent Atty. Zoilo V. de la Cruz, WILLFULLY [sic] CLOSING OUR EYES TO
Jr., and the National Treasurer of NACUSIP and PACIWU, Sofia P. AVOID SEEING AND REALIZING THE
Mana-ay. He accused them of three (3) offenses, namely: (a) NAKED TRUTH."[22]
wanton violation of the Constitution and By-Laws of both
organizations, NACUSIP and PACIWU; (b) unauthorized and
Petitioner emphatically stresses that the only issue on appeal
illegal disbursement of union funds of both organizations; (c) and
before the DOLE was petitioner‘s alleged lack of personality to file
abuse of authority as national officers of both the complaint. When public respondent "switched" the ground for
organizations. Edpmis
dismissal of the complaint from "lack of personality of the
[petitioner] to file the complaint" to "non-exhaustion of
On August 2, 1991, an Order[11] was issued in the FIRST case administrative remedies," he staunchly claims that the latter
declaring that petitioner‘s removal from the positions he held is null committed grave abuse of discretion amounting to lack or excess
and void. Private respondents appealed[12] this decision to the of jurisdiction.[23] For, in doing so, the challenged orders "went
public respondent DOLE. outside the issues and purported to adjudicate something upon
which the parties were not heard."[24]
The petition lacks merit. Sjcj judicial bodies. Thus, a party with an administrative remedy must
not merely initiate the prescribed administrative procedure to
Generally, an appellate court may only pass upon errors obtain relief, but also pursue it to its appropriate conclusion before
assigned.[25] However, this rule is not without exceptions.[26] In the seeking judicial intervention.[31]This rule clearly applies to the
following instances,[27] the Supreme Court ruled that an appellate instant case. The underlying principle of the rule on exhaustion of
court is accorded a broad discretionary power to waive the lack of administrative remedies rests on the presumption that when the
assignment of errors and consider errors not assigned: administrative body, or grievance machinery, as in this case, is
afforded a chance to pass upon the matter, it will decide the same
correctly.[32] Petitioner‘s premature invocation of public
(a) Grounds not assigned as errors but
respondent‘s intervention is fatal to his cause of action. [33]Jlexj
affecting the jurisdiction of the court over the
subject matter;
Evidently, when petitioner brought before the DOLE his complaint
charging private respondents with unauthorized and illegal
(b) Matters not assigned as errors on appeal
disbursement of union funds, he overlooked or deliberately ignored
but are evidently plain or clerical errors within
the fact that the same is clearly dismissible for non-exhaustion of
contemplation of law;
administrative remedies. Thus, public respondent Bienvenido E.
Laguesma, in dismissing petitioner‘s complaint, committed no
(c) Matters not assigned as errors on appeal grave abuse of discretion.
but consideration of which is necessary in
arriving at a just decision and complete
WHEREFORE, the petition is hereby DISMISSED, and the twin
resolution of the case or to serve the interests
Orders dated December 29, 1992 and January 25, 1993 by public
of a justice or to avoid dispensing piecemeal
respondent Bienvenido E. Laguesma affirming dismissal of the
justice;
complaint dated May 15, 1991 filed by petitioner against private
respondents are AFFIRMED. No costs.
(d) Matters not specifically assigned as errors
on appeal but raised in the trial court and are
SO ORDERED.
matters of record having some bearing on the
issue submitted which the parties failed to
raise or which the lower court Bellosillo, (Chairman), Mendoza, and Buena, JJ., concur. Lexjuris
ignored; Supreme
Quisumbing, J., no part, close relation to the party.
(e) Matters not assigned as errors on appeal
but closely related to an error assigned;
In the instant case, not only did petitioner fail to comply with
Section 2, Rule VIII, Book V of the Implementing Rules and
Regulations of the Labor Code as amended[28] but also the record
reveals that neither did he exhaust the remedies[29] set forth by the
Constitution and by-laws of both unions. In the National
Convention of PACIWU and NACUSIP held on August 10 and 11,
1991, respectively, nothing was heard of petitioner‘s complaint
against private respondents on the latter‘s alleged unauthorized
and illegal disbursement of union funds. In fact, what the National
Convention resolved was to approve and adopt the resolution of
the National Executive Board removing petitioner from the
positions he held.[30] His failure to seek recourse before the
National convention on his complaint against private respondents
taints his action with prematurity. Court
Appeal, by certiorari to review a decision and a resolution en From April 25 to May 6, 1958, the parties negotiated on the labor
banc of the Court of Industrial Relations dated August 17, 1965 demands but with no satisfactory result due to a stalemate on the
and October 20, 1965, respectively, in Case 1698-ULP. matter of salary increases. On May 13, 1958 the Unions
demanded from the Companies final counter-proposals on their
The Insular Life Assurance Co., Ltd., Employees Association- economic demands, particularly on salary increases. Instead of
NATU, FGU Insurance Group Workers & Employees Association- giving counter-proposals, the Companies on May 15, 1958
NATU, and Insular Life Building Employees Association-NATU presented facts and figures and requested the Unions to submit a
(hereinafter referred to as the Unions), while still members of the workable formula which would justify their own proposals, taking
Federation of Free Workers (FFW), entered into separate into account the financial position of the former. Forthwith the
collective bargaining agreements with the Insular Life Assurance Unions voted to declare a strike in protest against what they
Co., Ltd. and the FGU Insurance Group (hereinafter referred to as considered the Companies' unfair labor practices.
the Companies).
Meanwhile, eighty-seven (87) unionists were reclassified as
Two of the lawyers of the Unions then were Felipe Enaje and supervisors without increase in salary nor in responsibility while
Ramon Garcia; the latter was formerly the secretary-treasurer of negotiations were going on in the Department of Labor after the
the FFW and acting president of the Insular Life/FGU unions and notice to strike was served on the Companies. These employees
the Insular Life Building Employees Association. Garcia, as such resigned from the Unions.
acting president, in a circular issued in his name and signed by
him, tried to dissuade the members of the Unions from disaffiliating On May 20, 1958 the Unions went on strike and picketed the
with the FFW and joining the National Association of Trade Unions offices of the Insular Life Building at Plaza Moraga.
(NATU), to no avail.
On May 21, 1958 the Companies through their acting manager and
Enaje and Garcia soon left the FFW and secured employment with president, the respondent Jose M. Olbes (hereinafter referred to as
the Anti-Dummy Board of the Department of Justice. Thereafter, the respondent Olbes), sent to each of the strikers a letter (exhibit
the Companies hired Garcia in the latter part of 1956 as assistant A) quoted verbatim as follows:
corporate secretary and legal assistant in their Legal Department,
and he was soon receiving P900 a month, or P600 more than he We recognize it is your privilege both to strike
was receiving from the FFW. Enaje was hired on or about and to conduct picketing.
February 19, 1957 as personnel manager of the Companies, and
was likewise made chairman of the negotiating panel for the However, if any of you would like to come back
Companies in the collective bargaining with the Unions. to work voluntarily, you may:
In a letter dated September 16, 1957, the Unions jointly submitted 1. Advise the nearest police officer or security
proposals to the Companies for a modified renewal of their guard of your intention to do so.
respective collective bargaining contracts which were then due to
expire on September 30, 1957. The parties mutually agreed and to
2. Take your meals within the office.
make whatever benefits could be agreed upon retroactively
effective October 1, 1957.
3. Make a choice whether to go home at the
end of the day or to sleep nights at the office
Thereafter, in the months of September and October 1957
where comfortable cots have been prepared.
negotiations were conducted on the Union's proposals, but these
were snagged by a deadlock on the issue of union shop, as a
result of which the Unions filed on January 27, 1958 a notice of 4. Enjoy free coffee and occasional movies.
strike for "deadlock on collective bargaining." Several conciliation
5. Be paid overtime for work performed in have not yet reported, we may be forced to
excess of eight hours. obtain your replacement.
6. Be sure arrangements will be made for your Before, the decisions was yours to make.
families.
So it is now.
The decision to make is yours — whether you
still believe in the motives of the strike or in the Incidentally, all of the more than 120 criminal charges filed against
fairness of the Management. the members of the Unions, except three (3), were dismissed by
the fiscal's office and by the courts. These three cases involved
The Unions, however, continued on strike, with the exception of a "slight physical injuries" against one striker and "light coercion"
few unionists who were convinced to desist by the aforesaid letter against two others.
of May 21, 1958.
At any rate, because of the issuance of the writ of preliminary
From the date the strike was called on May 21, 1958, until it was injunction against them as well as the ultimatum of the Companies
called off on May 31, 1958, some management men tried to break giving them until June 2, 1958 to return to their jobs or else be
thru the Unions' picket lines. Thus, on May 21, 1958 Garcia, replaced, the striking employees decided to call off their strike and
assistant corporate secretary, and Vicente Abella, chief of the to report back to work on June 2, 1958.
personnel records section, respectively of the Companies, tried to
penetrate the picket lines in front of the Insular Life Building. However, before readmitting the strikers, the Companies required
Garcia, upon approaching the picket line, tossed aside the placard them not only to secure clearances from the City Fiscal's Office of
of a picketer, one Paulino Bugay; a fight ensued between them, in Manila but also to be screened by a management committee
which both suffered injuries. The Companies organized three bus- among the members of which were Enage and Garcia. The
loads of employees, including a photographer, who with the said screening committee initially rejected 83 strikers with pending
respondent Olbes, succeeded in penetrating the picket lines in criminal charges. However, all non-strikers with pending criminal
front of the Insular Life Building, thus causing injuries to the charges which arose from the breakthrough incident were
picketers and also to the strike-breakers due to the resistance readmitted immediately by the Companies without being required
offered by some picketers. to secure clearances from the fiscal's office. Subsequently, when
practically all the strikers had secured clearances from the fiscal's
Alleging that some non-strikers were injured and with the use of office, the Companies readmitted only some but adamantly refused
photographs as evidence, the Companies then filed criminal readmission to 34 officials and members of the Unions who were
charges against the strikers with the City Fiscal's Office of Manila. most active in the strike, on the ground that they committed "acts
During the pendency of the said cases in the fiscal's office, the inimical to the interest of the respondents," without however stating
Companies likewise filed a petition for injunction with damages the specific acts allegedly committed. Among those who were
with the Court of First Instance of Manila which, on the basis of the refused readmission are Emiliano Tabasondra, vice president of
pendency of the various criminal cases against striking members the Insular Life Building Employees' Association-NATU; Florencio
of the Unions, issued on May 31, 1958 an order restraining the Ibarra, president of the FGU Insurance Group Workers &
strikers, until further orders of the said court, from stopping, Employees Association-NATU; and Isagani Du Timbol, acting
impeding, obstructing, etc. the free and peaceful use of the president of the Insular Life Assurance Co., Ltd. Employees
Companies' gates, entrance and driveway and the free movement Association-NATU. Some 24 of the above number were ultimately
of persons and vehicles to and from, out and in, of the Companies' notified months later that they were being dismissed retroactively
building. as of June 2, 1958 and given separation pay checks computed
under Rep. Act 1787, while others (ten in number) up to now have
On the same date, the Companies, again through the respondent not been readmitted although there have been no formal dismissal
Olbes, sent individually to the strikers a letter (exhibit B), quoted notices given to them.
hereunder in its entirety:
On July 29, 1958 the CIR prosecutor filed a complaint for unfair
The first day of the strike was last 21 May labor practice against the Companies under Republic Act 875. The
1958. complaint specifically charged the Companies with (1) interfering
with the members of the Unions in the exercise of their right to
concerted action, by sending out individual letters to them urging
Our position remains unchanged and the strike
them to abandon their strike and return to work, with a promise of
has made us even more convinced of our
comfortable cots, free coffee and movies, and paid overtime, and,
decision.
subsequently, by warning them that if they did not return to work
on or before June 2, 1958, they might be replaced; and (2)
We do not know how long you intend to stay discriminating against the members of the Unions as regards
out, but we cannot hold your positions open for readmission to work after the strike on the basis of their union
long. We have continued to operate and will membership and degree of participation in the strike.
continue to do so with or without you.
On August 4, 1958 the Companies filed their answer denying all
If you are still interested in continuing in the the material allegations of the complaint, stating special defenses
employ of the Group Companies, and if there therein, and asking for the dismissal of the complaint.
are no criminal charges pending against you,
we are giving you until 2 June 1958 to report
After trial on the merits, the Court of Industrial Relations, through
for work at the home office. If by this date you
Presiding Judge Arsenio Martinez, rendered on August 17, 1965 a
decision dismissing the Unions' complaint for lack of merit. On Indeed, some such similar actions are illegal as constituting
August 31, 1965 the Unions seasonably filed their motion for unwarranted acts of interference. Thus, the act of a company
reconsideration of the said decision, and their supporting president in writing letters to the strikers, urging their return to work
memorandum on September 10, 1965. This was denied by the on terms inconsistent with their union membership, was adjudged
Court of Industrial Relations en banc in a resolution promulgated as constituting interference with the exercise of his employees'
on October 20, 1965. right to collective bargaining (Lighter Publishing, CCA 7th, 133 F2d
621). It is likewise an act of interference for the employer to send a
Hence, this petition for review, the Unions contending that the letter to all employees notifying them to return to work at a time
lower court erred: specified therein, otherwise new employees would be engaged to
perform their jobs. Individual solicitation of the employees or
visiting their homes, with the employer or his representative urging
1. In not finding the Companies guilty of unfair
the employees to cease union activity or cease striking, constitutes
labor practice in sending out individually to the
unfair labor practice. All the above-detailed activities are unfair
strikers the letters marked Exhibits A and B;
labor practices because they tend to undermine the concerted
activity of the employees, an activity to which they are entitled free
2. In not finding the Companies guilty of unfair from the employer's molestation.1
labor practice for discriminating against the
striking members of the Unions in the matter of
Moreover, since exhibit A is a letter containing promises of benefits
readmission of employees after the strike;
to the employees in order to entice them to return to work, it is not
protected by the free speech provisions of the Constitution (NLRB
3. In not finding the Companies guilty of unfair v. Clearfield Cheese Co., Inc., 213 F2d 70). The same is true with
labor practice for dismissing officials and exhibit B since it contained threats to obtain replacements for the
members of the Unions without giving them the striking employees in the event they did not report for work on
benefit of investigation and the opportunity to June 2, 1958. The free speech protection under the Constitution is
present their side in regard to activities inapplicable where the expression of opinion by the employer or
undertaken by them in the legitimate exercise his agent contains a promise of benefit, or threats, or reprisal (31
of their right to strike; and Am. Jur. 544; NLRB vs. Clearfield Cheese Co., Inc., 213 F2d 70;
NLRB vs. Goigy Co., 211 F2d 533, 35 ALR 2d 422).
4. In not ordering the reinstatement of officials
and members of the Unions, with full back Indeed, when the respondents offered reinstatement and
wages, from June 2, 1958 to the date of their attempted to "bribe" the strikers with "comfortable cots," "free
actual reinstatement to their usual coffee and occasional movies," "overtime" pay for "work performed
employment. in excess of eight hours," and "arrangements" for their families, so
they would abandon the strike and return to work, they were guilty
I. The respondents contend that the sending of the letters, exhibits of strike-breaking and/or union-busting and, consequently, of unfair
A and B, constituted a legitimate exercise of their freedom of labor practice. It is equivalent to an attempt to break a strike for an
speech. We do not agree. The said letters were directed to the employer to offer reinstatement to striking employees individually,
striking employees individually — by registered special delivery when they are represented by a union, since the employees thus
mail at that — without being coursed through the Unions which offered reinstatement are unable to determine what the
were representing the employees in the collective bargaining. consequences of returning to work would be.
The act of an employer in notifying absent Likewise violative of the right to organize, form and join labor
employees individually during a strike following organizations are the following acts: the offer of a Christmas bonus
unproductive efforts at collective bargaining to all "loyal" employees of a company shortly after the making of a
that the plant would be operated the next day request by the union to bargain; wage increases given for the
and that their jobs were open for them should purpose of mollifying employees after the employer has refused to
they want to come in has been held to be an bargain with the union, or for the purpose of inducing striking
unfair labor practice, as an active interference employees to return to work; the employer's promises of benefits in
with the right of collective bargaining through return for the strikers' abandonment of their strike in support of
dealing with the employees individually instead their union; and the employer's statement, made about 6 weeks
of through their collective bargaining after the strike started, to a group of strikers in a restaurant to the
representatives. (31 Am. Jur. 563, citing NLRB effect that if the strikers returned to work, they would receive new
v. Montgomery Ward & Co. [CA 9th] 133 F2d benefits in the form of hospitalization, accident insurance, profit-
676, 146 ALR 1045) sharing, and a new building to work in.2
Indeed, it is an unfair labor practice for an employer operating Citing paragraph 5 of the complaint filed by the acting prosecutor
under a collective bargaining agreement to negotiate or to attempt of the lower court which states that "the officers and members of
to negotiate with his employees individually in connection with the complainant unions decided to call off the strike and return to
changes in the agreement. And the basis of the prohibition work on June 2, 1958 by reason of the injunction issued by the
regarding individual bargaining with the strikers is that although the Manila Court of First Instance," the respondents contend that this
union is on strike, the employer is still under obligation to bargain was the main cause why the strikers returned to work and not the
with the union as the employees' bargaining representative (Melo letters, exhibits A and B. This assertion is without merit. The
Photo Supply Corporation vs. National Labor Relations Board, 321 circumstance that the strikers later decided to return to work
U.S. 332). ostensibly on account of the injunctive writ issued by the Court of
First Instance of Manila cannot alter the intrinsic quality of the
letters, which were calculated, or which tended, to interfere with
the employees' right to engage in lawful concerted activity in the special privileges. Two days later, the respondents, thru their
form of a strike. Interference constituting unfair labor practice will president and manager, respondent Jose M. Olbes, brought three
not cease to be such simply because it was susceptible of being truckloads of non-strikers and others, escorted by armed men,
thwarted or resisted, or that it did not proximately cause the result who, despite the presence of eight entrances to the three buildings
intended. For success of purpose is not, and should not, be the occupied by the Companies, entered thru only one gate less than
criterion in determining whether or not a prohibited act constitutes two meters wide and in the process, crashed thru the picket line
unfair labor practice. posted in front of the premises of the Insular Life Building. This
resulted in injuries on the part of the picketers and the strike-
The test of whether an employer has interfered breakers.lâwphî1.ñèt Then the respondents brought against the
with and coerced employees within the picketers criminal charges, only three of which were not dismissed,
meaning of subsection (a) (1) is whether the and these three only for slight misdemeanors. As a result of these
employer has engaged in conduct which it may criminal actions, the respondents were able to obtain an injunction
reasonably be said tends to interfere with the from the court of first instance restraining the strikers from
free exercise of employees' rights under stopping, impeding, obstructing, etc. the free and peaceful use of
section 3 of the Act, and it is not necessary the Companies' gates, entrance and driveway and the free
that there be direct evidence that any movement of persons and vehicles to and from, out and in, of the
employee was in fact intimidated or coerced by Companies' buildings. On the same day that the injunction was
statements of threats of the employer if there is issued, the letter, Exhibit B, was sent — again individually and by
a reasonable inference that anti-union conduct registered special delivery mail — to the strikers, threatening them
of the employer does have an adverse effect with dismissal if they did not report for work on or before June 2,
on self-organization and collective bargaining. 1958. But when most of the petitioners reported for work, the
(Francisco, Labor Laws 1956, Vol. II, p. respondents thru a screening committee — of which Ramon
323, citing NLRB v. Ford, C.A., 1948, 170 F2d Garcia was a member — refused to admit 63 members of the
735). Unions on the ground of "pending criminal charges." However,
when almost all were cleared of criminal charges by the fiscal's
office, the respondents adamantly refused admission to 34 officials
Besides, the letters, exhibits A and B, should not be considered by
and union members. It is not, however, disputed that all-non-
themselves alone but should be read in the light of the preceding
strikers with pending criminal charges which arose from the
and subsequent circumstances surrounding them. The letters
breakthrough incident of May 23, 1958 were readmitted
should be interpreted according to the "totality of conduct doctrine,"
immediately by the respondents. Among the non-strikers with
pending criminal charges who were readmitted were Generoso
... whereby the culpability of an employer's Abella, Enrique Guidote, Emilio Carreon, Antonio Castillo, Federico
remarks were to be evaluated not only on the Barretto, Manuel Chuidian and Nestor Cipriano. And despite the
basis of their implicit implications, but were to fact that the fiscal's office found no probable cause against the
be appraised against the background of and in petitioning strikers, the Companies adamantly refused admission
conjunction with collateral circumstances. to them on the pretext that they committed "acts inimical to the
Under this "doctrine" expressions of opinion by interest of the respondents," without stating specifically the inimical
an employer which, though innocent in acts allegedly committed. They were soon to admit, however, that
themselves, frequently were held to be these alleged inimical acts were the same criminal charges which
culpable because of the circumstances under were dismissed by the fiscal and by the courts..
which they were uttered, the history of the
particular employer's labor relations or anti-
Verily, the above actuations of the respondents before and after
union bias or because of their connection with
the issuance of the letters, exhibit A and B, yield the clear
an established collateral plan of coercion or
inference that the said letters formed of the respondents scheme to
interference. (Rothenberg on Relations, p. 374,
preclude if not destroy unionism within them.
and cases cited therein.)
II. Exhibit H imposed three conditions for readmission of the Delayed reinstatement is a form of
strikers, namely: (1) the employee must be interested in continuing discrimination in rehiring, as is having the
his work with the group companies; (2) there must be no criminal machinery of reinstatement in the hands of
charges against him; and (3) he must report for work on June 2, employees hostile to the strikers, and
1958, otherwise he would be replaced. Since the evidence shows reinstating a union official who formerly worked
that all the employees reported back to work at the respondents' in a unionized plant, to a job in another mill,
head office on June 2, 1953, they must be considered as having which was imperfectly organized. (Morabe,
complied with the first and third conditions. The Law on Strikes, p. 473, citing Sunshine
Mining Co., 7 NLRB 1252; Cleveland Worsted
Our point of inquiry should therefore be directed at whether they Mills, 43 NLRB 545; emphasis supplied.)
also complied with the second condition. It is not denied that when
Equally significant is the fact that while the management and the The respondents, however, admitted that the alleged "acts of
members of the screening committee admitted the discrimination misconduct" attributed to the dismissed strikers were the same
committed against the strikers, they tossed back and around to acts with which the said strikers were charged before the fiscal's
each other the responsibility for the discrimination. Thus, Garcia office and the courts. But all these charges except three were
admitted that in exercising for the management the authority to dropped or dismissed.
screen the returning employees, the committee admitted the non-
strikers but refused readmission to the strikers (tsn., Feb. 6, 1962, Indeed, the individual cases of dismissed officers and members of
pp. 15-19, 23-29). Vicente Abella, chairman of the management's the striking unions do not indicate sufficient basis for dismissal.
screening committee, while admitting the discrimination, placed the
blame therefor squarely on the management (tsn., Sept. 20, 1960,
Emiliano Tabasondra, vice-president of the petitioner FGU
pp. 7-8, 14-18). But the management, speaking through the
Insurance Group Workers & Employees Association-NATU, was
respondent Olbes, head of the Companies, disclaimed
refused reinstatement allegedly because he did not report for duty
responsibility for the discrimination. He testified that "The decision
on June 2, 1958 and, hence, had abandoned his office. But the
whether to accept or not an employee was left in the hands of that
overwhelming evidence adduced at the trial and which the
committee that had been empowered to look into all cases of the
respondents failed to rebut, negates the respondents' charge that
strikers." (tsn., Sept. 6, 1962, p. 19.)
he had abandoned his job. In his testimony, corroborated by many
others, Tabasondra particularly identified the management men to
Of course, the respondents — through Ramon Garcia — tried to whom he and his group presented themselves on June 2, 1958.
explain the basis for such discrimination by testifying that strikers He mentioned the respondent Olbes' secretary, De Asis, as the
whose participation in any alleged misconduct during the picketing one who received them and later directed them — when Olbes
was not serious in nature were readmissible, while those whose refused them an audience — to Felipe Enage, the Companies'
participation was serious were not. (tsn., Aug. 4, 1961, pp. 48-49, personnel manager. He likewise categorically stated that he and
56). But even this distinction between acts of slight misconduct and his group went to see Enage as directed by Olbes' secretary. If
acts of serious misconduct which the respondents contend was the Tabasondra were not telling the truth, it would have been an easy
basis for either reinstatement or discharge, is completely shattered matter for the respondents to produce De Asis and Enage — who
upon a cursory examination of the evidence on record. For with the testified anyway as witnesses for the respondents on several
exception of Pascual Esquillo whose dismissal sent to the other occasions — to rebut his testimony. The respondents did nothing
strikers cited the alleged commission by them of simple "acts of of the kind. Moreover, Tabasondra called on June 21, 1958 the
misconduct." respondents' attention to his non-admission and asked them to
inform him of the reasons therefor, but instead of doing so, the
III. Anent the third assignment of error, the record shows that not a respondents dismissed him by their letter dated July 10, 1958.
single dismissed striker was given the opportunity to defend Elementary fairness required that before being dismissed for
himself against the supposed charges against him. As earlier cause, Tabasondra be given "his day in court."
mentioned, when the striking employees reported back for work on
June 2, 1958, the respondents refused to readmit them unless they At any rate, it has been held that mere failure to report for work
first secured the necessary clearances; but when all, except three, after notice to return, does not constitute abandonment nor bar
were able to secure and subsequently present the required reinstatement. In one case, the U.S. Supreme Court held that the
clearances, the respondents still refused to take them back. taking back of six of eleven men constituted discrimination
Instead, several of them later received letters from the respondents although the five strikers who were not reinstated, all of whom
in the following stereotyped tenor: were prominent in the union and in the strike, reported for work at
various times during the next three days, but were told that there
This will confirm the termination of your were no openings. Said the Court:
employment with the Insular Life-FGU
Insurance Group as of 2 June 1958. ... The Board found, and we cannot say that its
finding is unsupported, that, in taking back six
The termination of your employment was due union men, the respondent's officials
to the fact that you committed acts of discriminated against the latter on account of
misconduct while picketing during the last their union activities and that the excuse given
strike. Because this may not constitute that they did not apply until after the quota was
sufficient cause under the law to terminate full was an afterthought and not the true
your employment without pay, we are giving reason for the discrimination against them.
you the amount of P1,930.32 corresponding to (NLRB v. Mackay Radio & Telegraph Co., 304
one-half month pay for every year of your U.S. 333, 58 Sup. Ct. 904, 82 L. Ed. 1381)
service in the Group Company. (Mathews, Labor Relations and the Law, p.
725, 728)
Kindly acknowledge receipt of the check we
are sending herewith. The respondents' allegation that Tabasondra should have returned
after being refused readmission on June 2, 1958, is not
Very truly yours, persuasive. When the employer puts off reinstatement when an
employee reports for work at the time agreed, we consider the
employee relieved from the duty of returning further.
(Sgd.) JOSE M. OLBES
President, Insurance Life
Acting President, FGU. Sixto Tongos was dismissed allegedly because he revealed that
despite the fact that the Companies spent more than P80,000 for
the vacation trips of officials, they refused to grant union demands;
hence, he betrayed his trust as an auditor of the Companies. We time and was still a "general agency" of the Companies. It is not
do not find this allegation convincing. First, this accusation was therefore amiss to conclude that they were more inclined to favor
emphatically denied by Tongos on the witness stand. Gonzales, the respondents rather than Tongos.
president of one of the respondent Companies and one of the
officials referred to, took a trip abroad in 1958. Exchange controls Pacifico Ner, Paulino Bugay, Jose Garcia, Narciso Daño, Vicente
were then in force, and an outgoing traveller on a combined Alsol and Hermenigildo Ramirez, opined the lower court, were
business and vacation trip was allowed by the Central Bank, per its constructively dismissed by non-readmission allegedly because
Circular 52 (Notification to Authorized Agent Banks) dated May 9, they not only prevented Ramon Garcia, assistant corporate
1952, an allocation of $1,000 or only P2,000, at the official rate of secretary, and Vicente Abella, chief of the personnel records
two pesos to the dollar, as pocket money; hence, this was the only section of the Companies, from entering the Companies' premises
amount that would appear on the books of the Companies. It was on May 21, 1958, but they also caused bruises and abrasions on
only on January 21, 1962, per its Circular 133 (Notification to Garcia's chest and forehead — acts considered inimical to the
Authorized Agent Banks), that the Central Bank lifted the exchange interest of the respondents. The Unions, upon the other hand,
controls. Tongos could not therefore have revealed an amount insist that there is complete lack of evidence that Ner took part in
bigger than the above sum. And his competence in figures could pushing Garcia; that it was Garcia who elbowed his way through
not be doubted considering that he had passed the board the picket lines and therefore Ner shouted "Close up," which the
examinations for certified public accountants. But picketers did; and that Garcia tossed Paulino Bugay's placard and
assuming arguendo that Tongos indeed revealed the true a fight ensued between them in which both suffered injuries. But
expenses of Gonzales' trip — which the respondents never denied despite these conflicting versions of what actually happened on
or tried to May 21, 1958, there are grounds to believe that the picketers are
disprove — his statements clearly fall within the sphere of a not responsible for what happened.lâwphî1.ñèt The picketing on
unionist's right to discuss and advertise the facts involved in a May 21, 1958, as reported in the police blotter, was peaceful (see
labor dispute, in accordance with section 9(a)(5) of Republic Act Police blotter report, exh. 3 in CA-G.R. No. 25991-R of the Court of
875 which guarantees the untramelled exercise by striking Appeals, where Ner was acquitted). Moreover, although the
employees of the right to give "publicity to the existence of, or the Companies during the strike were holding offices at the Botica Boie
fact involved in any labor dispute, whether by advertising, building at Escolta, Manila; Tuason Building at San Vicente Street,
speaking, patrolling or by any method not involving fraud or Manila; and Ayala, Inc. offices at Makati, Rizal, Garcia, the
violence." Indeed, it is not only the right, it is as well the duty, of assistant corporate secretary, and Abella, the chief of the
every unionist to advertise the facts of a dispute for the purpose of personnel records section, reported for work at the Insular Life
informing all those affected thereby. In labor disputes, the Building. There is therefore a reasonable suggestion that they
combatants are expected to expose the truth before the public to were sent to work at the latter building to create such an incident
justify their respective demands. Being a union man and one of the and have a basis for filing criminal charges against the petitioners
strikers, Tongos was expected to reveal the whole truth on whether in the fiscal's office and applying for injunction from the court of first
or not the respondent Companies were justified in refusing to instance. Besides, under the circumstances the picketers were not
accede to union demands. After all, not being one of the legally bound to yield their grounds and withdraw from the picket
supervisors, he was not a part of management. And his statement, lines. Being where the law expects them to be in the legitimate
if indeed made, is but an expression of free speech protected by exercise of their rights, they had every reason to defend
the Constitution. themselves and their rights from any assault or unlawful
transgression. Yet the police blotter, about adverted to, attests that
Free speech on both sides and for every they did not resort to violence.
faction on any side of the labor relation is to
me a constitutional and useful right. Labor is The heated altercations and occasional blows exchanged on the
free ... to turn its publicity on any labor picket line do not affect or diminish the right to strike. Persuasive
oppression, substandard wages, employer on this point is the following commentary: .
unfairness, or objectionable working
conditions. The employer, too, should be free
We think it must be conceded that some
to answer and to turn publicity on the records
disorder is unfortunately quite usual in any
of the leaders of the unions which seek the
extensive or long drawn out strike. A strike is
confidence of his men ... (Concurring opinion
essentially a battle waged with economic
of Justice Jackson in Thomas v. Collins, 323
weapons. Engaged in it are human beings
U.S. 516, 547, 65 Sup. Ct. 315, 89 L. Ed. 430.)
whose feelings are stirred to the depths. Rising
(Mathews, Labor Relations and the Law, p.
passions call forth hot words. Hot words lead
591.)
to blows on the picket line. The transformation
from economic to physical combat by those
The respondents also allege that in revealing certain confidential engaged in the contest is difficult to prevent
information, Tongos committed not only a betrayal of trust but also even when cool heads direct the fight. Violence
a violation of the moral principles and ethics of accountancy. But of this nature, however much it is to be
nowhere in the Code of Ethics for Certified Public Accountants regretted, must have been in the contemplation
under the Revised Rules and Regulations of the Board of of the Congress when it provided in Sec. 13 of
Accountancy formulated in 1954, is this stated. Moreover, the Act 29 USCA Sec. 163, that nothing therein
relationship of the Companies with Tongos was that of an should be construed so as to interfere with or
employer and not a client. And with regard to the testimonies of impede or diminish in any way the right to
Juan Raymundo and Antolin Carillo, both vice-presidents of the strike. If this were not so, the rights afforded to
Trust Insurance Agencies, Inc. about the alleged utterances made employees by the Act would indeed be illusory.
by Tongos, the lower court should not have given them much We accordingly recently held that it was not
weight. The firm of these witnesses was newly established at that intended by the Act that minor disorders of this
nature would deprive a striker of the possibility Villaruel and others (annex C, Decision, p. 27) — another matter
of reinstatement. (Republic Steel Corp. v. N. L. which emphasizes the respondents' unfair labor practice. For
R. B., 107 F2d 472, cited in Mathews, Labor under the circumstances, there is good ground to believe that
Relations and the Law, p. 378) Encarnacion was made to spy on the actvities of the union
members. This act of the respondents is considered unjustifiable
Hence the incident that occurred between Ner, et al. and Ramon interference in the union activities of the petitioners and is unfair
Garcia was but a necessary incident of the strike and should not labor practice.
be considered as a bar to reinstatement. Thus it has been held
that: It has been held in a great number of decisions
at espionage by an employer of union
Fist-fighting between union and non-union employees in the midst activities, or surveillance thereof, are such
of a strike is no bar to reinstatement. (Teller, Labor Disputes and instances of interference, restraint or coercion
Collective Bargaining, Vol. II, p. 855 citing Stackpole Carbon, Co. 6 of employees in connection with their right to
NLRB 171, enforced 105 F2d 167.) organize, form and join unions as to constitute
unfair labor practice.
Furthermore, assuming that the acts committed by the strikers
were transgressions of law, they amount only to mere ordinary ... "Nothing is more calculated to interfere with,
misdemeanors and are not a bar to reinstatement. restrain and coerce employees in the exercise
of their right to self-organization than such
activity even where no discharges result. The
In cases involving misdemeanors the board has generally held that
information obtained by means of espionage is
unlawful acts are not bar to reinstatement. (Teller, Labor Disputes
in valuable to the employer and can be used in
and Collective Bargaining, Id., p. 854, citing Ford Motor Company,
a variety of cases to break a union." The unfair
23 NLRB No. 28.)
labor practice is committed whether the
espionage is carried on by a professional labor
Finally, it is not disputed that despite the pendency of criminal spy or detective, by officials or supervisory
charges against non-striking employees before the fiscal's office, employees of the employer, or by fellow
they were readily admitted, but those strikers who had pending employees acting at the request or direction of
charges in the same office were refused readmission. The the employer, or an ex-employee..." (Teller,
reinstatement of the strikers is thus in order. Labor Disputes and Collective Bargaining, Vol.
II, pp. 765-766, and cases cited.) .
[W]here the misconduct, whether in reinstating
persons equally guilty with those whose IV. The lower court should have ordered the reinstatement of the
reinstatement is opposed, or in other ways, officials and members of the Unions, with full back wages from
gives rise to the inference that union activities June 2, 1958 to the date of their actual reinstatement to their usual
rather than misconduct is the basis of his employment. Because all too clear from the factual and
[employer] objection, the Board has usually environmental milieu of this case, coupled with settled decisional
required reinstatement." (Teller, supra, p. law, is that the Unions went on strike because of the unfair labor
853, citing the Third Annual Report of NLRB practices committed by the respondents, and that when the strikers
[1938], p. 211.) reported back for work — upon the invitation of the respondents —
they were discriminatorily dismissed. The members and officials of
Lastly, the lower Court justified the constructive dismissal of the Unions therefore are entitled to reinstatement with back pay.
Florencio Ibarra allegedly because he committed acts inimical to
the interest of the respondents when, as president of the FGU [W]here the strike was induced and provoked
Workers and Employees Association-NATU, he advised the by improper conduct on the part of an
strikers that they could use force and violence to have a successful employer amounting to an 'unfair labor
picket and that picketing was precisely intended to prevent the practice,' the strikers are entitled to
non-strikers and company clients and customers from entering the reinstatement with back pay. (Rothenberg on
Companies' buildings. Even if this were true, the record discloses Labor Relations, p. 418.)
that the picket line had been generally peaceful, and that incidents
happened only when management men made incursions into and
[A]n employee who has been dismissed in
tried to break the picket line. At any rate, with or without the advice
violation of the provisions of the Act is entitled
of Ibarra, picketing is inherently explosive. For, as pointed out by
to reinstatement with back pay upon an
one author, "The picket line is an explosive front, charged with the
adjudication that the discharge was illegal."
emotions and fierce loyalties of the union-management dispute. It
(Id., citingWaterman S. S. Corp. v. N. L. R. B.,
may be marked by colorful name-calling, intimidating threats or
119 F2d 760; N. L. R. B. v. Richter's Bakery,
sporadic fights between the pickets and those who pass the line."
140 F2d 870; N. L. R. B. v. Southern Wood
(Mathews, Labor Relations and the Law, p. 752). The picket line
Preserving Co., 135 F. 2d 606; C. G. Conn,
being the natural result of the respondents' unfair labor practice,
Ltd. v. N. L. R. B., 108 F2d 390; N. L. R. B. v.
Ibarra's misconduct is at most a misdemeanor which is not a bar to
American Mfg. Co., 106 F2d 61; N. L. R. B. v.
reinstatement. Besides, the only evidence presented by the
Kentucky Fire Brick Co., 99 F2d 99.)
Companies regarding Ibarra's participation in the strike was the
testimony of one Rodolfo Encarnacion, a former member of the
board of directors of the petitioner FGU Insurance Group Workers And it is not a defense to reinstatement for the respondents to
and Employees Union-NATU, who became a "turncoat" and who allege that the positions of these union members have already
likewise testified as to the union activities of Atty. Lacsina, Ricardo been filled by replacements.
[W]here the employers' "unfair labor practice" Republic Act 1052 to terminate employment of employees by
caused or contributed to the strike or where the serving the required notice, or, in the absence thereof, by paying
'lock-out' by the employer constitutes an "unfair the required compensation, the said Act may not be invoked to
labor practice," the employer cannot justify a dismissal prohibited by law, e.g., dismissal for union
successfully urge as a defense that the striking activities.
or lock-out employees position has been filled
by replacement. Under such circumstances, if ... While Republic Act No. 1052 authorizes a
no job sufficiently and satisfactorily comparable commercial establishment to terminate the
to that previously held by the aggrieved employment of its employee by serving notice
employee can be found, the employer must on him one month in advance, or, in the
discharge the replacement employee, if absence thereof, by paying him one month
necessary, to restore the striking or locked-out compensation from the date of the termination
worker to his old or comparable position ... If of his employment, such Act does not give to
the employer's improper conduct was an initial the employer a blanket authority to terminate
cause of the strike, all the strikers are entitled the employment regardless of the cause or
to reinstatement and the dismissal of purpose behind such termination. Certainly, it
replacement employees wherever necessary; cannot be made use of as a cloak to
... . (Id., p. 422 and cases cited.) circumvent a final order of the court or a
scheme to trample upon the right of an
A corollary issue to which we now address ourselves is, from what employee who has been the victim of an unfair
date should the backpay payable to the unionists be computed? It labor practice. (Yu Ki Lam, et al. v. Nena
is now a settled doctrine that strikers who are entitled to Micaller, et al., 99 Phil. 904 [1956].)
reinstatement are not entitled to back pay during the period of the
strike, even though it is caused by an unfair labor practice. Finally, we do not share the respondents' view that the findings of
However, if they offer to return to work under the same conditions fact of the Court of Industrial Relations are supported by
just before the strike, the refusal to re-employ or the imposition of substantial and credible proof. This Court is not therefore
conditions amounting to unfair labor practice is a violation of precluded from digging deeper into the factual milieu of the case
section 4(a) (4) of the Industrial Peace Act and the employer is (Union of Philippine Education Employees v. Philippine Education
liable for backpay from the date of the offer (Cromwell Commercial Company, 91 Phil. 93; Lu Do & Lu Ym Corporation v. Philippine-
Employees and Laborers Union vs. Court of Industrial Relations, L- Land-Air-Sea Labor Union, 11 SCRA 134 [1964]).
19778, Decision, Sept. 30, 1964, 12 SCRA 124; Id., Resolution on
motion for reconsideration, 13 SCRA 258; see also Mathews,
V. The petitioners (15 of them) ask this Court to cite for contempt
Labor Relations and the Law, p. 730 and the cited cases). We
the respondent Presiding Judge Arsenio Martinez of the Court of
have likewise ruled that discriminatorily dismissed employees must
Industrial Relations and the counsels for the private respondents,
receive backpay from the date of the act of discrimination, that is,
on the ground that the former wrote the following in his decision
from the date of their discharge (Cromwell Commercial Employees
subject of the instant petition for certiorari, while the latter quoted
and Laborers Union vs. Court of Industrial Relations, supra).
the same on pages 90-91 of the respondents' brief: .
PMOG thereafter filed on July 17, 1954 a notice of intention to A joint trial was held of all the cases and on December 20, 1962
strike stating as reasons therefor PHILSTEAM's alleged refusal to the Court of Industrial Relations rendered thereon a single
decision, finding in the cases pertinent to this appeal, i.e., where to act as their bargaining agent; (2) the subjection of PMOG to
PHILSTEAM is a party, as follows: vilification; and (3) the participation of PHILSTEAM's pier
superintendent in soliciting membership for a competing union.
(1) Case 618-ULP, PHILSTEAM committed unfair labor practice in
having interfered with, restrained and coerced employees in the PHILSTEAM admits that it initiated and carried out an investigation
exercise of their rights to self-organization; of its officers as to their membership in PMOG and whether they
had given PMOG authority to represent them in collective
(2) Case 1002-ULP, PMOG has not been shown to have bargaining. The reason for this, PHILSTEAM would, however,
committed unfair labor practice; and, aver, was merely to ascertain for itself the existence of a duty to
bargain collectively with PMOG, a step allegedly justified by
PMOG's refusal to furnish proof of majority representation.
(3) Case 6-IPA, the strike of PMOG against PHILSTEAM was
justified and lawfully carried out.
The asserted reason for the investigation cannot be sustained. The
record discloses that such investigation was started by
Accordingly, it stated in the dispositive portion relative to the
PHILSTEAM even before it received PMOG's reply stating a
above-mentioned cases:
refusal to submit proof of majority representation. Specifically, the
investigation was put under way on June 29, 1954 — the same
IN VIEW OF ALL THE FOREGOING, the Court hereby day PHILSTEAM sent its request that PMOG submit proof of
orders: majority representation — whereas, PHILSTEAM knew of PMOG's
refusal to furnish said proof only on July 6, 1954, when it received
xxx xxx xxx PMOG's reply letter. The respondent court, therefore, aptly
concluded that PMOG's refusal to submit evidence showing it
2. Philippine Steam Navigation Company, its agents, represented a majority had nothing to do with PHILSTEAM's
successors and assigns, to cease and desist from decision to carry out the investigation.
interrogating and investigating their employees to
determine whether they have authorized Philippine An employer is not denied the privilege of interrogating its
Marine Officers Guild or any other labor organization to employees as to their union affiliation, provided the same is for a
represent them for the purpose of collective bargaining, legitimate purpose and assurance is given by the employer that no
discouraging or trying to discourage any of such reprisals would be taken against unionists. Nonetheless, any
employees from remaining as a member of Philippine employer who engages in interrogation does so with notice that he
Marine Officers Guild or any other labor organization, risks a finding of unfair labor practice if the circumstances are such
and encouraging or trying to encourage any of such that his interrogation restrains or interferes with employees in the
employees to join Cebu Seamen's Association or any exercise of their rights to self-organization. (Blue Flash Express
other labor organization, and, in any manner, interfering Co., Inc., 109 NLRB 591.)
with, restraining, or coercing their employees in the
exercise of their right to self-organization and other rights The respondent court has found that PHILSTEAM's interrogation of
guaranteed in Section 3 of this Act; and offer all of their its employees had in fact interfered with, restrained and coerced
striking employees immediate and full reinstatement to the employees in the exercise of their rights to self-organization
their former or substantially equivalent positions, without (Petition, Annex A, p. 31). Such finding being upon questions of
back salaries and without prejudice to their seniority or fact, the same cannot be reversed herein, because it is fully
other rights and privileges, unless they have found supported by substantial evidence.
substantially equivalent employment elsewhere during
the pendency of this case.
The rule in this jurisdiction is that subjection by the company of its
employees to a series of questionings regarding their membership
PHILSTEAM moved for reconsideration but the motion was denied in the union or their union activities, in such a way as to hamper
on May 18, 1962 by resolution of the Court of Industrial the exercise of free choice on their part, constitutes unfair labor
Relations in banc. The present appeal by PHILSTEAM is from the practice (Scoty's Department Store vs. Micaller, 52 O.G. 5119).
decision and resolution en banc in Case 6-IPA, Case 618-ULP and PHILSTEAM's aforestated interrogation squarely falls under this
Case 1002-ULP. rule.
Petitioner would contend that the respondent court erred in PMOG's subjection to vilification is likewise borne out by
ordering it to reinstate the PMOG strikers. In support of this it substantial evidence. Santiago Beliso, PHILSTEAM's purchasing
advances the argument that, first, PHILSTEAM did not commit acts agent, told Luis Feliciano, on August 6, 1954, that PMOG was a
constituting unfair labor practice; and, second, PMOG's strike was "money-asking union," that "all the members of the FFW are low
illegal. people" and that CSA "is a good union." Fernando Guerrero,
PHILSTEAM's inter-island manager, had authorized Beliso to
The finding of respondent court in Case 618-ULP, as stated, is that assist him in his investigation of PMOG membership. The
PHILSTEAM interfered with, coerced, and restrained employees in statement of Beliso was made in the presence of PHILSTEAM
their rights to self-organization. The same, if true, is unfair labor office manager Ernesto Mañeru and PHILSTEAM pier
practice (Section 4 [a] [1], Republic Act 875). superintendent Jose Perez, and these supervisory officials did
nothing to disavow Beliso's conduct as not intended to represent
The acts found by respondent court constituting the foregoing PHILSTEAM's opinion. PHILSTEAM, through its supervisory
unfair labor practice are: (1) the interrogation and investigation by officials, obviously made it appear to Feliciano that Beliso was
PHILSTEAM's supervisory officials of its captains, deck officers speaking for or on behalf of the company, when he made the
and engineers, to determine whether they had authorized PMOG
remarks derogatory to PMOG and favorable to CSA. PHILSTEAM From the foregoing it follows that PMOG's strike was for a lawful
thereby interfered with Feliciano's right to self-organization. purpose and, therefore, justified.
Appellant would, however, assert an inconsistency on the part of As to the question of reinstatement, we have already ruled,
respondent court in finding that Beliso was made to appear by in Cromwell Commercial Employees and Laborers Union (PTUG)
PHILSTEAM supervisory officials as acting for them as testified to vs. C.I.R., et al., L-19778, September 30, 1964, that striking
by Feliciano, when said court elsewhere rejected a testimony to employees are entitled to reinstatement, whether or not the strike
this effect by Eugenio Obispo. was the consequence of the employer's unfair labor practice,
unless, where the strike was not the consequence of any unfair
Appellant refers to the testimony of Obispo, an engine officer, that labor practice, the employer has hired others to take the place of
he signed up with CSA because sometime in July 1954 he was the strikers and has promised them continued employment (2
intimidated by Santiago Beliso. Obispo's testimony, however, Teller, LABOR DISPUTES AND COLLECTIVE BARGAINING,
referred to a different incident, wherein there was no showing that Sec. 371,. pp. 996-997).
Beliso acted in the presence and with the apparent approval of
high supervisory officials of PHILSTEAM. Furthermore, Obispo's The present strike was the consequence of PHILSTEAM's unfair
credibility, unlike that of Feliciano, was put in doubt because he labor practice. Reinstatement of the strikers, who have not found
falsely stated that Beliso was an Assistant Manager of substantially equivalent employment elsewhere, therefore follows
PHILSTEAM. We find no inconsistency or discrimination in the as a matter of right, notwithstanding that the employer has hired
appreciation of the evidence by respondent court in giving others to take the place of the strikers for the purpose of continuing
credence to Feliciano, as to one incident, while disbelieving the operation of the plant or the business of the industry (2 Teller,
Obispo, as to another. op. cit., Sec. 277, p. 754).
Finally, of record also stands the fact that PHILSTEAM pier Petitioner finally argues that reinstatement was forfeited due to the
superintendent Valeriano Teves helped bring about the affiliation of failure of the strike to paralyze the company's business or the
Diosdado Capilitan, a PMOG member, with CSA, by telling him failure of the employees to offer to return to work voluntarily and
that his joining with CSA would not affect his PMOG affiliation. This without any condition. As adverted to above, even if the employer
incident was testified to by PHILSTEAM witnesses themselves. hires others to replace the strikers, thereby avoiding paralysis of
While such a statement, if considered as an isolated remark, may his business, if the strike is against an unfair labor practice on its
be a harmless expression of opinion, it in reality amounted to part, the employer is bound to reinstate the strikers. As to the
support of CSA's membership solicitation drive, in the light of the matter of a voluntary offer to return to work without any condition
circumstances in which it was made. For it in effect encouraged the same is relevant only to the question of payment of back
membership in the competing, union and indorsed CSA's wages in addition to reinstatement. Since in these cases no back
solicitation, it least with respect to Capilitan. wages were awarded, and the union has not appealed, said
question is not in point.
The respondent court absolved PMOG from the charge of unfair
labor practice in Case 1002-ULP. The alleged threats and violence WHEREFORE, the decision and resolution appealed from are
on the part of PMOG strikers were found not sufficiently hereby affirmed, with costs against petitioner. So ordered.
established by the evidence. And PHILSTEAM in this appeal no
longer argues that said threats and violence were committed. Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Regala,
Makalintal and Zaldivar, JJ., concur.
Nonetheless, PHILSTEAM, would contend that PMOG's strike was Reyes, J.B.L., J., is on leave.
illegal, for the reason that the purpose of the strike was illegal. It is
argued that PMOG staged a strike so as to compel PHILSTEAM to
bargain collectively with it notwithstanding that it was a minority
union. First of all, the statement that PMOG is a minority union is
not accurate. Respondent court precisely found that there has
been no proof as to which union, PMOG, CSA or any other,
represented the majority of PHILSTEAM employees. For lack of
showing that CSA represented the majority it declared the
PHILSTEAM-CSA collective bargaining agreement null and void. It
stated that the parties to the dispute were welcomed to file a
petition for certification election to decide this point.
Such being the case, the dismissal of Besana and Rodiel 1Luzon Stevedoring Co., Inc. vs. CIR, L-16682, July 26,
constituted unfair labor practice under Section 4(a) (1) and (4) of
1963; Manila Metal Caps and Tin Cans Manufacturing
Republic Act 875:
Co. vs. CIR, L-17579, July 31, 1963.
SEC.4. Unfair Labor Practices. — 2April 19, 1960 and April 18, 1960, respectively.
(a) It shall be unfair labor practice for an employer: 3Besana was employed since October 4, 1956; Rodiel,
since November, 1957.
(1) To interfere with, restrain or coerce
employees in the exercise of their rights 4"SEC. 3. Employee's Right to Self-Organization. —
guaranteed in Section three;4
Employees shall have the right to self-organization and
to form, join or assist labor organzations of their own
xxx xxx xxx choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in
(4) To discriminate in regard to hire or tenure of concerted activities for the purpose of collective
employment or any term or condition of employment to bargaining and other mutual aid or protection. ... .
encourage or discourage membership in any labor
organization: ... .
Since the only reason or basis for Besana and Rodiel's dismissal
was in fact their actuation as officers of VIBEMWU, the dismissal is
clearly discriminatory.
G.R. No. L-51494 August 19, 1982 their former positions with fun backwages from the date of their
dismissal up to their actual reinstatement. 3
JUDRIC CANNING CORPORATION, petitioner,
vs. The petitioner corporation appealed to the Ministry of Labor, 4 but
THE HONORABLE AMADO G. INCIONG, in his capacity as its appeal was dismissed for lack of merit on August 3,
Deputy Minister of Labor, THE HONORABLE FRANCISCO L. 1979. 5 Thereafter, a writ of execution was issued on September
ESTRELLA, in his capacity as Director of Region IV, Ministry 24, 1979. 6
of Labor, UNITED LUMBER & GENERAL WORKERS OF THE
PHILIPPINES (ULGWP), NORMA PINEDA, LEONILA Hence, the present recourse. As prayed for, a temporary
MORALES, TERESITA BALMACEDA, VICKY PENALOSA, restraining order, restraining the respondents from enforcing,
ADELINA VALENZUELA and JUANITA REPOSAR, respondents. implementing and/or carrying out the writ of execution dated
September 24, 1979, was issued on November 12, 1979. 7
Florante A. Bautista for petitioner.
1. The petitioner contends that the Regional Director's finding,
The Solicitor General for respondent Deputy Minister. witch was affirmed by the respondent Deputy Minister of Labor,
that the petitioner is guilty of unfair labor practice for terminating
Eduardo G. Araulo for private respondents. the services of the respondent union members due to their alleged
union activities, is not supported by the evidence of record.
&
This contention is untenable.ït¢@lFº The record shows that after
the parties had submitted their respective position papers, a
CONCEPCION JR., J.:1äwphï1.ñët hearing was held, at the conclusion of which, the respondent
Regional Director found that the private respondents did not
Petition for certiorari, with a prayer for the issuance of a writ of abandon their jobs but were dismissed because of their union
preliminary injunction or restraining order, to annul and set aside activities. This is a finding of fact which may not now be disturbed.
the Order issued by the Regional Director of the Ministry, of Labor
on November 15, 1978 in Case No. R4-STF – 5515-78, entitled: Besides, the private respondents immediately filed a complaint for
"United Lumber and General Workers of the Philippines (ULGWP), illegal dismissal, seeking their reinstatement, on August 24, 1978,
et al., complainants, versus Judric Canning Corporation, soon after their services were terminated on August 19, 1978. it
respondents," which ordered the herein petitioner to reinstate would be illogical for the private respondents to abandon their work
immediately herein private respondents Norma Pineda, Vicky and then immediately file an action seeking their reinstatement.
Penalosa, Leonila Morales, Teresita Balmaceda, Adelina
Valenzuela, and Juanita Reposar to their former positions with full
backwages from the date of their dismissal up to their actual Moreover, there was no reason at all and none has been
reinstatement; the Order issued by the respondent Amado G. suggested by the petitioner, for the private respondents to
Inciong on August 3, 1979, which affirmed the aforestated order of abandon their work. No employee with a family to support, like the
the Regional Director and dismissed the appeal of the herein private respondents, would abandon their work knowing fully well
petitioner; and the Writ of Execution issued in said case on of the acute unemployment and underemployment problem and
September 24, 1979. the difficulty of looking for a means of livelihood. As the Solicitor
General stated: "To get a job is difficult; to run from it is foolhardy."
The records show that the herein private respondents Norma
Pineda, Vicky Penalosa, Leonila Morales, Teresita Balmaceda, But, most of all, the petitioner stated that in spite of its position that
Adelina Valenzuela, and Juanita Reposar are employees of the the private respondents had abandoned their jobs, it "offered to
petitioner corporation and are members of the United Lumber and pay respondent union members severance pay of one (1)
General Workers of the Philippines (ULGWP). On August 19, month." 8 This is a clear admission of the charge of arbitrary
1978, the said complainants were allegedly not allowed to report dismissal, for why should the petitioner offer to pay what it calls
for work due to their union activities in soliciting membership in a "severance pay" if the private respondents were not, indeed,
union yet to be organized in the company and their time cards dismissed, or if the petitioner sincerely believed in the
were removed from the rack. As a result, the said complainants righteousness of its stance?
and their labor union filed a complaint for unfair labor practice
against the petitioner with Region IV of the Ministry of Labor, 2. The petitioner further claims that it could not have committed the
seeking the reinstatement of the complainants with full unfair labor practice charge for dismissing some of its employees
backwages. 1 due to their alleged union activities because the alleged dismissal
took place more than four (4) months before the organizational
The herein petitioner denied having locked out the complainants meeting of the union and more than one (1) year before actual
and claims that the said complainants failed to report for work and registration of said union with the Labor Organization Division of
abandoned their positions. The petitioner also denied having the Bureau of Labor Relations.
knowledge of the union activities of the complainants until August
30, 1978, when it was served notice of a petition for direct The contention is without merit. Under Article 248(a) of the Labor
certification filed by the complainant union. 2 Code of the Philippines, "to interfere with, restrain, or coerce
employees in their exercise of the right to self-organization" is an
After hearing the parties, or on November 15, 1978, the Regional unfair labor practice on the part of the employer. Paragraph (d) of
Director of Region IV of the Ministry of Labor, after finding that the said Article also considers it an unfair labor practice for an
petitioner had dismissed the complainants without valid cause, employer "to initiate, dominate, assist or otherwise interfere with
ordered the petitioner to immediately reinstate the complainants to the formation or administration of any labor organization, including
the giving of financial or other support to it. In this particular case,
the private respondents were dismissed or their services were collective agreement dispensing with the
terminated, because they were soliciting signatures in order to clearance requirement shall be null and void.
form a union within the plant. In their affidavit, executed on
September 19, 1978, 9 the private respondents However, the questioned order finding the dismissal of the private
stated: 1äwphï1.ñët respondents to be without just cause is not based upon such
absence of prior clearance alone. The respondent Regional
Na kami ay nagkampanya upang papirmahin Director also found that the private respondents were dismissed
namin sa 'membership form' ng ULGWP ang because of their union activities and for the failure of the petitioners
nakakarami (majority) sa mga empleyado at to file a report in lieu of prior clearance, as provided for in Section
nagharap kaming petisyon sa Ministri ng 11, Rule XIV, Book V of the Implementing Rules and
Paggawa upang masertify ang aming unyon sa Regulations.ït¢@lFº The questioned order further reads, as
Case No. R4-LRD-M-8-403- 78; follows: 1äwphï1.ñët
Petitioner's claim that the union counsel could not file an unfair
It appears that the facts are quite clear and not
labor practice charge directly with respondent court may be correct
controverted. After the termination of
as far as it goes. What the union had actually filed on March 28,
employment of the individual complainants on
1968 was a separate "urgent petition with prayer for a restraining
March 28, 1968, the Board of Directors of the
order." Respondent court however in effect granted the union's
Manila Hotel Company, on April 4, 1968 met,
alternative prayer for consolidation of the new unfair labor practice
deliberated and decided to extend some
charge with the union's pending case No. 4506-ULP. Assuming
monetary benefits to the terminated employees
that a prior preliminary investigation was necessary to determine
who are incidentally members of complainant
the merit of the complaint, it cannot be gainsaid that in effect
union. This deliberation was formally reduced
respondent court undertook such preliminary investigation on its
to writing in a subsequent meeting on April 8,
own when it immediately called the parties to a conference on the
1968. Pertinent portions of the deliberation ACCORDINGLY, the decision, orders and resolutions appealed
reads: from are hereby affirmed. With reference to Case L-30139
involving payment of retirement gratuity to the sixteen (16)
"Paragraph 1 — qualified employees therein named, respondent court is directed to
Employees who have make the corresponding verification that their accountabilities to
rendered one year to the Government Service Insurance System as such members-
nineteen years of services employees are fully discharged before final payment of the
with the Manila Hotel amounts found due to them under the appealed order, herein
Company should be paid affirmed, is made. No costs.
one month salary for every
year of service, but not Concepcion, C.J., Zaldivar, Castro, Makasiar, Antonio and
exceeding 12 months" Esguerra, JJ., concur.
(Exh. 1-B).
Makalintal, J., is on leave.
xxx xxx xxx
Fernando, J., concurs except as to the last paragraph in II -- re L-
Finally the company admitted that former 30139.
employees of the Manila Hotel Company in
Manila were given one month pay for every Separate Opinions
year of service but not exceeding twelve (12)
months when their services were terminated as
BARREDO, J., concurring:
a result of the relief of Mr. Zamora in 1954,
June 30, 1954, except those employees who
were transferred to the Pines Hotel. (t.s.n., I agree fully with the judgment in this case. The only purpose of
page 122, Aug. 9, 1968) this separate concurrence is to emphasize the fact that the appeals
in G.R. Nos. L-30139 and 30818 are completely devoid of merit
and should be declared as frivolous and dilatory. The attack
Respondent court, as in L-30139, made the same reservation of
against the decision and orders of the Court of Industrial Relations
holding in abeyance settlement of outstanding hotel bills in the total
involved in said appeals for want of jurisdiction has absolutely no
amount of P2,921.94 against the individual employees liable
basis.
therefor until after presentation by petitioner of the necessary
evidence.
The record shows that on March 28, 1968, when respondent union
filed with the Industrial Court its "Urgent Petition, with prayer for a
Respondent court accordingly ordered the following:
temporary restraining order" to enjoin the implementation of the
abrupt termination of the services of its members working at the
From the evidence, testimonial and documentary, attached Pines Hotel, there was pending with said court an unfair labor
herewith is a statement of the claims of the individual workers practice case, No. 4506-ULP, in which the matter involved was
including hotel bills, one-month advance pay, and 25% attorney's discrimination in the payment of Christmas bonus and salary
fees. (Exh. B-2, B-3) 19 adjustments. While it may be true that such abrupt termination of
the services of said union members could be considered
In view of the foregoing, the respondent, independently of the then pending unfair labor practice case, the
Manila Hotel Company, is hereby ordered to developments that swiftly took place after the filing of the union's
deposit with the Court the amount of petition on March 28, 1968 made resort to the usual procedure in
P103,856.30 in order to meet the total claims unfair labor practice cases unnecessary insofar as the matter of
of the workers less their one-month advance such abrupt termination of services was concerned, for the simple
pay," As already adverted to above, petitioner reason that when the court tried to look into the union's grievance
assigns in this appeal the very same identical in the conferences of March 29 and April 2, 1968, the question of
errors assigned by it in Case L-30139, based whether or not petitioner had committed an unfair labor practice in
on its "opposition and/or motion to dismiss" relation to the termination of services just mentioned had become
filed on May 2, 1968 with respondent court. moot and academic, considering that by resolving to grant
gratuities to the members concerned, and the latter agreeing
Accordingly, petitioner's appeal must perforce be rejected for the thereto, it is as if the said abrupt termination of services were
very same grounds already stated above with reference to Case L- admitted to be improper and unjustified without granting the said
30139. As in said case L-30139, petitioner has in no manner gratuities. Accordingly, there was no reason anymore for the court
questioned or disputed the factual bases and findings of to proceed any further.
respondent court as to its undertaking and agreement in the record
to pay the retirement gratuity to the employees, by way of The pertinent provision of the Industrial Peace Act, Section 5,
settlement of their dispute arising from the protested abrupt Paragraphs (a) and (b) read as follows:
termination of their employment with the sudden sale of the Pines
Hotel to a third party. (a) The Court shall have jurisdiction over the
prevention of unfair labor practices and is
Respondent court in issuing the appealed payment order was but empowered to prevent any person from
acting within its jurisdiction properly assumed ofimplementing the engaging in any unfair labor practice. This
very agreement and settlement for payment of retirement gratuity power shall be exclusive and shall not be
arrived at by the parties in the case before it. affected by any other means of adjustment or
prevention that has been or may be
established by an agreement, code, law or extent of allowing the Court to base its decision on matters beyond
otherwise. those presented during the hearing and parties who are non-
lawyers to appear without counsel, viewed properly, do not enjoin
(b) The Court shall observe the following the immediate termination of unfair labor practice case if, for one
procedure without resort to mediation and reason or another, all the parties concerned happen to be before
conciliation as provided in section four of the Court and after an exchange of views agree on how to fairly
Commonwealth Act Numbered One hundred settle the case without further proceedings, when by doing so, as
and three, as amended, or to any pre-trial in these cases, the unfair labor practice charged is practically
procedure. Whenever it is charged by an assumed to be true and the complainants are granted relief which
offended party or his representative that any appears to the Court just and consistent with the objective of the
person has engaged or is engaging in any law, under the circumstances obtaining. In other words, my view is
such unfair labor practice, the Court or any that the procedure for unfair labor practice cases outlined in
agency or agent designated by the Court must Paragraph (b) above should be generally followed, but it is not
investigate such charge and shall have the violative of the law and subversive of the broad jurisdiction of the
power to issue and cause to be served upon Industrial Court conferred in Paragraph (a) above for said Court to
such person a complaint stating the charges in adopt in any given case a speedier and more practical procedure
that respect and containing a notice of hearing for accomplishing the purpose of the law and rendering justice to
before the Court or a member thereof, or the parties.
before a designated Hearing Examiner at the
time and place fixed therein not less than five Separate Opinions
nor more than ten days after serving the said
complaint. The person complained of shall BARREDO, J., concurring:
have the right to file an answer to the
complaint and to appear in person otherwise
I agree fully with the judgment in this case. The only purpose of
(but if the Court shall so request, the
this separate concurrence is to emphasize the fact that the appeals
appearance shall be personal) and give
in G.R. Nos. L-30139 and 30818 are completely devoid of merit
testimony at the place and time fixed in the
and should be declared as frivolous and dilatory. The attack
complaint. In the discretion of the Court, a
against the decision and orders of the Court of Industrial Relations
member thereof or a Hearing Examiner, any
involved in said appeals for want of jurisdiction has absolutely no
other person may be allowed to intervene in
basis.
the said proceeding and to present testimony.
In any such proceeding, the rules of evidence
prevailing in courts of law or equity shall not be The record shows that on March 28, 1968, when respondent union
controlling and it is the spirit and intention of filed with the Industrial Court its "Urgent Petition, with prayer for a
this Act that the Court and its members and temporary restraining order" to enjoin the implementation of the
Hearing Examiners shall use every and all abrupt termination of the services of its members working at the
reasonable means to ascertain the facts in Pines Hotel, there was pending with said court an unfair labor
each case speedily and objectively and without practice case, No. 4506-ULP, in which the matter involved was
regard to technicalities of law or procedure. In discrimination in the payment of Christmas bonus and salary
rendering its decisions, the Court shall not be adjustments. While it may be true that such abrupt termination of
bound solely by the evidence presented during the services of said union members could be considered
the hearing but may avail itself of all other independently of the then pending unfair labor practice case, the
means such as (but not limited to) ocular developments that swiftly took place after the filing of the union's
inspections and questioning of well-informed petition on March 28, 1968 made resort to the usual procedure in
persons which results must be made a part of unfair labor practice cases unnecessary insofar as the matter of
the record. In the proceeding before the Court such abrupt termination of services was concerned, for the simple
or a Hearing Examiner thereof, the parties reason that when the court tried to look into the union's grievance
shall not be required to be represented by legal in the conferences of March 29 and April 2, 1968, the question of
counsel and it shall be the duty and obligation whether or not petitioner had committed an unfair labor practice in
of the Court or Hearing Examiner to examine relation to the termination of services just mentioned had become
and cross-examine witnesses on behalf of the moot and academic, considering that by resolving to grant
parties and to assist in the orderly presentation gratuities to the members concerned, and the latter agreeing
of the evidence. thereto, it is as if the said abrupt termination of services were
admitted to be improper and unjustified without granting the said
gratuities. Accordingly, there was no reason anymore for the court
It is true that under these provisions, there is an indication that
to proceed any further.
mediation and conciliation as well as pre-trial procedure need not
be resorted to in unfair labor practice cases, but this is because
such procedures may unnecessarily delay the prevention of the The pertinent provision of the Industrial Peace Act, Section 5,
unfair labor practice complained of, contrary to the spirit of the law. Paragraphs (a) and (b) read as follows:
I take it, however, that the very provisions of the section
aforequoted to the effect that "In any such proceeding, the rules of (a) The Court shall have jurisdiction over the
evidence prevailing in courts of law or equity shall not be prevention of unfair labor practices and is
controlling and it is the spirit and intention of this Act that the Court empowered to prevent any person from
and its members and Hearing Examiners shall use all reasonable engaging in any unfair labor practice. This
means to ascertain the facts in each case speedily and objectively power shall be exclusive and shall not be
without regard to technicalities of law or procedure" even to the affected by any other means of adjustment or
prevention that has been or may be without regard to technicalities of law or procedure" even to the
established by an agreement, code, law or extent of allowing the Court to base its decision on matters beyond
otherwise. those presented during the hearing and parties who are non-
lawyers to appear without counsel, viewed properly, do not enjoin
(b) The Court shall observe the following the immediate termination of unfair labor practice case if, for one
procedure without resort to mediation and reason or another, all the parties concerned happen to be before
conciliation as provided in section four of the Court and after an exchange of views agree on how to fairly
Commonwealth Act Numbered One hundred settle the case without further proceedings, when by doing so, as
and three, as amended, or to any pre-trial in these cases, the unfair labor practice charged is practically
procedure. Whenever it is charged by an assumed to be true and the complainants are granted relief which
offended party or his representative that any appears to the Court just and consistent with the objective of the
person has engaged or is engaging in any law, under the circumstances obtaining. In other words, my view is
such unfair labor practice, the Court or any that the procedure for unfair labor practice cases outlined in
agency or agent designated by the Court must Paragraph (b) above should be generally followed, but it is not
investigate such charge and shall have the violative of the law and subversive of the broad jurisdiction of the
power to issue and cause to be served upon Industrial Court conferred in Paragraph (a) above for said Court to
such person a complaint stating the charges in adopt in any given case a speedier and more practical procedure
that respect and containing a notice of hearing for accomplishing the purpose of the law and rendering justice to
before the Court or a member thereof, or the parties.
before a designated Hearing Examiner at the
time and place fixed therein not less than five
nor more than ten days after serving the said
complaint. The person complained of shall
have the right to file an answer to the
complaint and to appear in person otherwise
(but if the Court shall so request, the
appearance shall be personal) and give
testimony at the place and time fixed in the
complaint. In the discretion of the Court, a
member thereof or a Hearing Examiner, any
other person may be allowed to intervene in
the said proceeding and to present testimony.
In any such proceeding, the rules of evidence
prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of
this Act that the Court and its members and
Hearing Examiners shall use every and all
reasonable means to ascertain the facts in
each case speedily and objectively and without
regard to technicalities of law or procedure. In
rendering its decisions, the Court shall not be
bound solely by the evidence presented during
the hearing but may avail itself of all other
means such as (but not limited to) ocular
inspections and questioning of well-informed
persons which results must be made a part of
the record. In the proceeding before the Court
or a Hearing Examiner thereof, the parties
shall not be required to be represented by legal
counsel and it shall be the duty and obligation
of the Court or Hearing Examiner to examine
and cross-examine witnesses on behalf of the
parties and to assist in the orderly presentation
of the evidence.
Excluded from the above schedule are the Warehouse We agree, hence, we sustain petitioner. The right to fix the
and QA employees who are on shifting. Their work work schedules of the employees rests principally on their
and break time schedules will be maintained as it is employer. In the instant case petitioner, as the employer, cites as
now.[1] reason for the adjustment the efficient conduct of its business
operations and its improved production.[6] It rationalizes that while
Since private respondent felt affected adversely by the the old work schedule included a 30-minute paid lunch break, the
change in the work schedule and discontinuance of the 30-minute employees could be called upon to do jobs during that period as
paid ―on call‖ lunch break, it filed on behalf of its members a they were ―on call.‖ Even if denominated as lunch break, this
complaint with the Labor Arbiter for unfair labor practice, period could very well be considered as working time because the
discrimination and evasion of liability pursuant to the resolution of factory employees were required to work if necessary and were
this Court in Sime Darby International Tire Co., Inc. v. paid accordingly for working. With the new work schedule, the
NLRC.[2]However, the Labor Arbiter dismissed the complaint on the employees are now given a one-hour lunch break without any
ground that the change in the work schedule and the elimination of interruption from their employer. For a full one-hour undisturbed
the 30-mi nute paid lunch break of the factory workers constituted lunch break, the employees can freely and effectively use this hour
a valid exercise of management prerogative and that the new work not only for eating but also for their rest and comfort which are
conducive to more efficiency and better performance in their
work. Since the employees are no longer required to work during
this one-hour lunch break, there is no more need for them to be
compensated for this period. We agree with the Labor Arbiter that
the new work schedule fully complies with the daily work period of
eight (8) hours without violating the Labor Code.[7] Besides, the
new schedule applies to all employees in the factory similarly
situated whether they are union members or not.[8]
Consequently, it was grave abuse of discretion for public
respondent to equate the earlier Sime Darby case[9] with the facts
obtaining in this case. That ruling in the former case is not
applicable here. The issue in that case involved the matter of
granting lunch breaks to certain employees while depriving the
other employees of such breaks. This Court affirmed in that case
the NLRC‘s finding that such act of management was
discriminatory and constituted unfair labor practice.
The case before us does not pertain to any controversy
involving discrimination of employees but only the issue of whether
the change of work schedule, which management deems
necessary to increase production, constitutes unfair labor
practice. As shown by the records, the change effected by
management with regard to working time is made to apply to all
factory employees engaged in the same line of work whether or
not they are members of private respondent union. Hence, it
cannot be said that the new scheme adopted by management
prejudices the right of private respondent to self-organization.
Every business enterprise endeavors to increase its
profits. In the process, it may devise means to attain that
goal. Even as the law is solicitous of the welfare of the employees,
it must also protect the right of an employer to exercise what are
clearly management prerogatives.[10] Thus, management is free to
regulate, according to its own discretion and judgment, all aspects
of employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers.[11] Further, management retains
the prerogative, whenever exigencies of the service so require, to
change the working hours of its employees. So long as such
prerogative is exercised in good faith for the advancement of the
employer‘s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or
under valid agreements, this Court will uphold such exercise.[12]
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be
supposed that every dispute will be automatically decided in favor
of labor. Management also has right which, as such, are entitled to
respect and enforcement in the interest of simple fair
play. Although this Court has inclined more often than not toward
the worker and has upheld his cause in his conflicts with the
employer, such as favoritism has not blinded the Court to the rule
that justice is in every case for the deserving, to be dispensed in
the light of the established facts and the applicable law and
doctrine.[13]
WHEREFORE, the Petition is GRANTED. The Resolution of
the National Labor Relations Commission dated 29 November
1994 is SET ASIDE and the decision of the Labor Arbiter dated 26
November 1993 dismissing the complaint against petitioner for
unfair labor practice is AFFIRMED.
SO ORDERED.
Davide, Jr., (Chairman), Vitug,
Panganiban, and Quisumbing, JJ., concur.
G.R. No. 73504 October 15, 1991 Luces, president of the Balmar Farms Employees Association,
addressed to the Regional Director of the Ministry of Labor and
BALMAR FARMS, INC., petitioner, Employment (MOLE), about their "disaffiliation from ALU" (Rollo, p.
vs. 31).
NATIONAL LABOR RELATIONS COMMISSION AND
ASSOCIATED LABOR UNIONS (ALU), respondent. In another letter dated March 1, 1983, ALU answered BALMAR's
letter of February 25, 1983 and requested that it be recognized as
Rudy G. Agravante for petitioner. the bargaining representative it being certified by the MOLE as the
sole and exclusive bargaining representative of BALMAR's rank
and file workers (Rollo, p. 32).
PARAS, J.:
That on February 8, 1983, ALU sent a letter to BALMAR, attaching WHEREFORE, premises considered, the
therewith their proposals for collective bargaining agreement appeal is as it is hereby DISMISSED for
(Rollo, pp. 27-30). obvious lack of merit and the appealed
Decision affirmed en toto.
On February 25, 1983, BALMAR made a reply to the effect that it
can not favorably act on their request for the reason, among SO ORDERED. (Rollo, pp. 19-20).
others, that it has been furnished a copy of the letter of Mr. Johnny
On September 4, 1985, BALMAR moved for the reconsideration of more than a majority of them would like to negotiate directly with
the resolution of the NLRC (Rollo, pp. 57-59). And on October 4, their employer BALMAR. There is no showing, however, that said
1985, the NLRC issued a resolution denying the motion for letter was favorably acted upon, much less, is there an order
reconsideration (Rollo, p. 21). superseding the Med-Arbiter's order of October 27, 1982 certifying
ALU as the sole and exclusive bargaining representative of the
Hence, this petition. rank and file workerks of BALMAR.
The pivotal issue in this case is whether or not petitioner BALMAR BALMAR cannot also invoke good faith in refusing to negotiate
is guilty of unfair labor practice for refusing to bargain collectively with ALU, considering that the latter has been certified as the
with ALU. exclusive bargaining representative of BALMAR rank and file
employees. As observed by the Solicitor General, BALMAR'S
pretense that majority of its rank and file employees disaffiliated
The petition is devoid of merit.
simply because of a letter it received to that effect, all the more
sustains the finding of bad faith for it is not for the petitioner
The record shows that on October 27, 1982, Med-Arbiter Antonino BALMAR to question which group is the collective bargaining
G. Jolejole issued an order certifying ALU as the sole and representative of its rank and file employees.
exclusive bargaining representative of the rank and file workers
and employees of BALMAR, it appearing that in the certification
Balmar's taking side with the rank and file employee who allegedly
election held at the premises of the employer BALMAR on October
disaffiliated, renders its stand on the matter highly suspicious
19, 1982, ALU obtained the majority of the votes cast.
(Rollo, pp. 76-77).
The purpose of certification election is to give the employees true
It can, therefore, be inferred that BALMAR's refusal to bargain
representation in their collective bargaining with an employer
collectively with ALU is a clear act of unfair labor practice. Article
(Confederation of Citizens Labor Union (CCLU) v. Noriel, 116
248 (Labor Code, as amended), enumerates unfair labor practices
SCRA 649 [1982]), because certification election is the most
committed by employers such as for them:
democratic and expeditious method by which the laborers can
freely determine the union that shall act as their representative in
their dealing with the establishment where they are working (g) To violate the duty to bargain collectively as
(National Assocation of Free Trade Union v. Bureau of Labor prescribed by this Code;
Relations, 161 SCRA 246 [1988]). It is the most effective way of
determining which labor organization can truly represent the PREMISES CONSIDERED, the petition is DISMISSED for lack of
working force (PLUM Federation of Industrial and Agrarian merit and the assailed resolution is AFFIRMED.
Workers v. Noriel, 119 SCRA 299 [1982]).
SO ORDERED.
Employees (like the employees in the case at bar) have a
constitutional right to choose their own bargaining representative Padilla and Regalado, JJ., concur.
(Phil. Airlines Employees' Association (PALEA) v. Ferrer-Calleja,
162 SCRA 246 [1988]) and it is only through certification election
Melencio-Hererra, J., is on leave.
that they can obtain this purpose.
# Footnotes
In the bargaining process, the workers and employer shall be
represented by their exclusive bargaining representatives. The
labor organization designated or selected by the majority of * Penned by Presiding Commissioner Diego
employees in an appropriate collective bargaining unit, shall be the Atienza and Commissioners Geronimo Q.
exclusive representative of the employees in such unit for the Quadra and Cleto T. Villatuya.
purpose of collective bargaining. In the case at bar, it is the ALU
which is the exclusive bargaining representative of BALMAR
employees and as such it has the right and duty to bargain
collectively with BALMAR.
Without awaiting resolution of its motion to dismiss the Union The consent election, it should be noted, was ordered by CIR
commenced in this Court the present original petition pursuant to the Union's petition for direct certification docketed as
for certiorari on September 18, 1965, claiming that respondent Case 1455-MC and a similar petition for certification filed by SELU
judge acted without or in excess of his jurisdiction in issuing the docketed as Case 1464-MC. Verily, the Union can no longer
injunctive writ "as no restraining order could be validly issued demand collective bargaining. For, it became the minority union.
against the right to picket as part of freedom of speech"; that As matters stand, said right properly belongs to SELU, which
respondent judge issued the questioned writ "without the benefit of commands the majority. By law, the right to be the exclusive
a previous hearing"; that it was issued in violation of Section 9(d) of representative of all the employees in an appropriate collective
Republic Act 875; that jurisdiction over the case rests with the bargaining unit is vested in the labor union "designated or
Court of Industrial Relations (CIR) "for the same involves acts of selected" for such purpose "by the majority of the employees" in
unfair labor practice under Sec. 4(a) of Republic Act 875 in the unit concerned.4 SELU has the right as well as the obligation to
connection with Sec. 5(a) thereof"; and that there is no appeal nor hear, voice out and seek remedies for the grievances of all Sulo
employees, including employees who are members of petitioner
Union, regarding the "rates of pay, wages, hours of employment, or Footnotes
other conditions of employment."
1Civil Case 8524, Court of First Instance of Rizal
Indeed, petitioner Union's concerted activities designed to be (Pasig), entitled "Delta Development Corporation,
recognized as the exclusive bargaining agent of Sulo employees Plaintiff, versus United (Restauror's) Employees and
must come to a halt.5 Collective bargaining cannot be the Labor Union, Defendant."
appropriate objective of petitioning Union's continuation of their
concerted activities. The record before us does not reveal any 2Binalbagan-Isabela Sugar Co., Inc. (BISCOM) vs.
other legitimate purpose. To allow said Union to continue picketing Philippine Association of Free Labor Unions (PAFLU), L-
for the purpose of drawing the employer to the collective 18782, August 29, 1963.
bargaining table would obviously be to disregard the results of the
consent election. To further permit the Union's picketing activities 3December 23, 1965 order of Associate Judge Emiliano
would be to flaunt at the will of the majority.
C. Tabigne in Cases Nos. 1455-MC and 1464-MC,
Annex "A" of Delta's Motion to Dismiss.
The outcome of a consent election cannot be rendered
meaningless by a minority group of employees who had 4 Sec. 12(a), Republic Act 875, as amended.
themselves invoked the procedure to settle the dispute. Those who
voted in the consent election against the labor union that was
eventually certified are hidebound to the results thereof. Logic is
5"A labor union that is not the exclusive representative of
with this view. By their very act of participating in the election, they all the employees therefor, may not picket for closed
are deemed to have acquiesced to whatever is the consequence of shop. And a contract provision for collective bargaining
the election. As to those who did not participate in the election, the governing all employees is valid only when the majority
accepted theory is that they "are presumed to assent to the of the employees have consented to it or have
expressed will of the majority of those voting."6 authorized their agents to consent." Dangel and Shriber
Labor Unions, 1941 ed., p. 90.
Adherence to the methods laid down by statute for the settlement
of industrial strife is one way of achieving industrial peace; one
6Allied Workers' Association vs. Court of Industrial
such method is certification election.7 It is the intent and purpose of Relations, 20 SCRA 364, 367, citing Virginia Ry. Co. vs.
the law that this procedure, when adopted and availed of by parties System Federation No. 40 (1937) 300 U.S. 515, 81 L.
to labor controversies, should end industrial disputes, not continue ed. 789.
them.8 Pertinent is the following observation to which we fully
concur: "Before an election is held by the Board9 to determine 7 See: Sec. 12, Republic Act 875, as amended.
which of two rival unions represents a majority of the employees,
one of the unions may call a strike and demand that the employer 8Floresheim Shoe Store Co. vs. Retail Shoe Salesmen's
bargain with it. A labor dispute will then exist. Nothing in the statute Union, 42 N.E. 2d 480, 484.
makes it illegal for a minority to strike and thereby seek to obtain
sufficient strength so as to become the sole bargaining agent. But 9Referring to the National Labor Relations Board, the
after the Board certifies the bargaining representative, a strike by a American counterpart of our CIR.
minority union to compel an employer to bargain with it is unlawful.
No labor dispute can exist between a minority union and an 10Dangel and Shriber, op. cit., pp. 395-396, citing cases;
employer in such a case."10
emphasis supplied.
Upon the law then, the Union's right to strike and consequently to
picket ceased by its defeat in the consent election. That election
occurred during the pendency before this Court of this original
petition for certiorari lodged by the Union the thrust of which is to
challenge the power of the Court of First Instance to enjoin its
picketing activities. The Union may not continue to picket. The
object of the case before us is lost.
No costs. So ordered.
Finally, on October 13, 1967, the negotiations reached its final The Complaint below alleges, among others, to wit:
stage when the management of respondents Marcelo Rubber and
Latex Products, Inc. and Marcelo Steel Corporation gave the 1. That complainant is a legitimate labor
complainant LAKAS a copy of management's drafts of the organization, with its affiliates, namely: Marcelo
collective bargaining proposals for MFWU and UNWU, Free Workers Union, United Nail Workers
respectively. Union, and Marcelo United Employees Unions,
whose members listed in Annexes "A", "B",
Unexpectedly and without filing a notice of strike, complainant and "C" of this complaint are considered
LAKAS declared another strike against the respondent Marcelo employees of respondent within the meaning
Companies on November 7, 1967, resulting in the complete of the Act;
paralyzation of the business of said respondents. Because of this
second strike, conciliation conferences were again set by the 2. ...
Conciliation Service Division of the Department of Labor on
November 8, November 23, and December 4, 1967. On the last
xxx xxx xxx
aforementioned date, however, neither complainant LAKAS nor the
local unions appeared.
xxx xxx xxx
Instead, on December 13, 1967, Prudencio Jalandoni of
complainant LAKAS, in behalf of the striking unions, coursed a 3. That individual complaints listed in Annexes
letter (Exhibit "B") to Jose P. Marcelo of management advising "A", "B", and "C" of this complaint are members
that, "on Monday, December 18, 1967, at 7:00 o'clock in the of the Marcelo United Employees and Workers
morning, all your striking workers and employees will return to Association, Marcelo Free Workers Union, and
work under the same terms and conditions of employment before United Nail Workers Union, respectively; that
the strike." The letter was attested to by Cornelio Dizon for MFWU, the members of the Marcelo United Employees
Jose Roque for UNWU and Augusto Carreon for MUEWA. On and Workers Union are workers of respondent
December 15,1967, the Bureau of Labor Relations was informed Marcelo Tire and Rubber Corporation; that the
by the complainant LAKAS who requested for the Bureau's members of the Marcelo Free Workers Union
representative to witness the return of the strikers to their jobs. compose the workers of the Marcelo Rubber
and Latex Products, Polaris Marketing
Corporation, and the members of the United
The records reveal that in the meantime, prior to December 13,
Nail Workers Union compose the workers of
1967, some of the strikers started going back to work and were
the Marcelo Steel Corporation (Nail Plant);
admitted; and that as early as December 4, 1967, the management
started posting notices at the gates of the respective premises of
the respondents for strikers to return back to work, Similar notices 4. That each of the aforesaid local unions,
were also posted on December 18 and December 27, 1967. before their affiliation with the complainant
union LAKAS, had a collective bargaining
agreement with respondents; that after the
Upon their return, the reporting strikers were requested to fill up a
expiration of the collective bargaining
certain form (Exhibit "49") wherein they were to indicate the date of
agreement above-mentioned and after the
their availability for work in order that they may be scheduled.
above-mentioned local unions affiliated with
According to the respondent Marcelo Companies, this requirement
the complainant LAKAS, the said federation
was asked of the strikers for legitimate business reasons within
sent to respondents' president, Jose P.
Marcelo, on May 23, 1967, a letter, requesting in violation of the above-mentioned Return-to-
for a negotiation for collective bargaining, Work agreement and refusal of respondents to
together with union proposals thereof, but bargain in good faith with complainant, the
respondents refused; latter, together with the members of the three
local unions above-mentioned, again staged a
5. That after respondents knew of the affiliation strike on November 7, 1967;
of the aforementioned local unions with the
LAKAS, the said respondents, thru their 10. That on December 13, 1967, complainant
officers and agents began harassing the union sent a letter to respondents that the members
members, discriminated against them by of the striking unions abovementioned offered
transferring some of its officers and members to return to work on December 18, 1967
from one section to another in such a way that without any condition, but respondents likewise
their work was reduced to manual labor, and refused, and still continue to refuse to reinstate
by suspending them without justifiable cause. them up to the present;
in spite of long years of service with said
respondents; 11. That here to attached are the list of names
of the members of the three local unions
6. That as a result of the abovementioned above-mentioned who were not admitted back
unfair labor practice of respondents, and after to work by respondents, marked as Annexes
complainant sent communication thereto, "A ", "B ", and "C and made as an integral part
protesting against the acts of the above- of this complaint;
mentioned, complainant decided to stage a
strike on September 4, 1967, after filing a 12. That the union members listed in Annexes
notice of strike with the Department of Labor; "A", "B", and "C" hereof were not able to
secure substantial employment in spite of
7. That on September 14, 1967, however, Jose diligent efforts exerted by them;
P. Marcelo, and Jose A. Delfin, president and
vice-president of the respondents, respectively, 13. That the above unfair labor practice acts of
on one hand and the presidents of the three respondents are in violation of Section 4,
local unions above-mentioned and the national subsections 1, 4 and 6 in relation to Sections
president of complainant union on the other, 13, 14 and 15 of Republic Act No. 875.
entered into a Return-to-Work Agreement.
providing among others, as follows:
The complaint prayed "that after due hearing, judgment be
rendered, declaring respondents guilty of unfair labor practice, and
4. The management
agrees to accept all
(a) Ordering respondents to cease and desist
employees who struck
from further committing the acts complained of;
without discrimination or
harassment consistent with
an orderly operation of its (b) Ordering respondents to comply with the
various plants provided it is Return-to-Work agreement dated September
understood that 14, 1967, and to admit back to work the
management has not workers listed in annexes "A", "B " and "C"
waived and shall continue hereof, with back wages, without loss of
to exercise freely its rights seniority rights and privileges thereof;
and prerogatives to punish,
discipline and dismiss its (c) Ordering respondents to bargain in good
employees in accordance faith with complainant union; and
with law and existing rules
and regulations and that (d) Granting complainant and its complaining
cases filed in Court will be members thereof such other affirmative reliefs
allowed to take their and remedies equitable and proper, in order to
normal course. effectuate the policies of the Industrial Peace
Act.
8. That, contrary to the above Return-to-Work
agreement, and in violation thereof, On March 16, 1968, after an Urgent Motion for Extension of Time
respondents refused to admit the members of to File Answer, the respondents filed their Answer denying the
the three striking local unions; that in admitting material allegations of the Complaint and alleging as affirmative
union members back to work, they were defenses,
screened in spite of their long employment with
respondent, but respondents gave preference I. That the Collective Bargaining Agreement
to the casual employees; between respondent Marcelo Steel
Corporation and the United Nail Workers Union
9. That, because of the refusal of the expired on March 15, 1967; The Collective
respondents to accept some union members, Bargaining Agreement between the United
Rubber Workers Union (which eventually VIII. That on November 28, 1967, respondent
became the Marcelo Free Workers Union) and obtained an injunction from the Court of First
the respondent Marcelo Rubber and Latex Instance of Rizal, Caloocan City Branch,
Products, Inc., expired on June 5, 1967; the against the illegal picketing of the local unions;
Collective Bargaining Agreement between in the first week of December, 1967, the
Marcelo Camelback Tire and Foam Union and striking workers began returning to work; on
the Marcelo Tire and Rubber Corporation December 13, 1967, a letter was received from
expired on June 5, 1967; complainant advising respondents that its
striking workers were calling off, lifting the
II. That on May 23, 1967, one Mr. Prudencio picket line and returning to work, that from the
Jalandoni of complainant addressed a first week of December, 1967, respondents
communication to Mr. Jose P. Marcelo of invited the striking workers desiring to return to
respondents informing him of the alleged work to fill out an information sheet stating
affiliation of the Marcelo United Labor Union therein their readiness to work and the exact
with complainant and submitting a set of dates they were available so that proper
collective bargaining proposal to which counsel scheduling could be done; a number of
for respondents replied suggesting that a workers showed no interest in reporting to
petition for certification election be filed with work; management posted in the Checkpoint,
the Court of Industrial Relations in view of the Bulletin Boards, and the gates notices calling
several demands for representation all workers to return to work but a number of
recognition; workers obviously were not interested in
returning anymore;
III. That the transfers of workers from one job
to another were made in accordance with IX. That respondents posted several times lists
needs of the service. Respondents afforded of names of workers who had not returned to
union officers and members affected by the work with the invitation to return to work, but
transfers the privilege to watch out for they did not return to work;
vacancies and select positions they prefer to
be in. No suspensions without justifiable cause X. That a number of workers in the list
were made as alleged in the Complaint; Annexes "A", "B" and "C" have resigned after
they found more profitable employment
IV. That between May 23, 1967, the date of elsewhere;
their first demand for negotiations, and
September 4, 1967, the start of the first strike, XI. That the local unions referred to in the
proposals and counter-proposals were had. Complaint if they ever had affiliated with
Respondents are not aware of whether or not a complainant union had subsequently
notice of strike was filed with the Court of disaffiliated therefrom;
Industrial Relations;
XII. That the strikes called and declared by the
V. That Mr. Jose P. Marcelo is the President of striking unions were illegal;
Marcelo Rubber and Latex Products, Inc.,
Marcelo Tire and Rubber Corporation, and XIII. That the local unions were bargaining in
Marcelo Steel Corporation, while Mr. Jose A. bad faith with respondents,
Delfin is the acting Personnel Manager of
respondent Marcelo Rubber and Latex
and praying for the dismissal of the Complaint as well as for the
Products, Inc., Marcelo Tire and Rubber
declaration of illegality of the two (2) strikes called by the striking
Corporation, Marcelo Steel Corporation and
unions.
Marcelo Chemical and Pigment Corporation;
Thereafter, the trial commenced. Then on October 24, 1968, a
VI. That respondents did not refuse to admit
development occurred which gave a peculiar aspect to the case at
members of the striking union. Only four (4)
bar. A Manifestation and Motion signed by the respective officers
workers who had criminal cases filed against
and members of the MUEWA, headed by Paulino Lazaro, was filed
them voluntarily failed to report to the
by the said union, alleging, to wit,
Personnel Department for administrative
investigation;
l. That the above-entitled case purportedly
shows that the Marcelo United Employees and
VII. That after September 14, 1967, all workers
Workers Association is one of the
of the different respondent corporations
Complainants being represented by the
returned to work except the four mentioned in
Petitioner Lakas ng Manggagawang
the preceding paragraph hereof who have
Makabayan (LMM);
pending criminal cases; between September
14, 1967, and November 7, 1967 another
strike was declared without justifiable cause; 2. That it likewise appears in the above-entitled
case that the services of the herein Petitioner
was sought by a certain Augusto Carreon
together with his cohorts who are not members
of the Marcelo United Employees and Workers Union do hereby disauthorize the Petitioner of
Association much less connected with the the above-entitled case (Re:: Lakas ng
Marcelo Tire and Rubber Corporation wherein Manggagawang Makabayan) from further
the Marcelo United Employees and Workers representing the United Nail Workers Union in
Association has an existing Collective the above-entitled case;
Bargaining Agreement;
5. That in view further of the fact that the filing
3. That to set the records of this Honorable of the above-entitled case was made over and
Court straight, the undersigned officers and above the objections of the Officers and
members of the Marcelo United Employees members of the United Nail Workers Union,
and Workers Association respectfully manliest the latter therefore manifest their intention to
that the aforesaid organization has no cease and desist as they hereby ceased and
complaint whatsoever against any of the desisted from further prosecuting the above-
Marcelo Enterprises; entitled case in the interest of a harmonius
labor-management relation within the Marcelo
4. ... Enterprises;
1. That the above-entitled case purportedly 2. That the alleged officers and members who
shows that the United Nail Workers Union is signed the three (3) Manifestations and
being represented by the Petitioner Lakas ng Motions are the very employees who were
Manggagawang Makabayan for the alleged accepted back to work by the respondents
reason that the former is one of the affiliates of during the strike by the complainants on
the latter; September 4, 1967 and November 7, 1967,
and the said alleged officers and members
who signed the said manifestations and
2. That on January 15, 1968, all the Officers
motions are still working up to the present in
and members of the United Nail Workers
the establishments of the respondents.
Union disaffiliated from the herein Petitioning
labor organization for the reason that
Petitioning labor organization could not serve 3. That precisely because of the acceptance
the best interest of the Officers and members back to work of these alleged officers and
of the United Nail Workers Union and as such members of the union-movants, and the
is a stumbling block to a harmonious labor- refusal of respondents to accept back to work
management relations within all the Marcelo all the individual complainants in this case
enterprises; ... mentioned in Annexes "A", "B" and "C" of the
instant complaint, inspite of the offer to return
to work by the complainants herein made to
3. That the filing of the above-entitled case by
the respondents without any conditions at the
the herein Petitioning labor organization was
time of the strike, as per complainants' letter of
made over and above the objections of the
December 13, 1967 (Exh. "B", for the
officers and members of the United Nail
complainants), which fact precisely gave rise to
Workers Union;
the filing of this case.
4. That in view of all the foregoing, the Officers
xxx xxx xxx
and members of the United Nail Workers
On January 31, 1969, after the submission of their respective or documents as may be necessary to
Memoranda on the motions asking for the dismissal and compute the back wages due the individual
withdrawal of the complaint, the Court of Industrial Relations complainant in line with this Decision, and to
issued an Order deferring the resolution of the Motions until after submit his Report thereon not later than twenty
the trial on the merits. To this Order, two separate Motions for (20) days after completion of such examination
Reconsideration were filed by the respondent companies and the for further disposition of the Court.
movant-unions, which motions were, however, denied by the
court en banc by its Resolution dated March 5, 1969. SO ORDERED.
After the trial on the merits of the case, and after submission by the On August 9, 1973, counsel for respondent Marcelo Companies
parties of their respective memoranda, the respondent court filed a Motion for Reconsideration of the above Decision assigning
rendered on July 20, 1973 the Decision subject of these petitions. as errors, to wit,
On the motions for dismissal or withdrawal of the complaint as
prayed for by MUEWA, UNWU and MFWU, the respondent court
I. The trial court erred in not finding that
denied the same on the ground that the instant case was filed by
complainant Lakas ng Manggagawang
the Lakas ng Manggagawang Makabayan for and in behalf of the
Makabayan (Lakas) has no authority to file
individual employees concerned and not for the movants who were
and/or to prosecute the Complaint against
not authorized by said individual complainants to ask for the
respondents in representation of the local
dismissal. On the merits of the case, while the Decision contained
unions and/or individual complainants and/or
opinions to the effect that the respondent Marcelo Companies
members of local unions in their individual
were not remiss in their obligation to bargain, and that the
capacities and in not dismissing the complaint
September 4, 1967 strike as well as the November 7, 1967 strike,
on that ground upon motions of the local
were economic strikes, and were, therefore, illegal because of lack
unions concerned and/or their members.
of the required notices of strike before the strikes were declared in
both instances, the Decision, nevertheless, on the opinion that the
"procedure of scheduling adopted by the respondents was in effect II. The trial court erred in finding that
a screening of those who were to be readmitted," declared respondent discriminated against individual
respondent Marcelo Companies guilty of unfair labor practice in complainants who were not readmitted to work
discriminating against the employees named in Annexes "A", "B", after the November 7, 1967 strike while others
and "C" by refusing to admit them back to work other strikers were were able to return to their former employment
admitted back to work after the strike of November 7, 1967. The and in holding that the procedure adopted by
dispositive portion of the appealed Decision states, to wit, respondents was in effect a screening of those
who were readmitted and in finding
respondents guilty of unfair labor practice by
WHEREFORE, in view of all the foregoing,
reason thereof. "
respondents should be, as they are hereby,
declared guilty of unfair labor practice only for
the discrimination on terms or conditions of On August 14, 1973, the individual complainants who had earlier
employment as hereinbefore discussed in disauthorized the counsel of record, Atty. Benjamin Pineda, from
connection with the return of the strikers further representing them and from amicably settling their claims,
complainants back to work after the second on their own behalf filed their arguments in support of their Motion
strike, and, therefore, ordered to pay the for Reconsideration, through a newly retained counsel, Atty. Pablo
individual complainants appearing in Annexes B. Castillon. Assigned as errors are, to wit,
"A", "B" and "C" of the Complaint, except
Arlington Glodeviza, Jesus Lim, Wilfredo I. The findings of the trial court excluding some
Jarquio, Leonardo Sakdalan, Jose Roque, of the employees from the aforementioned
Alfredo Cabel, and those still working, were Decision as well as from the benefits resulting
dismissed for cause, whose contracts expired therefrom is not in accordance with law and the
or who had resigned as above indicated, facts.
their back wages from December l8, 1967but
only up to June 29, 1970 when this case was II. The findings of the trial court declaring the
submitted for decision, without reinstatement, strikes of September 4 and November 7, 1967
minus their earnings elsewhere for the same as illegal for being an economic strike is not in
period. accordance with law and the facts adduced in
this case.
As to those who died without having been re-
employed, the back wages shall be from III. The Honorable trial court in ordering the
December 18, 1967 up to the date of their reduction of the back wages, without
demise, as indicated in the body of this reinstatement, appears to have departed from
Decision, but not beyond June 20, 1970, the substantial evidence rule and established
likewise less their earnings elsewhere. jurisprudence.
The Chief Auditing Examiner of this Court, or By Resolution of January 24, 1974, the Court en banc denied the
his duly authorized representative, is hereby two (2) Motions for Reconsideration filed by both the respondent
directed to proceed to the premises of Marcelo Companies and the individual complainants. On February
respondent companies to examine their books, 19, 1974 and on February 20, 1974, both parties filed their
payrolls, vouchers and other pertinent papers respective Notices of Appeals. Hence, these petitions.
In L-38258, the petition filed by complainant Lakas ng III. Respondent court erred in rendering
Manggagawang Makabayan (LAKAS), the following were assigned judgment ordering petitioners herein to pay
as reversible errors, to wit, individual complainants in Case No. 4951-ULP
of respondent court backwages from
I. The respondent court erred in finding the December 18, 1967, to June 29, 1970, minus
strikes of September 4 and November 7, 1967 their earnings elsewhere, except those who
to be economic strikes and declaring the said have resigned, those who have been
strikes illegal for non-compliance with the dismissed for cause, those whose contracts
procedural requirement of Section 14(d) of have expired and those who are already
Republic Act 875, although its illegality was working.
condoned or waived because of the Return-to-
Work agreement on the first strike, and the IV. Respondent court erred in holding that
discriminatory rehiring of the striking petitioners herein have waived their right to
employees after the second strike. declare the strikes of September 4, 1967 and
November 7, 1967, illegal.
II. The respondent court erred in denying
reinstatement to the striking complainants in From the aforecited assignments of errors respectively made in
Case No. 4951-ULP, and limiting the both petitions before Us, We find that there are only two basic
computation of their backwages from issues posed for Our resolution, viz: (1) whether or not the
December 18, 1967 to June 29, 1970 only, complaint filed by LAKAS against the Marcelo Companies can be
despite its findings of unfair labor practice sustained, in view of the alleged fact that its authority to file and
against private respondents herein as a prosecute the same has been squarely raised in issue at the first
consequence of the discriminatory rehiring of instance before the respondent court; and (2) whether or not the
the striking employees after the November 7, Marcelo Companies are guilty of unfair labor practice, for which
1967 strike. they should be made liable for backwages and be obliged to
reinstate the employees appearing in Annexes "A", "B", and "C " of
III. The respondent court erred in excluding the the complaint, taking into consideration the prayer of LAKAS anent
other individual complainants, except those the correct payment of said backwages and the non-exclusion of
who are still working, those who resigned on or some employees from the benefits arising from the appealed
before December 18, 1967, and those whose Decision.
employment contract expired, and denying to
these individual complainants the benefits The first issue poses a procedural question which We shall dwell
resulting therefrom. on after a resolution of the second issue, this latter issue being of
greater significance to the correct determination of the rights- of all
On the other hand, in L-38260 which is the petition filed by parties concerned as it treats of the merits of the present petitions.
respondents Marcelo Enterprises, Marcelo Tire and Rubber
Corporation, Marcelo Rubber & Latex Products, Marcelo Steel Hence, anent the second issue of whether or not the complaint for
Corporation, Marcelo Chemical & Pigment Corporation, and unfair labor practice can be sustained, this Court rules in favor of
Polaris Marketing Corporation, the following is the alleged the respondent Marcelo Companies and consequently, the
assignment of errors, to wit, appealed Decision is reversed. This reversal is inevitable after this
Court has pored through the voluminuous records of the case as
I. Respondent court erred in not finding that well as after applying the established jurisprudence and the law on
respondent Lakas ng Manggagawang the matters raised. We are not unmindful of the plight of the
Makabayan (LAKAS) had no authority to file employees in this case but We consider it oppressive to grant their
and/or to prosecute the complaint against the petition in G.R. No. L38258 for not only is there no evidence which
petitioners herein in representation of the local shows that the respondent Marcelo Companies were seeking for
unions and/or individual complainants and/or an opportunity to discharge these employees for union activities, or
members of local unions in their individual to discriminate against them because of such activities, but there is
capacities and in not dismissing the complaint affirmative evidence to establish the contrary conclusion.
in Case No. 4951-ULP of respondent court on
that ground upon motions of the local unions The present controversy is a three-sided conflict, although focus
concerned and/or their officers and members. has been greatly placed upon an alleged labor dispute between
complainant LAKAS and the respondent Marcelo Companies. It
II. Respondent court erred in finding that would bear emphasizing, however, that what had been patently
petitioners herein discriminated against disregarded by the respondent industrial court and the parties
individual complainants in Case No. 4951-ULP alike, is the fact that LAKAS had never been the bargaining
of respondent court who were not readmitted representative of any and an of the local unions then existing in the
to work after the November 7, 1967 strike, respondent Marcelo Companies.
while others were able to return to their former
employment and in holding that the procedure Contrary to the pretensions of complainant LAKAS, the respondent
adopted by petitioners herein was in effect a Marcelo Companies did not ignore the demand for collective
screening of those who were readmitted and in bargaining contained in its letter of June 20, 1967. Neither did the
finding petitioners herein guilty of unfair labor companies refuse to bargain at all. What it did was to apprise
practice by reasons thereof. LAKAS of the existing conflicting demands for recognition as the
bargaining representative in the appropriate units involved, and
suggested the settlement of the issue by means of the filing of a ... Although an employer has the undoubted
petition for certification election before the Court of Industrial right to bargain with a bargaining agent whose
Relations. This was not only the legally approved procedure but authority has been established, without the
was dictated by the fact that there was indeed a legitimate requirement that the bargaining agent be
representation issue. PSSLU, with whom the existing CBAs were officially certified by the National Labor
entered into, was demanding of respondent companies to Relations Board as such, if the informally
collectively bargain with it; so was Paulino Lazaro of MUEWA, J.C. presented evidence leaves a real doubt as to
Espinas & Associates for MACATIFU and the MFWU, and the the issue, the employer has a right to demand
complainant LAKAS for MULU which we understand is the a certification and to refuse to negotiate until
aggrupation of MACATIFU, MFWU and UNWU. On top of all of such official certification is presented."
these, Jose Roque of UNWU disauthorized the PSSLU from
representing his union; and similarly, Augusta Carreon of The clear facts of the case as hereinbefore restated indusputably
MACATIFU itself informed management as late as July 11, 1967 or show that a legitimate representation issue confronted the
after the demand of LAKAS that no group representing his Union respondent Marcelo Companies. In the face of these facts and in
"is not authorized and should not be entertained. " conformity with the existing jurisprudence.
Indeed, what We said in Philippine Association of Free Labor We hold that there existed no duty to bargain collectively with The
Unions (PAFLU) vs. The Bureau of Labor Relations,69 SCRA 132, complainant LAKAS on the part of said companies. And
applies as well to this case. proceeding from this basis, it follows that all acts instigated by
complainant LAKAS such as the filing of the Notice of strike on
..., in a situation like this where the issue of June 13, 1967 (although later withdrawn) and the 'two strikes of
legitimate representation in dispute is viewed September 4, 1967 and November 7, 1967 were calculated ,
for not only by one legitimate labor designed and intended to compel the respondent Marcelo
organization but two or more, there is every Companies to recognize or bargain with it notwithstanding that it
equitable ground warranting the holding of a was an uncertified union, or in the case of respondent Marcelo Tire
certification election. In this way, the issue as and Rubber Corporation, to bargain with it despite the fact that the
to who is really the true bargaining MUEWA of Paulino Lazaro vas already certified as the sole
representative of all the employees may be bargaining agent in said respondent company. These concerted
firmly settled by the simple expedient of an activities executed and carried into effect at the instigation and
election. motivation of LAKAS ire all illegal and violative of the employer's
basic right to bargain collectively only with the representative
The above-cited case gives the reason for the need of determining supported by the majority of its employees in each of the
once and for all the true choice of membership as to who should bargaining units. This Court is not unaware of the present
be their bargaining representative, which is that, "(E)xperience predicament of the employees involved but much as We
teaches us, one of the root causes of labor or industrial disputes is sympathize with those who have been misled and so lost their jobs
the problem arising from a questionable bargaining representative through hasty, ill-advised and precipitate moves, We rule that the
entering into CBA concerning terms and conditions of employment. facts neither substantiate nor support the finding that the
" respondent Marcelo Companies are guilty of unfair labor practice.
Respecting the issue of representation and the right of the There are also other facts which this Court cannot ignore. the
employer to demand reasonable proof of majority representation complaint of LAKAS charge that after their first strike of September
on the part of the supposed or putative bargaining agent, the 4, 1967, management and the striking employees entered into a
commentaries in Rothenberg on Labor Relations, pp. 42943 1, are Return-to-Work Agreement but that it was violated by the
forceful and persuasive, thus: respondent companies who "refused to admit the members of the
three striking local unions ... and gave reference to the casual
employees." (No. 8, Complaint). It is also alleged that the strike of
It is essential to the right of a putative
November 7, 1967 was staged "because of the refusal of the
bargaining agent to represent the employees
respondents to accept some union members ... and refusal of
that it be the delegate of a majority of the
respondents to bargain in good faith with complainant" (No. 9,
employees and, conversely, an employer is
Complaint). We find however, that in making these charges,
under duty to bargain collectively only when
complainant LAKAS lacked candor, truth and fidelity towards the
the bargaining agent is representative of the
courts.
majority of the employees. A natural
consequence of these principles is that the
employer has the right to demand of the It is a fact found by the respondent court, and as revealed by he
asserted bargaining agent proof of its records of the case, that the respondent Marcelo Companies did
representation of its employees. Having the not violate the terms of the Return-to-Work Agreement negotiated
right to demonstration of this fact, it is not an after the first strike. All of the strikers were admitted back to work
'unfair labor practice' for an employer to refuse except four (4) who opted not to report for work because of the
to negotiate until the asserted bargaining agent administrative investigation conducted in connection with the acts
has presented reasonable proof of majority of violence perpetrated during the said strike.
representation. It is necessary however, that
such demand be made in good faith and not It is also evident from the records that the charge of bargaining in
merely as a pretext or device for delay or bad faith imputed to the respondent companies, is hardly credible.
evasion. The employer's right is however to In fact, such charge is valid as only against the complainant
reasonable proof. ... LAKAS. The parties had a total of five (5) conferences for
purposes of collective bargaining. It is worth considering that the It is true that upon their return, the strikers were required to fill up a
first strike of September 4, 1967 was staged less than a week after form (Exhibit "49") wherein they were to indicate the date of their
the fourth CBA conference and without any benefit of any previous availability for work. But We are more impressed and are
strike notice. In this connection, it must be stated that the notice of persuaded to accept as true the contention of the respondent
strike filed on June 13, 1967 could not have been the strike notice Marcelo Companies that the aforestated requirement was only for
for the first strike because it was already withdrawn on July 14, purposes of proper scheduling of the start of work for each
1967. Thus, from these stated facts can be seen that the first strike returning striker. It must be noted that as a consequence of the two
was held while the parties were in the process of negotiating. Nor strikes which were both attended by widespread acts of violence
can it be sustained that the respondent Marcelo Companies and vandalism, the businesses of the respondent companies were
bargained in bad faith since there were proposals offered by them, completely paralyzed. It would hardly be justiciable to demand of
but the complainant LAKAS stood pat on its position that all of their the respondent companies to readmit all the returning workers in
economic demands should be met and that all of these demands one big force or as each demanded readmission. There were
should be granted in all of the respondent Marcelo Companies. machines that were not in operating condition because of long
The companies' refusal to accede to the demands of LAKAS disuse during the strikes. Some of the machines needed more than
appears to be justified since there is no showing that these one worker to operate them so that in the absence of the needed
companies were in the same state of financial and economic team of workers, the start of work by one without his teammates
affairs. There is reason to believe that the first strike was staged would necessarily be useless, and the company would be paying
only for the purpose of compelling the respondent Marcelo for his time spent doing no work. Finally, We take judicial
Companies to accede to the inflexible demands of the complainant cognizance of the fact that companies whose businesses were
LAKAS. The records further establish that after the resumption of completely paralyzed by major strikes cannot resume operations at
normal operations following the first strike and the consequent once and in the same state or force as before the strikes.
Return-to-Work Agreement, the striking unions led by complainant
LAKAS and the management of the respondent Marcelo But what strikes Us most in lending credence to respondents'
Companies resumed their bargaining negotiations. And that on allegation that Exhibit "49" was not meant to screen the strikers, is
October 13, 1967, complainant LAKAS sent the final drafts of the the fact that an of the returning strikers who filled up the form were
collective bargaining proposals for MFWU and UNWU. The second scheduled for work and consequently started with their jobs. It is
strike of November 7, 1967 was then staged immediately after only those strikers who refused or failed to fill-up the required form,
which strike, as before, was again lacking of a strike notice. All of like the herein complaining employees, who were not scheduled
these facts show that it was complainant LAKAS, and not the for work and consequently have not been re- employed by the
respondent Marcelo Companies, which refused to negotiate in the respondent Marcelo Companies. Even if there was a sincere belief
pending collective bargaining process. AR that the facts show is on their part that the requirement of Exhibit "49" was a ruse at
that the bargaining position of complainant LAKAS was inflexible "screening" them, this fear would have been dispelled upon notice
and that it was in line with this uncompromising attitude that the of the fact that each and all of their co-strikers who rued up the
strikes were declared, significantly after notice that management required form were in fact scheduled for work and started to work.
did not or could not meet all of their 17-points demand. The stoppage of their work was not, therefore, the direct
consequence of the respondent companies' complained act,
Respondent court, upholding the contention of petitioner LAKAS Hence, their economic loss should not be shifted to the employer. 2
that after the second strike, the respondent Marcelo Companies,
despite the strikers' unconditional offer to return to work, refused to It was never the state policy nor Our judicial pronouncement that
readmit them without "screening" which LAKAS insists to be the employees' right to self-organization and to engage in
"discriminatory hiring of the striking employees, " declared that concerted activities for mutual aid and protection, are absolute or
although the two strikes were illegal, being economic strikes held be upheld under an circumstances. Thus, in the case of Royal
in violation of the strike notice requirement, nevertheless held the Interocean Lines, et al. vs. CIR, 3 We cited these authorities giving
Marcelo Companies guilty of unfair labor practice in discriminating adequate panoply to the rights of employer, to wit:
against the complaining employees by refusing to readmit them
while other strikers were admitted back to work. We do not agree.
The protection of workers' right to self-
organization in no way interfere with
It is the settled jurisprudence that it is an unfair labor practice for employer's freedom to enforce such rules and
an employer not to reinstate, or refuse re-employment of members orders as are necessary to proper conduct of
of union who abandon their strike and make unconditional offer to his businesses, so long as employer's
return to work. 1 As indeed Exhibit "B" presents an unconditional supervision is not for the purpose of
offer of the striking employees to return to work under the same intimidating or coercing his employees with
terms and conditions of employment before the strike, the question respect to their self-organization and
then confronting Us is whether or not on the part of the respondent representation. (National Relations Board vs.
companies, there was refusal to reinstate or re-employ the strikers. Hudson Motor Car Co., C.C.A., 1942, 123 F
2d. 528). "
We find as a fact that the respondent Marcelo Companies did not
refuse to reinstate or re-employ the strikers, as a consequence of It is the function of the court to see that the
which We overrule the finding of unfair labor practice against said rights of self-organization and collective
companies based on the erroneous conclusion )f the respondent bargaining guaranteed by the Act are amply
court. It is clear from the records that even before the unconditional secured to the employee, but in its effort to
offer to return to work contained in , Exhibit "B" was made, the prevent the prescribed unfair labor practice,
respondent Marcelo Companies had already posted notices for the the court must be mindful of the welfare of the
strikers to return back to work. honest employer (Martel Mills Corp. vs.
M.L.R.L., C.C.A., 1940,11471 F2d. 264)."
In Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay here. Naturally, there would no longer be any reason or occasion
(PIMA), Eliseo Samson, et al., vs. Ang Tibay, Inc., et al., L-22273, for LAKAS to continue representing them. Notable is the fact that
May 16, 1967, 20 SCRA 45, We held that the exaction, by the the members purportedly represented by LAKAS constitute the
employer, from the strikers returning to work, of a promise not to mere minority of the movant unions, as may be inferred from the
destroy company property and not to commit acts of reprisal allegations of the movant unions as well as the counter-allegations
against union members who did not participate in the strike, cannot of LAKAS filed below. As such, they cannot prevail or dictate upon
be considered an unfair labor practice because it was not intended the will of the greater majority of the unions to which they still
to discourage union membership. It was an act of a self- belong, it appearing that they never disaffiliated from their unions;
preservation designed to insure peace and order in the employer's or stated in another way, they are bound by the action of the
premises. It was also held therein that what the Industrial Peace greater majority.4
Act regards as an unfair labor practice is the discrimination
committed by the employer in regard to tenure of employment for In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union
the purpose of encouraging or discouraging union membership. would go beyond the limits of its legitimate purposes if it is given
the unrestrained liberty to prosecute any case even for employees
In the light of the above ruling and taking the facts and who are not members of any union at all. A suit brought by another
circumstances of the case before Us in relation to the requirement in representation of a real party in interest is defective." Under the
by the respondent companies in the filling up of Exhibit "49", We uncontroverted facts obtaining herein, the aforestated ruling is
hold and rule that the requirement was an act of self-preservation, applicable, the only difference being that, here, a labor federation
designed to effect cost-savings as well as to insure peace and seeks to represent members of a registered local union never
order within their premises. Accordingly, the petition in G. R. No. L- affiliated with it and members of registered local unions which, in
38258 should be dismissed, it having failed to prove, substantiate the course of the proceedings before the industrial court,
and justify the unfair labor practice charges against the respondent disaffiliated from it.
Marcelo Companies.
This is not to say that the complaining employees were without any
Now to the procedural question posed in the first issue brought venue for redress. Under the aforestated considerations, the
about by the respondent court's denial of the motions to withdraw respondent court should have directed the amendment of the
the complaint respectively filed by MUEWA, UNWU and MFWU. In complaint by dropping LAKAS as the complainant and allowing the
their petition (G.R. L-38260) the respondent Marcelo Companies suit to be further prosecuted in the individual names of those who
maintain that the respondent court erred in not dismissing the had grievances. A class suit under Rule 3, Section 12 of the Rules
complaint even as it knew fully well that the very authority of of Court is authorized and should suffice for the purpose.
LAKAS to represent the labor unions who had precisely
disaffiliated from the LAKAS, was open to serious question and In fairness to the complaining employees, however, We treated
was being ventilated before it. On the other hand, the respondent their Motion for Reconsideration of the Decision subject of appeal
court rationalized the denial of the aforestated motions to withdraw as curing the defect of the complaint as the said motion expressly
by holding that the complaint was filed by LAKAS on behalf of the manifested their collective desire to pursue the complaint for and in
individual employees whose names were attached to the complaint their own behalves and disauthorizing LAKAS' counsel from further
and hence, that the local unions who were not so authorized by representing them. And We have also treated their petition before
these individual employees, cannot withdraw the said complaint. Us in the same manner, disregarding the fact that LAKAS
The lower court's opinion is erroneous. remained the petitioning party, as it appears from the verification
that the petition in L38258 was for and in behalf of the complaining
Firstly, LAKAS cannot bring any action for and in behalf of the employees. The merits of their petition, however, fall short of
employees who were members of MUEWA because, as intimated substantiating the charge of unfair labor practice against the
earlier in this Decision, the said local union was never an affiliate of respondent Marcelo Companies. On the other hand, the appeal of
LAKAS. What appears clearly from the records is that it was the Marcelo Companies in L-38260 must be upheld and sustained.
Augusto Carreon and his followers who joined LAKAS, but then
Augusto Carreon was not the recognized president of MUEWA and WHEREFORE, upon the foregoing considerations, the petition in
neither he nor his followers can claim any legitimate representation L-38258 is dismissed and the petition in L-38260 is granted. The
of MUEWA. Apparently, it is this split faction of MUEWA, headed decision of the Court of Industrial Relations is hereby REVERSED
by Augusta Carreon, who is being sought to be represented by and SET ASIDE and a new judgment is rendered holding that the
LAKAS. However, it cannot do so because the members respondent Marcelo Companies are not guilty of unfair labor
constituting this split faction of MUEWA were still members of practice.
MUEWA which was on its own right a duly registered labor union.
Hence, any suit to be brought for and in behalf of them can be
No costs.
made only by MUEWA, and not LAKAS. It appearing then that
Augusta Carreon and his cohorts did not disaffiliate from MUEWA
nor signed any individual affiliation with LAKAS, LAKAS bears no SO ORDERED.
legal interest in representing MUEWA or any of its members.
Makasiar (Chairman), Concepcion, Jr., Abad Santos, De Castro
Nor will the lower court's opinion be availing with respect to the and Escolin, JJ., concur.
complaining employees belonging to UNWU and MFWU. Although
it is true, as alleged by LAKAS, that when it filed the charge on Aquino, J., concur in the result.
December 26, 1967, the officers of the movant unions were not yet
then the officers thereof, nevertheless, the moment MFWU and Footnotes
UNWU separated from and disaffiliated with 'LAKAS to again
exercise its rights as independent local unions, registered before
as such, they are no longer affiliates of LAKAS, as what transpired
1 People's Bank & Trust Company Employees
Union, et al., vs. CIR, et al., 69 SCRA 10;
Cromwell Commercial Employees and
Laborers Union (PTUC) vs. CIR, et al.,, 12
SCRA 124.
5 3 SCRA 804.
G.R. No. 58768-70 December 29, 1989 of the emergency allowances expected to be decreed, they
nonetheless invoke the same agreement to support their
LIBERTY FLOUR MILLS EMPLOYEES, ANTONIO EVARISTO contention that their complaint for emergency allowances was
and POLICARPIO BIASCAN, petitioners, invalidly referred to voluntary arbitrator Cabal rather than Froilan
vs. M. Bacungan.
LIBERTY FLOUR MILLS, INC. PHILIPPINE LABOR ALLIANCE
COUNCIL (PLAC) and NATIONAL LABOR RELATIONS We find there was no such violation as the choice of the voluntary
COMMISSION, (NLRC), respondents. arbitrator was not limited to Bacungan although he was probably
the first preference. Moreover, the petitioners are estopped from
Julius A. Magno for petitioners. raising this objection now because they did not seasonably
interpose it and instead willingly submitted to Cabal's jurisdiction
when he undertook to hear their complaint.
De Leon, Diokno & Associates for respondent Liberty Flour Mills,
Inc.
In sustaining Labor Arbiter Lomabao, the NLRC agreed that the
decision of voluntary Arbiter Cabal was final and unappealable
CRUZ, J.:
under Article 262-A of the Labor Code and so could no longer be
reviewed by it. True enough. However, it is equally true that the
In this petition for certiorari, the resolution of the public respondent same decision is not binding on this Court, as we held in Oceanic
dated August 3, 1978, is faulted for: (a) affirming the decision of Bic Division (FFW) v. Romero 8 and reiterated in Mantrade/FMMC
the labor arbiter dismissing the employees' claim for emergency Division Employees and Workers Union v. Bacungan. 9 The rule as
allowance for lack of jurisdiction; and (b) modifying the said announced in these cases is reflected in the following statements:
decision by disallowing the award of back wages to petitioners
Policarpio Biascan and Antonio Evaristo.
In spite of statutory provisions making "final"
the decision of certain administrative agencies,
The basic facts are as follows: we have taken cognizance of petitions
questioning these decisions where want of
On February 6, 1974, respondent Philippine Labor Alliance Council jurisdiction, grave abuse of discretion, violation
(PLAC) and respondent Liberty Flour Mills, Inc. entered into a of due process, denial of substantial justice, or
three-year collective bargaining agreement effective January 1, erroneous interpretation of the law were
1974, providing for a daily wage increase of P2.00 for 1974, Pl.00 brought to our attention.
for 1975 and another Pl.00 for 1976. The agreement contained a
compliance clause, which will be explained later in this opinion. xxx xxx xxx
Additionally, the parties agreed to establish a union shop by
imposing "membership in good standing for the duration of the
A voluntary arbitrator by the nature of her
CBA as a condition for continued employment" of workers. 1
functions acts in a quasi-judicial capacity.
There is no reason why her decisions involving
On October 18, 1974, PLAC filed a complaint against the interpretation of law should be beyond this
respondent company for non-payment of the emergency cost of Court's review. Administrative officials are
living allowance under P.D. No. 525. 2 A similar complaint was filed presumed to act in accordance with law and
on March 4, 1975, this time by the petitioners, who apparently yet we do not hesitate to pass upon their work
were already veering away from PLAC. 3 where a question of law is involved or where a
showing of abuse of authority or discretion in
On March 20, 1975, petitioners Evaristo and Biascan, after their official acts is properly raised in petitions
organizing a union caged the Federation of National Democratic for certiorari.
Labor Unions, filed with the Bureau of Labor Relations a petition
for certification election among the rank-and-file employees of the Accordingly, the validity of the voluntary arbiter's finding that the
respondent company 4 PLAC then expelled the two for disloyalty emergency allowance sought by the petitioners are already
and demanded their dismissal by the respondent company, which absorbed in the stipulated wage increases will now be examined
complied on May 20, 1975. 5 by the Court itself.
The objection of Evaristo and Biascan to their termination were The position of the company is that the emergency allowance
certified for compulsory arbitration and assigned to Labor Arbiter required by P.D. No. 525 is already covered by the wage increases
Apolinario N. Lomabao, Jr. Meanwhile, the claims for emergency prescribed in the said CBA. Furthermore, pursuant to its Article
allowance were referred for voluntary arbitration to Edmundo VIII, such allowances also include all other statutory minimum
Cabal, who eventually dismissed the same on the ground that the wage increases that might be decreed during the lifetime of the
allowances were already absorbed by the wage increases. This said agreement.
latter case was ultimately also certified for compulsory arbitration
and consolidated with the termination case being heard by
That agreement provided in Section 2 thereof as follows:
Lomabao. His decision was, on appeal, dealt with by the NLRC as
above stated, 6 and the motion for reconsideration was denied on
August 26, 1981. 7 Section 2. The wage increase in the amounts
and during the period above set forth shall, in
the event of any statutory increase of the
At the outset, we note that the petitioners are taking an ambivalent
minimum wage, either as allowance or as
position concerning the CBA concluded in 1974. While claiming
basic wage, during the life of this Agreement,
that this was entered into in bad faith and to forestall the payment
be considered compliance and payment of
such required statutory increase as far as it will compliance with the scales of allowances recommended by the
go and under no circumstances will it be LOI if the following monthly allowances are given by employers:
cumulative nor duplication to the differential
amount involved consequent to such statutory (a) P50.00 or higher where
wage increase. the authorized capital stock
of the corporation, or the
The Court holds that such allowances are indeed absorbed by the total assets in the case of
wage increases required under the agreement. This is because other undertakings,
Section 6 of the Interpretative Bulletin on LOI No. 174 specifically exceeds P 1 million;
provides:
(b) P 30.00 or higher
Sec. 6. Allowances under LOI. — -All where the authorized
allowances, bonuses, wage adjustments and capital stock of the
other benefits given by employers to their corporation, or the total
employees shall be treated by the Department assets in the case of other
of Labor as in substantial compliance with the undertakings, is not less
minimum standards set forth in LOI No. 174 if: than P100,000.00 but not
more than P1million; and
(a) they conform with at
least the minimum (c) P15.00 or higher where
allowances scales the authorized capital stock
specified in the or total assets, as the case
immediately preceding may be, is less than
Section; and P100,000.00.
(b) they are given in It is not denied that the company falls under paragraph (a), as it
response to the appeal of has a capitalization of more than P l million, 10and so must pay a
the President in his speech minimum allowance of P50.00 a month. This amount is clearly
on 4 January 1974, or to covered by the increases prescribed in the CBA, which required a
countervail the quantum monthly increase (on the basis of 30 days) of P60.00 for 1974, to
jump in the cost of living as be increased by P30.00 in 1975 (to P90.00) and another P 30.00 in
a result of the energy crisis 1976 (to P120.00). The first increase in 1974 was already above
starting in November 1973, the minimum allowance of P50.00, which was exceeded even
or pursuant to Presidential more with the increases of Pl.00 for each of the next two years.
Decree No. 390; Provided,
That the payment is Even if the basis used were 26 days a month (excluding Sundays),
retroactive to 18 February the conclusion would remain unchanged as the raise in wage
1974 or earlier. would be P52.00 for 1974, which amount was increased to P78.00
in 1975 and to P104.00 in 1976.
The allowances and other benefits may be
granted unilaterally by the employer or through But the petitioners contend that the wage increases were the result
collective bargaining, and may be paid at the of negotiation undertaken long before the promulgation of P.D. No.
same time as the regular wages of the 525 and so should not be considered part of the emergency
employees. allowance decreed. In support of this contention, they cite Section
15 of the Rules implementing P.D. No. 525, providing as follows:
Allowances and other benefits which are not
given in substantial compliance with the LOI as Nothing herein shall prevent the employer and
interpreted herein shall not be treated by the his employees, from entering into any
Department of Labor as emergency agreement with terms more favorable to the
allowances in the contemplation of the LOI employees than those provided herein, or be
unless otherwise shown by sufficient proof. construed to sanction the diminution of any
Thus, without such proof, escalation clauses in benefits granted to the employees under
collective bargaining agreements concluded existing laws, agreements, and voluntary
before the appeal of the President providing for practice.
automatic or periodic wage increases shall not
be considered allowances for purposes of the
Obviously, this section should not be read in isolation but must be
LOI. (Emphasis supplied.)
related to the other sections above-quoted, to give effect to the
intent and spirit of the decree. The meaning of the section simply is
The "immediately preceding section" referred to above states: that any benefit over and above the prescribed allowances may
still be agreed upon by the employees and the employer or, if
SEC. 5. Determination of Amount of Allowances. — In determining already granted, may no longer be withdrawn or diminished.
the amount of allowances that should be given by employers to
meet the recommended minimum standards, the LOI has classified The petitioners also maintain that the above-quoted Section 2 of
employers into three general categories. As an implementation CBA is invalid because it constitutes a waiver by the laborers of
policy, the Department of Labor shall consider as sufficient
future benefits that may be granted them by law. They contend this The CBA concluded in 1974 was certifiable and was in fact
cannot be done because it is contrary to public policy. certified on April 11, 1975, It bears stressing that Evaristo and
Biascan were dismissed only on May 20, 1975, more than a month
While the principle is correct, the application is not, for there are no after the said certification.
benefits being waived under the provision. The benefits are
already included in the wage increases. It is the law itself that The correct view is that expressed by Commissioner Cecilio P.
considers these increases, under the conditions prescribed in LOI Seno in his concurring and dissenting opinion, 14viz.:
No. 174, as equivalent to, or in lieu of, the emergency allowance
granted by P.D. No. 525. I cannot however subscribe to the majority
view that the 'dismissal of complainants
In fact, the company agreed to grant the emergency allowance Biascan and Evaristo, ... was, to say the least,
even before the obligation was imposed by the government. What a premature action on the part of the
the petitioners claim they are being made to waive is the additional respondents because at the time they were
P50.00 allowance but the truth is that they are not entitled to this expelled by PLAC the contract containing the
because they are already enjoying the stipulated increases. There union security clause upon which the action
is no waiver of these increases. was based was yet to be certified and the
representation status of the contracting union
Moreover, Section 2 provides that the wage increase shall be was still in question.
considered payment of any statutory increase of the minimum
wage "as far as it will go," which means that any amount not Evidence on record show that after the
covered by such wage increase will have to be made good by the cancellation of the registration certificate of the
company. In short, the difference between the stipulated wage Federation of Democratic Labor Unions, no
increase and the statutory minimum wage will have to be paid by other union contested the exclusive
the company notwithstanding and, indeed, pursuant to the said representation of the Philippine Labor Alliance
article. There is no waiver as to this. Council (PLAC), consequently, there was no
more legal impediment that stood on the way
Curiously, Article 2 was produced verbatim in the collective as to the validity and enforceability of the
bargaining agreement concluded by the petitioners with the provisions of the collective bargaining
company in 1977 after PLAC had been replaced by the new labor agreement entered into by and between
union formed by petitioners Evaristo and Biascan. 11 It is difficult to respondent corporation and respondent union.
understand the petitioners' position when they blow hot and cold The certification of the collective bargaining
like this. agreement by the Bureau of Labor Relations is
not required to put a stamp of validity to such
contract. Once it is duly entered into and
Coming now to the second issue, we find that it must also be
signed by the parties, a collective bargaining
resolved against the petitioners.
agreement becomes effective as between the
parties regardless of whether or not the same
Evaristo and Biascan claim they were illegally dismissed for has been certified by the BLR.
organizing another labor union opposed to PLAC, which they
describe as a company union. Arguing that they were only
To be fair, it must be mentioned that in the certification election
exercising the right to self organization as guaranteed by the
held at the Liberty Flour Mills, Inc. on December 27, 1976, the Ilaw
Constitution, they insist they are entitled to the back wages which
at Buklod ng Manggagawa, with which the union organized by
the NLRC disallowed while affirming their reinstatement.
Biascan and Evaristo was affiliated, won overwhelmingly with 441
votes as against the 5 votes cast for PLAC. 15 However, this does
In its challenged decision, the public respondent held that in not excuse the fact that the two disaffiliated from PLAC as early as
demanding the dismissal of Evaristo and Biascan, PLAC had acted March 1975 and thus rendered themselves subject to dismissal
prematurely because the 1974 CBA providing for union shop and under the union shop clause in the CBA.
pursuant to which the two petitioners were dismissed had not yet
been certified. 12 The implication is that it was not yet in effect and
The petitioners say that the reinstatement issue of Evaristo and
so could not be the basis of the action taken against the two
Biascan has become academic because the former has been
petitioners. This conclusion is erroneous. It disregards the ruling of
readmitted and the latter has chosen to await the resolution of this
this Court in Tanduay Distillery Labor Union v. NLRC, 13 were we
case. However, they still insist on the payment of their back wages
held:
on the ground that their dismissal was illegal. This claim must be
denied for the reasons already given. The union shop clause was
The fact, therefore, that the Bureau of Labor validly enforced against them and justified the termination of their
Relations (BLR) failed to certify or act on services.
TDLU's request for certification of the CBA in
question is of no moment to the resolution of
It is the policy of the State to promote unionism to enable the
the issues presented in this case. The BLR
workers to negotiate with management on the same level and with
itself found in its order of July 8, 1982, that the
more persuasiveness than if they were to individually and
(un)certified CBA was duly filed and submitted
independently bargain for the improvement of their respective
on October 29, 1980, to last until June 30,
conditions. To this end, the Constitution guarantees to them the
1982 is certifiable for having complied with all
rights "to self-organization, collective bargaining and negotiations
the requirements for certification. (Emphasis
and peaceful concerted actions including the right to strike in
supplied.)
accordance with law." There is no question that these purposes
could be thwarted if every worker were to choose to go his own
separate way instead of joining his co-employees in planning
collective action and presenting a united front when they sit down
to bargain with their employers. It is for this reason that the law has
sanctioned stipulations for the union shop and the closed shop as
a means of encouraging the workers to join and support the labor
union of their own choice as their representative in the negotiation
of their demands and the protection of their interest vis-a-vis the
employer.
The Court would have preferred to resolve this case in favor of the
petitioners, but the law and the facts are against them. For all the
concern of the State, for the well-being of the worker, we must at
all times conform to the requirements of the law as long as such
law has not been shown to be violative of the Constitution. No such
violation has been shown here.
DECISION On June 18, 1996, the union finally struck. On July 2, 1996, public
KAPUNAN, J.: respondent the Secretary of Labor and Employment assumed
jurisdiction and ordered all striking employees including the union
president to return to work and for petitioner to accept them back
This is a petition for review on certiorari seeking the reversal
under the same terms and conditions before the actual strike.
of the Decision of the Court of Appeals, promulgated on 9 August
Petitioner readmitted the striking members except Ambas. The
1999, dismissing the petition filed by Colegio de San Juan de
parties then submitted their pleadings including their position
Letran (hereinafter, "petitioner") and affirming the Order of the
papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).
Secretary of Labor, dated December 2, 1996, finding the petitioner
guilty of unfair labor practice on two (2) counts.
On December 2, 1996, public respondent issued an order
The facts, as found by the Secretary of Labor and affirmed declaring petitioner guilty of unfair labor practice on two counts and
by the Court of Appeals, are as follows: directing the reinstatement of private respondent Ambas with
backwages. Petitioner filed a motion for reconsideration which was
"On December 1992, Salvador Abtria, then President of denied in an Order dated May 29, 1997 (Petition, pp. 8-9)."[1]
respondent union, Association of Employees and Faculty of Letran,
initiated the renegotiation of its Collective Bargaining Agreement Having been denied its motion for reconsideration, petitioner
with petitionerColegio de San Juan de Letran for the last two (2) sought a review of the order of the Secretary of Labor and
years of the CBA's five (5) year lifetime from 1989-1994. On the Employment before the Court of Appeals. The appellate court
same year, the union elected a new set of officers wherein private dismissed the petition and affirmed the findings of the Secretary of
respondent Eleanor Ambas emerged as the newly elected Labor and Employment. The dispositive portion of the decision of
President (Secretary of Labor and Employment's Order dated the Court of Appeals sets forth:
December 2, 1996, p. 12).
WHEREFORE, foregoing premises considered, this Petition is
Ambas wanted to continue the renegotiation of the CBA but DISMISSED, for being without merit in fact and in law.
petitioner, through Fr. Edwin Lao, claimed that the CBA was
already prepared for signing by the parties. The parties submitted With cost to petitioner.
the disputed CBA to a referendum by the union members, who
eventually rejected the said CBA (Ibid, p. 2).
SO ORDERED.[2]
SECTION 1. This Agreement which shall be binding upon the As prayed for, the Secretary of Labor assumed jurisdiction
parties hereto and their respective successors-in-interest, shall over the labor dispute on November 10, 1992.[4] Several
become effective and shall remain in force and effect until June 30, conciliation meetings were held but still no agreement/settlement
1992. was arrived at by both parties.
After the parties submitted their respective position papers,
SEC. 2. In accordance with Article 253-A of the Labor Code as the Secretary of Labor issued the assailed Order on February 15,
amended, the term of this Agreement insofar as the representation 1993 directing, among others, that the renegotiated terms of the
aspect is concerned, shall be for five (5) years from July 1, CBA shall be effective for the period of three (3) years from June
1989 to June 30, 1994. Hence, the freedom period for purposes of 30, 1992; and that such CBA shall cover only the employees of
such representation shall be sixty (60) days prior to June 30, 1994. SMC and not of Magnolia and SMFI.
Dissatisfied, petitioner-union now comes to this Court
SEC. 3. Sixty (60) days prior to June 30, 1992 either party may
questioning this Order of the Secretary of Labor.
initiate negotiations of all provisions of this Agreement, except
insofar as the representation aspect is concerned. If no agreement Subsequently, on March 30, 1995,[5] petitioner-union filed a
is reached in such negotiations, this Agreement shall nevertheless Motion for Issuance of a Temporary Restraining Order or Writ of
remain in force up to the time a subsequent agreement is reached Preliminary Injunction to enjoin the holding of the certification
by the parties.[1] elections in the different companies, maintaining that the
employees of Magnolia and SMFI fall within the bargaining unit of
In keeping with their vision and long term strategy for SMC.
business expansion, SMC management informed its employees in
On March 29, 1995, the Court issued a resolution granting
a letter dated August 13, 1991[2]that the company which was
the temporary restraining order prayed for.[6]
composed of four operating divisions namely: (1) Beer, (2)
Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri- Meanwhile, an urgent motion for leave to intervene[7]in the
business would undergo a restructuring.[3] case was filed by the Samahan ng Malayang Manggagawa-San
Miguel Corporation-Federation of Free Workers (SMM-SMC-FFW)
Effective October 1, 1991, Magnolia and Feeds and
through its authorized representiative, Elmer S. Armando, alleging
Livestock Division were spun-off and became two separate and
that it is one of the contending parties adversely effected by the
distinct corporations: Magnolia Corporation (Magnolia) and San
temporary restraining order.
Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA
remained in force and effect. The Intervenor cited the case of Daniel S.L. Borbon v. Hon.
Bienvenido B. Laguesma,[8] G.R. No. 101766, March 5, 1993,
After June 30, 1992, the CBA was renegotiated in
where the Court recognized the separation of the employees of
accordance with the terms of the CBA and Article 253-A of the
Magnolia from the SMC bargaining unit. It then prayed for the
Labor Code. Negotiations started sometime in July, 1992 with the
lifting of the temporary restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU- insofar as the representation aspect is concerned, but is quite
PTGWO, filed a petition for the withdrawal/dismissal of the petition ambiguous with the terms of the other provisions of the CBA. It is
considering that the temporary restraining order jeopardized the a cardinal principle of statutory construction that the Court must
employees‘ right to conclude a new CBA. At the same time, he ascertain the legislative intent for the purpose of giving effect to
challenged the legal personality of Mr. Raymundo Hipolito, Jr. to any statute. The history of the times and state of the things
represent the Union as its president when the latter was already existing when the act was framed or adopted must be followed and
officially dismissed from the company on October 4, 1994. the conditions of the things at the time of the enactment of the law
should be considered to determine the legislative intent. [11] We look
Amidst all these pleadings, the following primordial issues into the discussions leading to the passage of the law:
arise:
THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar
1) Whether or not the duration of the renegotiated as the economic provisions are concerned . . .
terms of the CBA is to be effective for three years
or for only two years; and THE CHAIRMAN (SEN. HERRERA): Maximum of three
years?
2) Whether or not the bargaining unit of SMC includes
also the employees of Magnolia and SMFI. THE CHAIRMAN (SEN. VELOSO): Maximum of three
years.
Petitioner-union contends that the duration for the non-
representation provisions of the CBA should be coterminous with THE CHAIRMAN (SEN. HERRERA): Present practice?
the term of the bargaining agency which in effect shall be for the
remaining two years of the current CBA, citing a previous decision THE CHAIRMAN (REP. VELOSO): In other words, after
of the Secretary of Labor on December 14, 1992 in the matter of three years puwede nang magnegotiate in that CBA for
the labor dispute at Philippine Refining Company.[9] the remaining two years.
However, the Secretary of Labor, in her questioned Order THE CHAIRMAN (REP. HERRERA): You can negotiate for
of February 15, 1993 ruled that the renegotiated terms of the CBA one year, two years or three years but assuming three
at SMC should run for a period of three (3) years. years which, I think, that‘s the likelihood. . . .
We agree with the Secretary of Labor. THE CHAIRMAN (REP. VELOSO): Yes.
Pertinent to the first issue is Art. 253-A of the Labor Code as THE CHAIRMAN (SEN. HERRERA): Three years, the new
amended which reads: union, assuming there will be a change of agent, at
least he has one year to administer and to adjust, to
develop rapport with the management. Yan ang
ART. 253-A. Terms of a Collective Bargaining Agreement. — Any importante.
Collective Bargaining Agreement that the parties may enter into
shall, insofar as the representation aspect is concerned, be for a You know, for us na nagne-negotiate, and hazard
term of five (5) years. No petition questioning the majority status of talaga sa negotiation, when we negotiate with
the incumbent bargaining agent shall be entertained and no somebody na hindi natin kilala, then, we are governed
certification election shall be conducted by the Department of by our biases na ito ay destroyer ng Labor; ang mga
Labor and Employment outside of the sixty-day period immediately employer, ito bayaran ko lang ito okay na.
before the date of expiry of such five year term of the Collective
Bargaining Agreement. All other provisions of the Collective ‗Yan ang nangyayari, but let us give that allowance for
Bargaining Agreement shall be renegotiated not later than three (3) one year to let them know.
years after its execution. Any agreement on such other provisions Actually, ang thrust natin ay industrial peace, and there
of the Collective Bargaining Agreement entered into within six (6) can be no industrial peace if you encourage union to
months from the date of expiry of the term of such other provisions fight each other. ‗Yan ang problema.‘[12]
as fixed in such Collective Bargaining Agreement, shall retroact to
the day immediately following such date. If any such agreement is xxx xxx xxx
entered into beyond six months, the parties shall agree on the
HON. ISIDRO: Madali iyan, kasi these two periods that are
duration of retroactivity thereof. In case of a deadlock in the
mentioned in the CBA seem to provide some doubts
renegotiation of the collective bargaining agreement, the parties
later on in the implementation. Sabi kasi rito, insofar
may exercise their rights under this Code. (underlining supplied.)
as representation issue is concerned, seven years ang
lifetime . . .
Article 253-A is a new provision. This was incorporated by
Section 21 of Republic Act No. 6715 (the Herrera-Veloso Law) HON. CHAIRMAN HERRERA: Five years.
which took effect on March 21, 1989. This new provision states
that the CBA has a term of five (5) years instead of three years, HON. ISIDRO: Five years, all the others three years.
before the amendment of the law as far as the representation HON. CHAIRMAN HERRERA: No. Ang three years duon sa
aspect is concerned. All other provisions of the CBA shall be terms and conditions, not later than three years.
negotiated not later than three (3) years after its execution. The
―representation aspect‖ refers to the identity and majority status of HON. ISIDRO: Not later than three years, so within three
the union that negotiated the CBA as the exclusive bargaining years you have to make a new CBA.
representative of the appropriate bargaining unit concerned. ―All
HON. CHAIRMAN HERRERA: Yes.
other provisions‖ simply refers to the rest of the CBA, economic as
well as non-economic provisions, except representation.[10] HON. ISIDRO: That is again for purposes of renewing the
terms, three years na naman iyan — then, seven years
As the Secretary of Labor herself observed in the instant
...
case, the law is clear and definite on the duration of the CBA
HON. CHAIRMAN HERRERA: Not later than three years. ang representation. Iyon and nangyari. That is where
you have the gulo. Ganoon and nangyari. So, ang
HON. ISIDRO: Assuming that they usually follow the period nangyari diyan, pag-mayroon certification election,
— three years nang three years, but under this law expire ang contract, ano ang usual issue - company
with respect to representation — five years, union. I can you (sic) give you more what the
ano? Now, after three years, nagkaroon ng bagong incumbent union is giving. So ang mangyayari diyan,
terms, tapos na iyong term, renewed na iyong terms, pag-negotiate mo hardline na agad.
ang karapatan noon sa representation issue mayroon
pang two years left. HON. CHAIRMAN VELOSO: Mon, for four years?
HON. CHAIRMAN HERRERA: One year na lang because HON. ISIDRO: Ang tingin ko lang dito, iyong distinction
six years nang lahat, three plus three. between the terms and the representation aspect —
why do we have to distinguish between three and
HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three five? What‘s wrong with having a uniform expiration
years pa lang ang natatapos. So, another CBA was period?
formed and this CBA mayroon na naman siyang
bagong five years with respect to representation issue. HON. CHAIRMAN HERRERA: Five years.
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito HON. ISIDRO: Puro three years.
iyan. Iyong terms and conditions for three years.
HON. CHAIRMAN HERRERA: That is what we are trying to
HON. ISIDRO: Yes. avoid because ang reality diyan, Mart, pagpasok mo
sa kumpanya, mag-ne-negotiate ka ng six months,
HON. CHAIRMAN HERRERA: On the third year you can that‘s the average, aabot pa minsan ng one year.
start negotiating to change the terms and conditions. Pagkatapos ng negotiation mo, signing kayo. There
HON. ISIDRO: Yes. will be an allowed period of one year. Third year na,
uumpisahan naman ang organizations, papasok na
HON. CHAIRMAN HERRERA: Assuming you will follow the ang ibang unyon because the reality in Trade Union
practice . . . committee, they organize, we organize. So, actually,
you have only industrial peace for one year, effective
HON. ISIDRO: Oo.
industrial peace. That is what we are trying to
HON. CHAIRMAN HERRERA: But on the fifth year, ang change. Otherwise, we will continue to discourage the
representation status now can be questioned, so baka investors and the union will never grow because every
puwedeng magkaroon ng certification election. If the other year it has to use its money for the certification
incumbent union loses, then the new union administers election. Ang grabe pang practice diyan, mag-a-
the contract for one year to give him time to know his advance ang federation for three years union dues
counterpart — the employer, before he can negotiate para panggastos lang sa certification election. That is
for a new term. Iyan ang advantage. what we are trying to avoid.
HON. ISIDRO: Kasi, when the CBA has only a three-year HON. JABAR: Although there are unions which really get
lifetime with respect to the terms and conditions and advances.
then, so you have to renew that in three years — you
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga
renew for another three years, mayroon na naman
unyon, ganoon ang mangyayari. And I think our
another five years iyong ano . . .
responsibility here is to create a legal framework to
HON. ANIAG: Hindi, ang natitira duon sa representation two promote industrial peace and to develop responsible
years na lang. and fair labor movement.
HON. CHAIRMAN HERRERA: Two years na lang sa HON. CHAIRMAN VELOSO: In other words, the longer the
representation. period of the effectivity . . .
HON. ANIAG: So that if they changed the union, iyong last xxx
year. . . .
HON. CHAIRMAN VELOSO. (continuing) . . in other words,
HON. CHAIRMAN HERRERA: Iyon lang, that you have to the longer the period of effectivity of the CBA, the
administer the contract. Then, voluntary arbitration na better for industrial peace.
kayo and then mayroon ka nang probisyon ―retroact on
HON. CHAIRMAN HERRERA: representation status.
the date of the expiry date‖. Pagnatalo and incumbent
unyon, mag-aassume and new union, administer the HON. CHAIRMAN VELOSO: Only on —
contract. As far as the term ang condition, for one year,
and that will give him time and the employer to know HON. CHAIRMAN HERRERA: — the representations.
each other. HON. CHAIRMAN VELOSO: But on the economic issues.
HON. JABAR: Boy, let us be realistic. I think if a new union HON. CHAIRMAN HERRERA: You have to review
wins a certification election, it would not want to that. The parties will have to review that.
administer a CBA which has not been negotiated by
the union itself. HON. CHAIRMAN VELOSO: At least on second year.
HON. CHAIRMAN HERRERA: That is not true, Hon. This is HON. CHAIRMAN HERRERA: Not later than 3 years ang
true because what is happening now in the country is karamihan ng mga, mag-negotiate when the company
that the term ng contract natin, duon din mage-expire is — (interrupted)[13]
xxx and all of them agreed on a 3-year cycle. Notably, the following
CBAs were forged incorporating a term of 3-years on the
From the aforesaid discussions, the legislators were more renegotiated provisions, to wit:
inclined to have the period of effectivity for three (3) years insofar
as the economic as well as non-economic provisions are
concerned, except representation. 1. SMC - daily-paid employees union (IBM)
Obviously, the framers of the law wanted to maintain 2. SMF - monthly-paid employees and daily-paid
industrial peace and stability by having both management and employees at the Cabuyao Plant.
labor work harmoniously together without any disturbance. Thus,
no outside union can enter the establishment within five (5) years There is a direct link between the voluntary recognition by the
and challenge the status of the incumbent union as the exclusive company of the continuing representative status of the unions after
bargaining agent. Likewise, the terms and conditions of the aforementioned spin-offs and the stand of the company for a 3-
employment (economic and non-economic) can not be questioned year renegotiated cycle when the economic provisions of the
by the employers or employees during the period of effectivity of existing CBAs expired, i.e., to maintain stability and avoid
the CBA. The CBA is a contract between the parties and the confusion when the umbilical cord of the two divisions were
parties must respect the terms and conditions of the severed from their parent. These two cannot be considered
agreement.[14] Notably, the framers of the law did not give a fixed independently of each other for they were intended to reinforce
term as to the effectivity of the terms and conditions of one another. Precisely, the company conceded to face the same
employment. It can be gleaned from their discussions that it was union notwithstanding the spin-offs in order to preserve industrial
left to the parties to fix the period. peace during the infancy of the two corporations. If the union
In the instant case, it is not difficult to determine the period of would insist on a shorter renegotiated term, then all the
effectivity for the non-representation provisions of the CBA. Taking advantages gained by both parties in this regard, would have gone
it from the history of their CBAs, SMC intended to have the terms to naught. With this in mind, this office feels that it will betray its
of the CBA effective for three (3) years reckoned from the mandate should we order the parties to execute a 2-year
expiration of the old or previous CBA which was on June 30, 1989, renegotiated term for then chaos and confusion, rather than
as it provides: tranquility, would be the order of the day. Worse, there is a strong
likelihood that such a ruling might spawn discontent and possible
mass actions against the company coming from the other unions
SECTION 1. This Agreement which shall be binding upon the
who had already agreed to a 3-year renegotiated terms. If this
parties hereto and their respective successors-in-interest, shall
happens, the purpose of this Office‘s intervention into the parties‘
become effective and shall remain in force and effect until June 30,
controversy would have been defeated.[15]
1992.
The parties‘ respective positions are both well supported In the case of Lopez Sugar Corporation v.
by jurisprudence. For its part, petitioner invokes the Federation of Free Workers, 189 SCRA 179
ruling in Union of Filipro Employees[6], wherein this Court (1991), this Court reiterated the rule that
upheld the NLRC‘s act of giving prospective effect to the although a CBA has expired, it continues to
CBA, and argues that the two-year arbitral award in the have legal effects as between the parties until
case at bar should likewise be applied prospectively, a new CBA has been entered into. It is the duty
counted from December 28, 1996 to December 27, of both parties to the CBA to keep the status
1998. Petitioner maintains that there is nothing in Article quo, and to continue in full force and effect the
253-A of the Labor Code which states that arbitral terms and conditions of the existing agreement
awards or renewals of a collective bargaining agreement during the 60-day freedom period and/or until a
shall always have retroactive effect. The Filipro case was new agreement is reached by the
applied more recently in Pier 8 Arrastre & Stevedoring parties (National Congress of Unions in the
Services, Inc. v. Roldan-Confesor[7] thus: Sugar Industry of the Philippines v. Ferrer-
Calleja, 205 SCRA 478 [1992]). Applied to the
case at bench, the legal effects of the
immediate past CBA between petitioner and
private respondent terminated, and the of the effectivity of arbitral
effectivity of the new CBA began, only on awards issued by the
March 4, 1993, when public respondent Secretary of Labor
resolved their dispute.[8] pursuant to Article 263(g)
of the Labor Code, such as
On the other hand, respondent MEWA invokes the ruling herein involved, public
in St. Luke’s Medical Center, Inc. v. Torres,[9] which held respondent is deemed
that the Secretary of Labor has plenary and discretionary vested with plenary and
powers to determine the effectivity of arbitral discretionary powers to
awards.[10] Thus, respondent maintains that the arbitral determine the effectivity
award in this case should be made effective from thereof (223 SCRA 779,
December 1, 1995 to November 30, 1997. The ruling in 792-793 [1993]; reiterated
the St. Luke’s case was restated in the 1998 case of in Philippine Airlines, Inc.
Manila Central Line Corporation v. Manila Central Line v. Confessor 231 SCRA 41
Free Workers Union-National Federation of Labor, et [1994]).
al.,[11] where it was held that:
Indeed, petitioner has not shown that the
Art. 253-A refers to collective bargaining question of effectivity was not included in the
agreements entered into by the parties as a general agreement of the parties to submit
result of their mutual agreement. The CBA in their dispute for arbitration. To the contrary, as
this case, on the other hand, is part of an the order of the labor arbiter states, this
arbitral award. As such, it may be made question was among those submitted for
retroactive to the date of expiration of the arbitration by the parties:
previous agreement. As held in St. Luke’s
Medical Center, Inc. v. Torres: As regards the "Effectivity
and Duration" clause, the
Finally, the effectivity of the company proposes that the
Order of January 28, 1991, collective bargaining
must retroact to the date of agreement shall take effect
the expiration of the only upon its signing and
previous CBA, contrary to shall remain in full force
the position of petitioner. and effect for a period of
Under the circumstances five years. The union
of the case, Article 253-A proposes that the
cannot be properly applied agreement shall take effect
to herein case. As correctly retroactive to March 15,
stated by public 1989, the expiration date of
respondent in his assailed the old CBA.
Order of April 12, 1991
dismissing petitioner‘s And after an evaluation of
Motion for Reconsideration the parties‘ respective
– contention and argument
thereof, it is believed that
Anent the that of the union is fair and
alleged lack of reasonable. It is the
basis for the observation of this
retroactivity Arbitrator that in almost
provisions subsequent CBAs, the
awarded, we effectivity of the
would stress that renegotiated CBA, usually
the provision of and most often is made
law invoked by effective retroactive to the
the Hospital, date when the immediately
Article 253-A of preceding CBA expires so
the Labor Code, as to give a semblance of
speaks of continuity. Hence, for this
agreements by particular case, it is
and between the believed that there is
parties, and not nothing wrong adopting the
arbitral awards . . stand of the union, that is
. (p. 818 Rollo). that this CBA be made
retroactive effective March
15, 1989.[12]
Therefore, in the absence
of a specific provision of
law prohibiting retroactivity Parenthetically, the Decision rendered in the case at bar
on January 27, 1999[13] ordered that the CBA should be
effective for a term of two years counted from December WHEREFORE, the Motion for Partial Modification is
28, 1996 (the date of the Secretary of Labor‘s disputed GRANTED. The Resolution of February 22, 2000 is
Order on the parties‘ motion for reconsideration) up to PARTIALLY MODIFIED as follows: (a) the arbitral award
December 27, 1998.[14] That is to say, the arbitral award shall retroact to the two-year period from June 1, 1996 to
was given prospective effect. May 31, 1998; (b) the increased wage award of Two
Thousand Pesos (P2,000.00) shall be paid to the rank-
Upon a reconsideration of the Decision, this Court issued and-file employees during the said two-year period. This
the assailed Resolution which ruled that where an Resolution is subject to the monetary advances granted
arbitral award granted beyond six months after the by petitioner to said employees during the pendency of
expiration of the existing CBA, and there is no this case, assuming such advances had actually been
agreement between the parties as to the date of distributed to them.
effectivity thereof, the arbitral award shall retroact to the
first day after the six-month period following the SO ORDERED.
expiration of the last day of the CBA. In the dispositive
portion, however, the period to which the award shall Davide, Jr., C.J., (Chairman), Melo,
retroact was inadvertently stated as beginning on Kapunan, and Pardo, JJ., concur.
December 1, 1995 up to November 30, 1997.
Vacation Leave - MEWA‘s demand for upgrading denied & the g. Death benefit for retiree‘s beneficiaries is denied.
company‘s present policy is maintained which must be
incorporated into the new CBA but scheduled vacation leave may
Optional retirement - union‘s demand is denied; present policy is
be rounded off to one full day at a time in case of a benefit
maintained; employee is eligible for optional retirement if he has
involving a fraction of a day.
rendered at least 18 years of service.
Anniversary Bonus - union‘s demand is denied. Employee‘s Cooperative- a loan of P3 M seed money is granted to
the proposed establishment of a cooperative, payable in twenty
Christmas Gift Certificate - company has the discretion as to (20) years starting one year from the start of operations.
whether it will give it to its employees.
Holdup Allowance- the union demand is denied; the present policy
Retirement Benefits: shall be maintained.
17) Contracting Out - The Company has the prerogative to 6) . . . in decreeing that the union be allowed to have
contract out services provided that this move is based on valid representation in policy and decision making into matters affecting
business reasons in accordance with law, is made in good faith, is ―personnel welfare, rights and benefits as well as duties;‖
reasonably exercised and, provided further that if the contracting
out involves more than six months, the Union must be consulted 7) . . . in ruling for the inclusion of all terms and conditions of
before its implementation. employment in the collective bargaining agreement;
18) Check off of union dues 8) . . . in exercising discretion in determining the retroactivity of the
CBA;
In any increase of union dues or contributions for mandatory
activities, the union must submit to the Company a copy of its Both MEWA and the Solicitor General; on behalf of the
board resolution increasing the union dues or authorizing such Secretary of Labor, filed their comments to the petition. While the
contributions; case was also set for oral argument on Feb 10, 1997, this hearing
was cancelled due to MERALCO not having received the comment
If a board resolution is submitted, the Company shall deduct union of the opposing parties. The parties were instead required to
dues from all union members after a majority of the union submit written memoranda, which they did. Subsequently, both
members have submitted their individual written petitioner and private respondent MEWA also filed replies to the
authorizations. Only those check-off authorizations submitted by opposing parties‘ Memoranda, all of which We took into account in
the union shall be honored by the Company. the resolution of this case.
The union disputes the allegation of MERALCO that the
With respect to special assessments, attorney‘s fees, negotiation Secretary abused his discretion in issuing the assailed orders
fees or any other extraordinary fees, individual authorizations shall arguing that he acted within the scope of the powers granted him
be necessary before the company may so deduct the same. by law and by the Constitution. The union contends that any
judicial review is limited to an examination of the Secretary‘s
19) Union Representation in Committees - The union is granted decision-making/discretion - exercising process to determine if this
representation in the Safety Committee, the Uniform Committee process was attended by some capricious or whimsical act that
and other committees of a similar nature and purpose involving constitutes ―grave abuse‖; in the absence of such abuse, his
personnel welfare, rights and benefits as well as duties. findings - considering that he has both jurisdiction and expertise to
make them - are valid.
Dissatisfied, petitioner filed this petition contending that the
Secretary of Labor gravely abused his discretion: The union‘s position is anchored on two premises:
First, no reviewable abuse of discretion could have attended
1). . . in awarding wage increases of P2,200.00 for 1996 the Secretary‘s arbitral award because the Secretary complied with
and P2,200.00 for 1997; constitutional norms in rendering the dispute award. The union
posits that the yardstick for comparison and for the determination
2) . . . in awarding the following economic benefits: of the validity of the Secretary‘s actions should be the specific
standards laid down by the Constitution itself. To the union, these
standards include the State policy on the promotion of workers‘
a. Two months Christmas bonus;
welfare,[9] the principle of distributive justice,[10] the right of the
b. Rice Subsidy and retirement benefits for
State to regulate the use of property,[11] the obligation of the State
retirees;
to protect workers, both organized and unorganized, and insure
c. Loan for the employees‘ cooperative;
their enjoyment of ―humane conditions of work‖ and a ―living questions is that the resolution of the constitutional question must
wage,‖ and the right of labor to a just share in the fruits of be necessary in deciding the case.[15]
production.[12]
In this case we believe that the more appropriate and
Second, no reversible abuse of discretion attended the available standard - and one does not require a constitutional
Secretary‘s decision because the Secretary took all the relevant interpretation - is simply the standard of reasonableness. In
evidence into account, judiciously weighed them, and rendered a layman‘s terms, reasonableness implies the absence of
decision based on the facts and law. Also, the arbitral award arbitrariness;[16] in legal parlance, this translates into the exercise
should not be reversed given the Secretary‘s expertise in his field of proper discretion and to the observance of due process. Thus,
and the general rule that findings of fact based on such expertise is the question we have to answer in deciding this case is whether
generally binding on this Court. the Secretary‘s actions have been reasonable in light of the parties
positions and the evidence they presented.
To put matters in proper perspective, we go back to basic
principles. The Secretary of Labor‘s statutory power under Art. MEWA‘s second premise - i.e., that the Secretary duly
263 (g) of the Labor Code to assume jurisdiction over a labor considered the evidence presented - is the main issue that we
dispute in an industry indispensable to the national interest, and, to shall discuss at length below. Additionally, MEWA implied that we
render an award on compulsory arbitration, does not exempt the should take great care before reading an abuse of discretion on
exercise of this power from the judicial review that Sec. 1, Art. 8 of the part of the Secretary because of his expertise on labor issues
the Constitution mandates. This constitutional provision states: and because his findings of fact deserve the highest respect from
this Court.
―Judicial power includes the duty of the courts of justice to settle This Court has recognized the Secretary of Labor‘s distinct
actual controversies involving rights which are legally demandable expertise in the study and settlement of labor disputes falling under
and enforceable, and to determine whether or not there has been a his power of compulsory arbitration.[17] It is also well-settled that
grave abuse of discretion amounting to lack or excess of factual findings of labor administrative officials, if supported by
jurisdiction on the part of any branch or instrumentality of the substantial evidence, are entitled not only to great respect but even
government.‖ to finality.[18] We, therefore, have no difficulty in accepting the
union‘s caveat on how to handle a Secretary of Labor‘s arbitral
Under this constitutional mandate, every legal power of the award.
Secretary of Labor under the Labor Code, or, for that matter, any
act of the Executive, that is attended by grave abuse of discretion But at the same time, we also recognize the possibility that
is subject to review by this Court in an appropriate proceeding. To abuse of discretion may attend the exercise of the Secretary‘s
be sure, the existence of an executive power alone - whether arbitral functions; his findings in an arbitration case are usually
granted by statute or by the Constitution - cannot exempt the based on position papers and their supporting documents (as they
executive action from judicial oversight, interference or reversal are in the present case), and not on the thorough examination of
when grave abuse of discretion is, or is alleged to be, the parties‘ contending claims that may be present in a court trial
present. This is particularly true when constitutional norms are and in the face-to-face adversarial process that better insures the
cited as the applicable yardsticks since this Court is the final proper presentation and appreciation of evidence.[19] There may
interpreter of the meaning and intent of the Constitution.[13] also be grave abuse of discretion where the board, tribunal or
officer exercising judicial function fails to consider evidence
The extent of judicial review over the Secretary of Labor‘s adduced by the parties.[20] Given the parties‘ positions on the
arbitral award is not limited to a determination of grave abuse in justiciability of the issues before us, the question we have to
the manner of the secretary‘s exercise of his statutory answer is one that goes into the substance of the Secretary‘s
powers. This Court is entitled to, and must - in the exercise of its disputed orders: Did the Secretary properly consider and
judicial power - review the substance of the Secretary‘s award appreciate the evidence presented before him?
when grave abuse of discretion is alleged to exist in the award, i.e.,
in the appreciation of and the conclusions the Secretary drew from We find, based on our consideration of the parties‘ positions
the evidence presented. and the evidence on record, that the Secretary of Labor
disregarded and misappreciated evidence, particularly with respect
The natural and ever present limitation on the Secretary‘s to the wage award. The Secretary of Labor apparently also acted
acts is, of course, the Constitution. And we recognize that indeed arbitrarily and even whimsically in considering a number of legal
the constitutional provisions the union cited are State policies on points; even the Solicitor General himself considered that the
labor and social justice that can serve as standards in assessing Secretary gravely abused his discretion on at least three major
the validity of a Secretary of Labor‘s actions. However, we note points: (a) on the signing bonus issue; (b) on the inclusion of
that these provisions do not provide clear, precise and objective confidential employees in the rank and file bargaining unit, and (c)
standards of conduct that lend themselves to easy application. We in mandating a union security ―closed-shop‖ regime in the
likewise recognize that the Constitution is not a lopsided document bargaining unit.
that only recognizes the interests of the working man; it too
protects the interests of the property owner and employer as We begin with a discussion on the wages issue. The focal
well.[14] point in the consideration of the wage award is the projected net
income for 1996 which became the basis for the 1996 wage award,
For these reasons - and more importantly because a ruling which in turn - by extrapolation - became the basis for the
on the breadth and scope of the suggested constitutional (2nd Year) 1997 award. MERALCO projected that the net
yardsticks is not absolutely necessary in the disposition of this operating income for 1996 was 14.7% above the 1999 level or a
case - we shall not use these yardsticks in accordance with the total net operating income of 4.171 Billion, while the union placed
time-honored practice of avoiding constitutional interpretations the 1996 net operating income at 5.795 Billion.
when a decision can be reached using non-constitutional
standards. We have repeatedly held that one of the essential MERALCO based its projection on the increase of the
requisites for a successful judicial inquiry into constitutional income for the first 6 months of 1996 over the same period in
1995. The union, on the other hand, projected that the 1996 claimed that its cited figure is based on MERALCO‘s 10-year
income would increase by 29% to 35% because the ―consumption income stream,[25] no data or computation of this 10-year stream
of electric power is at its highest during the last two quarters with appear in the record.
the advent of the Yuletide season.‖ The union likewise relied
heavily on a newspaper report citing an estimate by an all Asia While the Secretary is not expected to accept the company-
capital financial analyst that the net operating income would offered figures wholesale in determining a wage award, we find it a
amount to 5.795 Billion.[21] grave abuse of discretion to completely disregard data that is
based on actual and undisputed record of financial performance in
Based essentially on these considerations, the Secretary favor of the third-hand and unfounded claims the Secretary
made the following computations and ordered his disputed wage eventually relied upon. At the very least, the Secretary should
award: have properly justified his disregard of the company figures. The
Secretary should have also reasonably insured that the figure that
Projected net operating served as the starting point for his computation had some
Income for substantial basis.
1996 5,795,000,000
Both parties extensely discussed the factors that the decision
Principals and maker should consider in making a wage award. While We do not
interests 1,426,571,703 seek to enumerate in this decision the factors that should affect
Dividends at 1995 wage determination, we must emphasize that a collective
rate 1,636,949,000 bargaining dispute such as this one requires due consideration
and proper balancing of the interests of the parties to the
Net amount left with the dispute and of those who might be affected by the dispute. To
Company 2,729,479,297 our mind, the best way in approaching this task holistically is to
consider the available objective facts, including, where applicable,
Add: Tax credit equivalent to 35% of labor
factors such as the bargaining history of the company, the trends
cost 231,804,940
and amounts of arbitrated and agreed wage awards and the
Company‘s net operating company‘s previous CBAs, and industry trends in general. As a
income 2,961,284,237 rule, affordability or capacity to pay should be taken into account
but cannot be the sole yardstick in determining the wage award,
―For 1997, the projected income is P7,613,612 which can easily especially in a public utility like MERALCO. In considering a public
absorb the incremental increase of P2,200 per month or a total utility, the decision maker must always take into account the
of P4,500 during the last year of the CBA period. ―public interest‖ aspects of the case; MERALCO‘s income and the
amount of money available for operating expenses - including
labor costs - are subject to State regulation. We must also keep in
xxx xxx xxx mind that high operating costs will certainly and eventually be
passed on to the consuming public as MERALCO has bluntly
―An overriding aim is to estimate the amount that is left with the warned in its pleadings.
Company after the awarded wages and benefits and the
company‘s customary obligations are paid. This amount can be We take note of the ―middle ground‖ approach employed by
the source of an item not found in the above computations but the Secretary in this case which we do not necessarily find to be
which the Company must provide for, that is - the amount the the best method of resolving a wage dispute. Merely finding the
company can use for expansion. midway point between the demands of the company and the union,
and ―splitting the difference‖ is a simplistic solution that fails to
―Considering the expansion plans stated in the Company‘s recognize that the parties may already be at the limits of the wage
Supplement that calls for capital expenditures of 6 billion, 6.263 levels they can afford. It may lead to the danger too that neither of
billion and 5.802 billion for 1996, 1997 and 1998 respectively, We the parties will engage in principled bargaining; the company may
conclude that our original award of P2,300 per month for the first keep its position artificially low while the union presents an
year and P2,200 for the second year will still leave much by way of artificially high position, on the fear that a ―Solomonic‖ solution
retained income that can be used for expansion.‖[22] (Underscoring cannot be avoided. Thus, rather than encourage agreement, a
ours.) ―middle ground approach‖ instead promotes a ―play safe‖ attitude
that leads to more deadlocks than to successfully negotiated
CBAs.
We find after considering the records that the Secretary
gravely abused his discretion in making this wage award because After considering the various factors the parties cited, we
he disregarded evidence on record. Where he considered believe that the interests of both labor and management are best
MERALCO‘s evidence at all, he apparently misappreciated this served by a wage increase of P1,900.00 per month for the first
evidence in favor of claims that do not have evidentiary year and anotherP1,900.00 per month for the second year of the
support. To our mind, the MERALCO projection had every reason two-year CBA term. Our reason for this is that these increases
to be reliable because it was based on actual and undisputed sufficiently protects the interest of the worker as they are roughly
figures for the first six months of 1996.[23] On the other hand, the 15% of the monthly average salary of P11,600.00.[26] They likewise
union projection was based on a speculation of Yuletide sufficiently consider the employer‘s costs and its overall wage
consumption that the union failed to substantiate. In fact, as structure, while at the same time, being within the range that will
against the union‘s unsubstantiated Yuletide consumption claim, not disrupt the wage trends in Philippine industries.
MERALCO adduced evidence in the form of historical consumption
data showing that a lengthy consumption does not tend to rise The records shows that MERALCO, throughout its long
during the Christmas period.[24] Additionally, the All-Asia Capital years of existence, was never remiss in its obligation towards its
Report was nothing more than a newspaper report that did not employees. In fact, as a manifestation of its strong commitment to
show any specific breakdown or computations. While the union the promotion of the welfare and well-being of its employees, it has
consistently improved their compensation package. For instance, special bonuses to mark or celebrate ―special occasions,‖ such as
MERALCO has granted salary increases[27] through the collective when the Asia Money Magazine recognized MERALCO as the
bargaining agreement the amount of which since 1980 for both ―best managed company in Asia.‖ These grants were given on or
rank-and-file and supervisory employees were as follows: about Christmas time, and the timing of the grant apparently led
the Secretary to the conclusion that what were given were
AMOUNT OF CBA DIFFERENCE Christmas bonuses given by way of a ―company practice‖ on top of
INCREASES the legally required 13th month pay.
CBACO RAN SUPERVISO AMOU PERCE
VERAGE K- RY NT NT The Secretary in granting the two-month bonus, considered
AND- the following factual finding, to wit:
FILE
1980 230.0 342.50 112.50 48.91% ―We note that each of the grant mentioned in the commonly
0 adopted table of grants has a special description. Christmas
1981 210.0 322.50 112.50 53.57 bonuses were given in 1988 and 1989. However, the amounts of
0 bonuses given differed. In 1988, it was P1,500. In 1989, it was
1982 200.0 312.50 112.50 56.2 ½ month salary. The use of ―Christmas bonus‖ title stopped after
0 5 1989. In 1990, what was given was a ―cash gift‖ of ½ month‘s
TOTAL 640.0 977.50 337.50 52.73 salary. The grants thereafter bore different titles and were for
0 varying amounts. Significantly, the Company explained the reason
1983 320.0 432.50 112.50 35.16 for the 1995 bonuses and this explanation was not substantially
0 contradicted by the Union.
1984 350.0 462.50 112.50 32.14
0 ―What comes out from all these is that while the Company has
1985 370.0 482.50 112.50 30.41 consistently given some amount by way of bonuses since 1988,
0 these awards were not given uniformly as Christmas bonuses or
TOTAL 1,040.0 1,377.50 337.50 32.45 special Christmas grants although they may have been given at or
0 about Christmas time.
1986 860.0 972.50 112.50 13.08
0 ―xxx xxx xxx
1987 640.0 752.50 112.50 17.58
0 ―The Company is not therefore correct in its position that there is
1988 600.0 712.50 112.50 18.75 not established practice of giving Christmas bonuses that has
0 ripened to the status of being a term and condition of
TOTAL 2,100.0 2,437.50 337.50 16.07 employment. Regardless of its nomenclature and purpose, the act
0 of giving this bonus in the spirit of Christmas has ripened into a
1989 1,100.0 1,212.50 112.50 10.23 Company practice.‖[28]
0
1990 1,200.0 1,312.50 112.50 9.38 It is MERALCO‘s position that the Secretary erred when he
0 recognized that there was an ―established practice‖ of giving a two-
1991 1,300.0 1,412.50 112.50 8.65 month Christmas bonus based on the fact that bonuses were given
0 on or about Christmas time. It points out that the ―established
TOTAL 3,600.0 3,937.50 337.50 9.38 practice‖ attributed to MERALCO was neither for a considerable
0 period of time nor identical in either amount or purpose. The
1992 1,400. 1,742.50 342.50 24.46 purpose and title of the grants were never the same except for the
00 Christmas bonuses of 1988 and 1989, and were not in the same
1993 1,350. 1,682.50 332.50 24.63 amounts.
00 We do not agree.
1994 1,150. 1,442.50 292.50 25.43
00 As a rule, a bonus is not a demandable and enforceable
TOTAL 3,900. 4,867.50 967.50 24.81 obligation;[29] it may nevertheless be granted on equitable
00 consideration[30] as when the giving of such bonus has been
the company’s long and regular practice.[31] To be considered a
Based on the above-quoted table, specifically under the ―regular practice,‖ the giving of the bonus should have been done
column ―RANK-AND-FILE,‖ it is easily discernible that the total over a long period of time, and must be shown to have been
wage increase of P3,800.00 for 1996 to 1997 which we are consistent and deliberate.[32] Thus we have ruled in National
granting in the instant case is significantly higher than the total Sugar Refineries Corporation vs. NLRC:[33]
increases given in 1992 to 1994, or a span of three (3) years,
which is only P3,900.00 a month. Thus, the Secretary‘s grant ―The test or rationale of this rule on long practice requires an
of P2,200.00 monthly wage increase in the assailed order is indubitable showing that the employer agreed to continue giving
unreasonably high a burden for MERALCO to shoulder. the benefits knowing fully well that said employees are not covered
We now go to the economic issues. by the law requiring payment thereof.‖
1. CHRISTMAS BONUS In the case at bar, the record shows the MERALCO, aside
MERALCO questions the Secretary‘s award of ―Christmas from complying with the regular 13th month bonus, has further
bonuses‖ on the ground that what it had given its employees were been giving its employees an additional Christmas bonus at the
tail-end of the year since 1988. While the special bonuses differed employers to provide funds, by loan or otherwise, that employees
in amount and bore different titles, it can not be denied that these can use to form a cooperative. The formation of a cooperative is a
were given voluntarily and continuously on or about Christmas purely voluntary act under this law, and no party in any context or
time. The considerable length of time MERALCO has been giving relationship is required by law to set up a cooperative or to provide
the special grants to its employees indicates a unilateral and the funds therefor. In the absence of such legal requirement, the
voluntary act on its part, to continue giving said benefits knowing Secretary has no basis to order the grant of a 1.5 million loan to
that such act was not required by law. MERALCO employees for the formation of a
cooperative. Furthermore, we do not see the formation of an
Indeed, a company practice favorable to the employees has employees cooperative, in the absence of an agreement by the
been established and the payments made by MERALCO pursuant collective bargaining parties that this is a bargainable term or
thereto ripened into benefits enjoyed by the condition of employment, to be a term or condition of employment
employees. Consequently, the giving of the special bonus can no that can be imposed on the parties on compulsory arbitration.
longer be withdrawn by the company as this would amount to a
diminution of the employee‘s existing benefits.[34] 4. GHSIP, HMP BENEFITS FOR DEPENDENTS and
HOUSING EQUITY LOAN
We can not, however, affirm the Secretary‘s award of a two-
month special Christmas bonus to the employees since there was MERALCO contends that it is not bound to bargain on these
no recognized company practice of giving a two-month special benefits because these do not relate to ―wages, hours of work and
grant. The two-month special bonus was given only in 1995 in other terms and conditions of employment‖ hence, the denial of
recognition of the employees‘ prompt and efficient response during these demands cannot result in a bargaining impasse.
the calamities. Instead, a one-month special bonus, We believe, is
sufficient, this being merely a generous act on the part of The GHSIP, HMP benefits for dependents and the housing
MERALCO. equity loan have been the subject of bargaining and arbitral
awards in the past. We do not see any reason why MERALCO
2. RICE SUBSIDY and RETIREMENT BENEFITS for should not now bargain on these benefits. Thus, we agree with the
RETIREES Secretary‘s ruling:
It appears that the Secretary of Labor originally ordered the
increase of the retirement pay, rice subsidy and medical benefits of ―x x x Additionally and more importantly, GHSIP and HMP, aside
MERALCO retirees. This ruling was reconsidered based on the from being contributory plans, have been the subject of previous
position that retirees are no longer employees of the company and rulings from this Office as bargainable matters. At this point, we
therefore are no longer bargaining members who can benefit from cannot do any less and must recognize that GHSIP and HMP are
a compulsory arbitration award. The Secretary, however, ruled matters where the union can demand and negotiate for
that all members of the bargaining unit who retire between August improvements within the framework of the collective bargaining
19, 1996 and November 30, 1997 (i.e., the term of the disputed system.‖[35]
CBA under the Secretary‘s disputed orders) are entitled to receive
an additional rice subsidy. Moreover, MERALCO have long been extending these
benefits to the employees and their dependents that they now
The question squarely brought in this petition is whether the become part of the terms and conditions of employment. In fact,
Secretary can issue an order that binds the retirement fund. The MERALCO even pledged to continue giving these
company alleges that a separate and independent trust fund is the benefits. Hence, these benefits should be incorporated in the new
source of retirement benefits for MERALCO retirees, while the CBA.
union maintains that MERALCO controls these funds and may
therefore be compelled to improve this benefit in an arbitral award. With regard to the increase of the housing equity grant, we
find P60,000.00 reasonable considering the prevailing economic
The issue requires a finding of fact on the legal personality of crisis.
the retirement fund. In the absence of any evidence on record
indicating the nature of the retirement fund‘s legal personality, we 5. SIGNING BONUS
rule that the issue should be remanded to the Secretary for
On the signing bonus issue, we agree with the positions
reception of evidence as whether or not the MERALCO retirement
commonly taken by MERALCO and by the Office of the Solicitor
fund is a separate and independent trust fund. The existence of a
General that the signing bonus is a grant motivated by the goodwill
separate and independent juridical entity which controls an
generated when a CBA is successfully negotiated and signed
irrevocable retirement trust fund means that these retirement funds
between the employer and the union. In the present case, this
are beyond the scope of collective bargaining: they are
goodwill does not exist. In the words of the Solicitor General:
administered by an entity not a party to the collective bargaining
and the funds may not be touched without the trustee‘s conformity.
―When negotiations for the last two years of the 1992-1997 CBA
On the other hand, MERALCO control over these funds broke down and the parties sought the assistance of the NCMB,
means that MERALCO may be compelled in the compulsory but which failed to reconcile their differences, and when petitioner
arbitration of a CBA deadlock where it is the employer, to improve MERALCO bluntly invoked the jurisdiction of the Secretary of
retirement benefits since retirement is a term or condition of Labor in the resolution of the labor dispute, whatever goodwill
employment that is a mandatory subject of bargaining. existed between petitioner MERALCO and respondent union
disappeared. xxx.‖[36]
3. EMPLOYEES’ COOPERATIVE
The Secretary‘s disputed ruling requires MERALCO to In contractual terms, a signing bonus is justified by and is the
provide the employees covered by the bargaining unit with a loan consideration paid for the goodwill that existed in the negotiations
of 1.5 Million as seed money for the employees formation of a that culminated in the signing of a CBA. Without the goodwill, the
cooperative under the Cooperative Law, R.A. 6938. We see payment of a signing bonus cannot be justified and any order for
nothing in this law - whether expressed or implied - that requires such payment, to our mind, constitutes grave abuse of
discretion. This is more so where the signing bonus is in the not the union already enjoys a special union leave with pay for union
insignificant total amount of P16 Million. authorized representatives to attend work education seminars,
meetings, conventions and conferences where union
6. RED-CIRCLE-RATE ALLOWANCE representation is required or necessary, and Paid-Time-off for
An RCR allowance is an amount, not included in the basic union officers, stewards and representatives for purpose of
salary, that is granted by the company to an employee who is handling or processing grievances.
promoted to a higher position grade but whose actual basic salary 9. HIGH VOLTAGE/HIGH POLE/TOWING
at the time of the promotion already exceeds the maximum salary ALLOWANCE
for the position to which he or she is promoted. As an allowance, it
applies only to specifics individuals whose salary levels are unique MERALCO argues that there is no justification for the
with respect to their new and higher positions. It is for these increase of these allowances. The personnel concerned will not
reasons that MERALCO prays that it be allowed to maintain the receive any additional risk during the life of the current CBA that
RCR allowance as a separate benefit and not be integrated in the would justify the increase demanded by the union. In the absence
basic salary. of such risk, then these personnel deserve only the same salary
increase that all other members of the bargaining unit will get as a
The integration of the RCR allowance in the basic salary of result of the disputed CBA. MERALCO likewise assails the grant of
the employees had consistently been raised in the past CBAs the high voltage/high pole allowance to members of the team who
(1989 and 1992) and in those cases, the Secretary decreed the are not exposed to the high voltage/high pole risks. The risks that
integration of the RCR allowance in the basic salary. We do not justify the higher salary and the added allowance are personal to
see any reason why it should not be included in the present those who are exposed to those risks. They are not granted to a
CBA. In fact, in the 1995 CBA between MERALCO and the team because some members of the team are exposed to the
supervisory union (FLAMES), the integration of the RCR allowance given risks.
was recognized. Thus, Sec. 4 of the CBA provides:
The increase in the high-voltage allowance (from P45.00
―All Red-Circle-Rate Allowance as of December 1, 1995 shall be to P55.00), high-pole allowance (from P30.00 to P40.00), and
integrated in the basic salary of the covered employees who as of towing allowance is justified considering the heavy risk the
such date are receiving such allowance. Thereafter, the company employees concerned are exposed to. The high-voltage allowance
rules on RCR allowance shall continue to be observed/applied.‖[37] is granted to an employee who is authorized by the company to
actually perform work on or near energized bare lines and bus,
while the high-pole allowance is given to those authorized to climb
For purposes of uniformity, we affirm the Secretary‘s order
poles on a height of at least 60 feet from the ground to work
on the integration of the RCR allowance in the basic salary of the
thereat. The towing allowance, on the other hand, is granted to the
employees.
stockman drivers who tow trailers with long poles and equipment
7. SICK LEAVE RESERVE OF 15 DAYS on board. Based on the nature of the job of these concerned
employees, it is imperative to give them these additional
MERALCO assails the Secretary‘s reduction of the sick leave allowances for taking additional risks. These increases are not
reserve benefit from 25 days to 15 days, contending that the sick even commensurate to the danger the employees concerned are
leave reserve of 15 days has reached the lowest safe level that subjected to. Besides, no increase has been given by the
should be maintained to give employees sufficient buffer in the company since 1992.[39]
event they fall ill.
We do not, however, subscribe to the Secretary‘s order
We find no compelling reason to deviate from the Secretary‘s granting these allowances to the members of the team who are not
ruling that the sick leave reserve is reduced to 15 days, with any exposed to the given risks. The reason is obvious- no risk, no
excess convertible to cash at the end of the year. The employee pay. To award them the said allowances would be manifestly
has the option to avail of this cash conversion or to accumulate his unfair for the company and even to those who are exposed to the
sick leave credits up to 25 days for conversion to cash at his risks, as well as to the other members of the bargaining unit who
retirement or separation from the service. This arrangement is, in do not receive the said allowances.
fact, beneficial to MERALCO. The latter admits that ―the
diminution of this reserve does not seriously affect MERALCO 10. BENEFITS FOR COLLECTORS
because whatever is in reserve are sick leave credits that are
MERALCO opposes the Secretary‘s grant of benefits for
payable to the employee upon separation from service. In fact, it
collectors on the ground that this is grossly unreasonable both in
may be to MERALCO‘s financial interest to pay these leave credits
scope and on the premise it is founded.
now under present salary levels than pay them at future higher
salary levels.‖[38] We have considered the arguments of the opposing parties
regarding these benefits and find the Secretary‘s ruling on the (a)
8. 40-DAY UNION LEAVE
lunch allowance; (b) disconnection fee for delinquent accounts; (c)
MERALCO objects to the demand increase in union leave voluntary performance of other work at the instance of the
because the union leave granted to the union is already Company; (d) bobcat belt bags; and (e) reduction of quota and
substantial. It argues that the union has not demonstrated any real MAPL during typhoons and other force majeure events,
need for additional union leave. reasonable considering the risks taken by the company personnel
involved, the nature of the employees‘ functions and
The thirty (30) days union leave granted by the Secretary, to responsibilities and the prevailing standard of living. We do not
our mind, constitute sufficient time within which the union can carry however subscribe to the Secretary‘s award on the following:
out its union activities such as but not limited to the election of
union officers, selection or election of appropriate bargaining
(a) Reduction of quota and MAPL when the collector is on
agents, conduct referendum on union matters and other union-
sick leave because the previous CBA has already
related matters in furtherance of union objectives. Furthermore,
provided for a reduction of this demand. There is no Additionally, the Union is demanding that the right of all rank and
need to further reduce this. file employees to join the Union shall be recognized by the
Company. Accordingly, all rank and file employees shall join the
(b) Deposit of cash bond at MESALA because this is no union.
longer necessary in view of the fact that collectors are no
longer required to post a bond. xxx xxx xxx
We shall now resolve the non-economic issues. These demands are fairly reasonable. We grant the same in
accordance with the maintenance of membership principle as a
1. SCOPE OF THE BARGAINING UNIT form of union security."
The Secretary‘s ruling on this issue states that:
The Secretary reconsidered this portion of his original order
―a. Scope of the collective bargaining unit. The union is when he said in his December 28, 1996 order that:
demanding that the collective bargaining unit shall be composed of
all regular rank and file employees hired by the company in all its ―x x x. when we decreed that all rank and file employees shall join
offices and operating centers through its franchise and those it the Union, we were actually decreeing the incorporation of a
may employ by reason of expansion, reorganization or as a result closed shop form of union security in the CBA between the
of operational exigencies. The law is that only managerial parties. In Ferrer v. NLRC, 224 SCRA 410, the Supreme Court
employees are excluded from any collective bargaining unit and ruled that a CBA provision for a closed shop is a valid form of
supervisors are now allowed to form their own union (Art. 254 of union security and is not a restriction on the right or freedom of
the Labor Code as amended by R.A. 6715). We grant the union association guaranteed by the Constitution, citing Lirag v. Blanco,
demand.‖ 109 SCRA 87.‖
Both MERALCO and the Office of the Solicitor General MERALCO objected to this ruling on the grounds that: (a) it
dispute this ruling because if disregards the rule We have was never questioned by the parties; (b) there is no evidence
established on the exclusion of confidential employee from the presented that would justify the restriction on employee's union
rank and file bargaining unit. membership; and (c) the Secretary cannot rule on the union
security demand because this is not a mandatory subject for
In Pier 8 Arrastre vs. Confesor and General Maritime and collective bargaining agreement.
Stevedores Union,[40] we ruled that:
We agree with MERALCO‘s contention.
―Put another way, the confidential employee does not share in the An examination of the records of the case shows that the
same ―community of interest‖ that might otherwise make him union did not ask for a closed shop security regime; the Secretary
eligible to join his rank and file co-workers, precisely because of a in the first instance expressly stated that a maintenance of
conflict in those interests.‖ membership clause should govern; neither MERALCO nor MEWA
raised the issue of union security in their respective motions for
Thus, in Metrolab Industries vs. Roldan-Confesor,[41] We reconsideration of the Secretary‘s first disputed order; and that
ruled: despite the parties clear acceptance of the Secretary‘s first ruling,
the Secretary motu proprio reconsidered his maintenance of
―……..that the Secretary‘s order should exclude the confidential membership ruling in favor of the more stringent union shop
employees from the regular rank and file employees qualified to regime.
become members of the MEWA bargaining unit.‖
Under these circumstances, it is indubitably clear that the
Secretary gravely abused his discretion when he ordered a union
From the foregoing disquisition, it is clear that employees shop in his order of December 28, 1996. The distinctions between
holding a confidential position are prohibited from joining the union a maintenance of membership regime from a closed shop and their
of the rank and file employees. consequences in the relationship between the union and the
2. ISSUE OF UNION SECURITY company are well established and need no further elaboration.
The Secretary in his Order of August 19, 1996,[42] ruled that: Consequently, We rule that the maintenance of membership
regime should govern at MERALCO in accordance with the
Secretary‘s order of August 19, 1996 which neither party disputed.
―b. Union recognition and security. The union is proposing that it
be recognized by the Company as sole and exclusive bargaining 3. THE CONTRACTING OUT ISSUE
representative of the rank and file employees included in the
bargaining unit for the purpose of collective bargaining regarding This issue is limited to the validity of the requirement that the
rates of pay, wages, hours of work and other terms and conditions union be consulted before the implementation of any contracting
of employment. For this reason, the Company shall agree to meet out that would last for 6 months or more. Proceeding from our
only with the Union officers and its authorized representatives on ruling inSan Miguel Employees Union-PTGWO vs
all matters involving the Union as an organization and all issues Bersamina,[43] (where we recognized that contracting out of work
arising from the implementation and interpretation of the new is a proprietary right of the employer in the exercise of an inherent
CBA. Towards this end, the Company shall not entertain any management prerogative) the issue we see is whether the
individual or group of individuals on matters within the exclusive Secretary‘s consultation requirement is reasonable or unduly
domain of the Union. restrictive of the company‘s management prerogative. We note
that the Secretary himself has considered that management should
not be hampered in the operations of its business when he said
that:
‗We feel that the limitations imposed by the union advocates are Uniform Committee and other committees of a similar
too specific and may not be applicable to the situations that the nature. Certainly, such participation by the Union in the said
company and the union may face in the future. To our mind, the committees is not in the nature of a co-management control of the
greater risk with this type of limitation is that it will tend to curtail business of MERALCO. What is granted by the Secretary
rather than allow the business growth that the company and the is participation and representation. Thus, there is no impairment
union must aspire for. Hence, we are for the general limitations we of management prerogatives.
have stated above because they will allow a calibrated response to
specific future situations the company and the union may face.‖[44] 5. INCLUSION OF ALL TERMS AND CONDITIONS
IN THE CBA
Additionally, We recognize that contracting out is not MERALCO also decries the Secretary‘s ruling in both the
unlimited; rather, it is a prerogative that management enjoys assailed Orders that-
subject to well-defined legal limitations. As we have previously
held, the company can determine in its best business judgment ―All other benefits being enjoyed by the company‘s employees but
whether it should contract out the performance of some of its work which are not expressly or impliedly repealed in this new
for as long as the employer is motivated by good faith, and the agreement shall remain subsisting and shall likewise be included in
contracting out must not have been resorted to circumvent the law the new collective bargaining agreement to be signed by the
or must not have been the result of malicious or arbitrary parties effective December 1, 1995.‖[46]
action.[45] The Labor Code and its implementing rules also contain
specific rules governing contracting out (Department of Labor
claiming that the above-quoted ruling intruded into the employer‘s
Order No. 10, May 30, 1997, Sections. 1-25).
freedom to contract by ordering the inclusion in the new CBA all
Given these realities, we recognize that a balance already other benefits presently enjoyed by the employees even if they are
exist in the parties‘ relationship with respect to contracting out; not incorporated in the new CBA. This matter of inclusion,
MERALCO has its legally defined and protected management MERALCO argues, was never discussed and agreed upon in the
prerogatives while workers are guaranteed their own protection negotiations; nor presented as issues before the Secretary; nor
through specific labor provisions and the recognition of limits to the were part of the previous CBA‘s between the parties.
exercise of management prerogatives. From these premises, we
We agree with MERALCO.
can only conclude that the Secretary‘s added requirement only
introduces an imbalance in the parties‘ collective bargaining The Secretary acted in excess of the discretion allowed him
relationship on a matter that the law already sufficiently by law when he ordered the inclusion of benefits, terms and
regulates. Hence, we rule that the Secretary‘s added requirement, conditions that the law and the parties did not intend to be reflected
being unreasonable, restrictive and potentially disruptive should be in their CBA.
struck down.
To avoid the possible problems that the disputed orders may
4. UNION REPRESENTATION IN COMMITTEES bring, we are constrained to rule that only the terms and conditions
already existing in the current CBA and was granted by the
As regards this issue, We quote with approval the holding of
Secretary (subject to the modifications decreed in this decision)
the Secretary in his Order of December 28, 1996, to wit:
should be incorporated in the CBA, and that the Secretary‘s
disputed orders should accordingly be modified.
―We see no convincing reason to modify our original Order on
union representation in committees. It reiterates what the Article 6. RETROACTIVITY OF THE CBA
211 (A)(g) of the Labor Codes provides: ―To ensure the
Finally, MERALCO also assails the Secretary‘s order that the
participation of workers in decision and policy-making processes
effectivity of the new CBA shall retroact to December 1, 1995, the
affecting their rights, duties and welfare. ‗Denying this opportunity
date of the commencement of the last two years of the effectivity of
to the Union is to lay the claim that only management has the
the existing CBA. This retroactive date, MERALCO argues, is
monopoly of ideas that may improve management strategies in
contrary to the ruling of this Court in Pier 8 Arrastre and
enhancing the Company‘s growth. What every company should
Stevedoring Services, Inc. vs. Roldan-Confessor[47] which
remember is that there might be one among the Union members
mandates that the effective date of the new CBA should be the
who may offer productive and viable ideas on expanding the
date the Secretary of Labor has resolved the labor disputes.
Company‘s business horizons. The union‘s participation in such
committees might just be the opportune time for dormant ideas to On the other hand, MEWA supports the ruling of the
come forward. So, the Company must welcome this development Secretary on the theory that he has plenary power and discretion
(see also PAL v. NLRC, et. al., G.R. 85985, August 13, 1995). It to fix the date of effectivity of his arbitral award citing our ruling
must be understood, however, that the committees referred to here in St. Lukes Medical Center, Inc. vs. Torres.[48] MEWA also
are the Safety Committee, the Uniform Committee and other contends that if the arbitral award takes effect on the date of the
committees of a similar nature and purpose involving personnel Secretary Labor‘s ruling on the parties‘ motion for reconsideration
welfare, rights and benefits as well as duties.‖ (i.e., on December 28, 1996), an anomaly situation will result when
CBA would be more than the 5-year term mandated by Article 253-
We do not find merit in MERALCO‘s contention that the A of the Labor Code.
above-quoted ruling of the Secretary is an intrusion into the
However, neither party took into account the factors
management prerogatives of MERALCO. It is worthwhile to note
necessary for a proper resolution of this aspect. Pier 8, for
that all the Union demands and what the Secretary‘s order granted
instance, does not involve a mid-term negotiation similar to this
is that the Union be allowed to participate in policy formulation and
case, while St. Lukes does not take the ―hold over‖ principle into
decision-making process on matters affecting the Union
account, i.e., the rule that although a CBA has expired, it continues
member’s right, duties and welfare as required in Article 211
to have legal effects as between the parties until a new CBA has
(A)(g) of the Labor Code. And this can only be done when the
been entered into.[49]
Union is allowed to have representatives in the Safety Committee,
Article 253-A serves as the guide in determining when the
effectivity of the CBA at bar is to take effect. It provides that the
representation aspect of the CBA is to be for a term of 5 years,
while
As for the term of the CBA, petitioner maintains that Article 253 of
THE PUBLIC RESPONDENT NLRC
the Labor Code refers to the continuation in full force and effect of
COMMITTED GRAVE ABUSE OF
the previous CBA's terms and conditions. By necessity, it could not
DISCRETION IN ALLOWING THE "PETITION
possibly refer to terms and conditions which, as expressly
FOR RELIEF" TO PROSPER.
stipulated, ceased to have force and effect.[14]
II
According to petitioner, the provision on wage increase in the 1981
to 1984 CBA between petitioner Company and NFL provided for
THE PUBLIC RESPONDENT NLRC yearly wage increases. Logically, these provisions ended in the
COMMITTED GRAVE ABUSE OF year 1984 - the last year that the economic provisions of the CBA
DISCRETION IN RULING THAT PRIVATE were, pursuant to contract and law, effective. Petitioner claims that
RESPONDENTS MARIANO AKILIT AND 350 there is no contractual basis for the grant of CBA benefits such as
OTHERS ARE ENTITLED TO BENEFITS wage increases in 1985 and subsequent years, since the CBA
UNDER THE COLLECTIVE BARGAINING stipulates only the increases for the years 1981 to 1984.
AGREEMENT IN SPITE OF THE FACT THAT
THEY WERE NOT EMPLOYED BY THE
Moreover, petitioner alleges that it was through no fault of theirs
PETITIONER MUCH LESS WERE THEY
that no new CBA was entered pending appeal of the decision in
MEMBERS OF THE BARGAINING UNIT
NLRC Case No. RAB-IX-0334-82.
DURING THE TERM OF THE CBA. Misä act
In the case at bar, no new agreement was entered into by and Having established that the CBA between petitioner Company and
between petitioner Company and NFL pending appeal of the NFL remained in full force and effect even beyond the stipulated
decision in NLRC Case No. RAB-IX-0334-82; nor were any of the term, in the absence of a new agreement; and, therefore, that the
economic provisions and/or terms and conditions pertaining to economic provisions such as wage increases continued to have
monetary benefits in the existing agreement modified or altered. legal effect, we are now faced with the question of who are entitled
Therefore, the existing CBA in its entirety, continues to have legal to the benefits provided thereunder.
effect.
Petitioner Company insists that the rank-and-file employees hired
In a recent case, the Court had occassion to rule that Articles 253 after the term of the CBA inspite of their subsequent membership
and 253-A[17] mandate the parties to keep the status quo and to in the bargaining unit, are not parties to the agreement, and
continue in full force and effect the terms and conditions of the certainly may not claim the benefits thereunder.
existing agreement during the 60-day period prior to the expiration
of the old CBA and/or until a new agreement is reached by the We do not agree. In a long line of cases, this Court has held that
parties. Consequently, the automatic renewal clause provided for when a collective bargaining contract is entered into by the union
by the law, which is deemed incorporated in all CBA's, provides the representing the employees and the employer, even the non-
reason why the new CBA can only be given a prospective member employees are entitled to the benefits of the contract. To
effect.[18]Calrspä ped accord its benefits only to members of the union without any valid
reason would constitute undue discrimination against
In the case of Lopez Sugar Corporation vs. Federation of Free nonmembers.[22] It is even conceded, that a laborer can claim
Workers, et.al,[19] this Court reiterated the rule that although a CBA benefits from a CBA entered into between the company and the
has expired, it continues to have legal effects as between the union of which he is a member at the time of the conclusion of the
parties until a new CBA has been entered into. It is the duty of both agreement, after he has resigned from said union.[23]Edpä sc
parties to the CBA to keep the status quo, and to continue in full
force and effect the terms and conditions of the existing agreement
In the same vein, the benefits under the CBA in the instant case
should be extended to those employees who only became such
after the year 1984. To exclude them would constitute undue
discrimination and deprive them of monetary benefits they would
otherwise be entitled to under a new collective bargaining contract
to which they would have been parties. Since in this particular
case, no new agreement had been entered into after the CBA's
stipulated term, it is only fair and just that the employees hired
thereafter be included in the existing CBA. This is in consonance
with our ruling that the terms and conditions of a collective
bargaining agreement continue to have force and effect beyond
the stipulated term when no new agreement is executed by and
between the parties to avoid or prevent the situation where no
collective bargaining agreement at all would govern between the
employer company and its employees.
SO ORDERED.
DECISION The agreement left only one issue for resolution of the
parties, namely, retirement. Even this issue was soon settled as
MENDOZA, J.: the parties met before the NCMB on January 14, 1993 and then
agreed on an improved Optional Retirement Clause by giving the
This is a petition for certiorari to set aside the order of employees the option to retire after rendering eighteen (18) years
respondent Honorable Secretary of Labor and Employment, of service instead of the previous twenty (20) years, and granting
declaring (1) wage increases granted by petitioner to its employees the employees retirement benefits equivalent to sixteen (16) days
not creditable as compliance by the company with future mandated for every year of service. Thus, as the Med-Arbiter noted in the
wage increases, and (2) the increases to be retroactive, in the record of the January 14, 1993 conference, ―the issues raised by
case of the fourth year wage increase, to August 1, 1992 to be the notice of strike had been settled and said notice is thus
implemented until July 31, 1993 and, in the case of the fifth year terminated.‖
wage increase, to August 1, 1993 to be implemented until the
But no sooner had he stated this than the Company claimed
expiration of the CBA on July 31, 1994.
that the wage increases which it had agreed to give to the
Petitioner Mindanao Terminal and Brokerage Service, Inc., employees should be creditable as compliance with future
(hereafter referred to as the Company) and respondent Associated mandated wage increases. In addition, it maintained that such
Labor Unions, (hereafter referred to as the Union) entered into a increases should not be retroactive.
collective bargaining agreement for a period of five (5) years,
Reacting to this development, the Union again filed a Notice
starting on August 1, 1989 and ending July 31, 1994.
of Strike on January 28, 1993, with the NCMB. On March 7, 1993,
On the third year of the CBA on August 1, 1992, the the Union staged a strike.
Company and the Union met to renegotiate the provisions of the
The NCMB tried to settle the issues of creditability and
CBA for the fourth and fifth years. The parties, however, failed to
retroactivity, calling for this purpose a conciliation conference on
resolve some of their differences, as a result of which a deadlock
March 9, 1993. As conciliation proved futile, the Company
developed.
petitioned respondent Secretary of Labor and Employment
On November 12, 1992, a formal notice of deadlock was (hereafter Secretary of Labor) to assume jurisdiction over the
sent to the Company on the following issues: wages, vacation dispute. On March 10, 1993, respondent assumed jurisdiction
leave, sick leave, hospitalization, optional retirement, 13th month over the dispute and ordered the parties to submit their respective
pay and signing bonus. position papers on the two unresolved issues.
On November 18, 1992, the Company announced a cost- After submission by the parties of their position papers, the
cutting or retrenchment program. Secretary of Labor issued an Order dated May 14, 1993, ordering
the Company and the Union to incorporate into their existing
Charging unfair labor practice and citing the deadlock in the collective bargaining agreement all improvements reached by them
negotiations, the Union filed, on December 3, 1992, a notice of in the course of renegotiations. The Secretary of Labor held that
strike with the National Conciliation and Mediation Board (NCMB). the wage increases for the fourth and fifth years of the CBA were
On December 18, 1992, as a result of a conference called by not to be credited as compliance with future mandated
the NCMB, the Union and the Company went back to the increases. In addition, the fourth year wage increase was to be
bargaining table and agreed on the following provisions: retroactive to August 1992 and was to be implemented until July
31, 1993, while the fifth year wage increase was to take effect on
August 1, 1993 until the expiration of the CBA.[1]
a. Wage Increase (Article V, Section 2, CBA) - P3.00/day for the
fourth year of the CBA and P3.00/day for the fifth year of the CBA; On May 31, 1993, the Company sought reconsideration of
the May 14, 1993 order. The motion was denied for lack of merit
b. Vacation and Sick Leaves (Article VII, Section 1(c), CBA) - by the Secretary of Labor in a resolution dated July 7,
1,100 hours of aggregate service instead of the existing 1,500 1993. Hence, this petition for certiorari, alleging grave abuse of
hours within a year to be entitled to leave benefits but subject to discretion on the part of respondent Secretary of Labor.
reversion to the previous CBA if majority of the gangs average
The petitioner contends that respondent erred in making the
eight (8) vessels a month;
fourth year wage increase retroactive to August 1, 1992. It denies
the power of the Secretary of Labor to decree retroaction of the
c. Hospitalization (Article VIII, Section 1, CBA) - Maximum wage increases, as the respondent herself had stated in her order
aggregate of 1,100 hours instead of the 1,500 hours and up to be subject of this petition, that it had been more than six (6) months
entitled to the benefit of P2,500.00 with the lower brackets since the expiration of the third anniversary of the CBA and,
adjusted accordingly but subject to reversion to the previous CBA if therefore, the automatic renewal clause of Art. 253-A of the Labor
majority of the gangs average eight (8) vessels a month; Code had no application. Although petitioner originally opposed
giving retroactive effect to their agreement, it subsequently
d. 13th Month Pay (Article XIII, Section 1, CBA) - Average of six modified its stand and agreed that the fourth year wage increase
(6) vessels instead of the existing eight (8) vessels to be entitled to and the other provisions of the CBA be made retroactive to the
date the Secretary of Labor assumed jurisdiction of the dispute on agreement existed in this case from the moment the minds of the
March 10, 1993. parties met on all matters they set out to discuss. As Art. 1315 of
the Civil Code states:
The petition is without merit. Art. 253-A of the Labor Code
reads:
Contracts are perfected by mere consent, and from that moment,
the parties are bound not only to the fulfillment of what has been
Terms of a collective bargaining agreement. - Any Collective expressly stipulated but also to all the consequences which,
Bargaining Agreement that the parties may enter into shall, insofar according to their nature, may be in keeping with good faith, usage
as the representation aspect is concerned, be for a term of five (5) and law.
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 The Secretary of Labor found that ―as early as January 14,
outside of the sixty-day period immediately before the date of 1993, well within the six (6) month period provided by law, the
expiry of such five year term of the Collective Bargaining Company and the Union have perfected their agreement.‖[7]The
Agreement. All other provisions of the Collective claim of petitioner to the contrary notwithstanding, this is a finding
Bargaining Agreement shall be renegotiated not later than three of an administrative agency which, in the absence of evidence to
(3) years after its execution. Any agreement on such other the contrary, must be affirmed.
provisions of the Collective Bargaining Agreement entered into Moreover, the order of the Secretary of Labor may be
within six (6) months from the date of expiry of the term of such considered in the nature of an arbitral award, pursuant to Art.
other provisions as fixed in such Collective Bargaining Agreement, 263(g) of the Labor Code, and, therefore, binding on the
shall retroact to the day immediately following such date. If any parties. After all, the Secretary of Labor assumed jurisdiction over
such agreement is entered into beyond six months, the parties the dispute because petitioner asked the Secretary of Labor to do
shall agree on the duration of retroactivity thereof. In case of a so after the NCMB failed to make the parties come to an
deadlock in the renegotiation of the collective bargaining agreement. It is also conceded that the industry in which the
agreement, the parties may exercise their rights under this Code. petitioner is engaged is vital to the national interest. As stated in
the Order issued by the Secretary of Labor on March 10, 1993:[8]
The respondent indeed stated in her order of May 14, 1993
that ―this case is clearly beyond the scope of the automatic The services being provided by the Company evidently reflect their
renewal clause,‖[2] but she also stated in the same order that ―the indispensability to the normal operations of the Davao City Pier
parties have reached an agreement on all the renegotiated where millions of crates and boxes of goods are loaded and
provisions of the CBA‖ on January 14, 1993, i.e., within six (6) unloaded monthly. The current disruption, therefore, of the
months of the expiration of the third year of the CBA. Company‘s services, if allowed to continue, will cause serious
The signing of the CBA is not determinative of the question prejudice and damages to the agricultural exporters, the cargo
whether ―the agreement was entered into within six months from handlers, the vessel owners, the foreign buyers of agricultural
the date of expiry of the term of such other provisions as fixed in products and the entire business sector in the area. These
such collective bargaining agreement‖ within the contemplation of considerations and the dispute‘s implications on the national
Art. 253-A. economy warrant the intervention by this Office to exercise its
power under Article 263(g) of the Labor Code, as amended.
As already stated, on November 12, 1992, the Union sent
the Company a notice of deadlock in view of their inability to In St. Luke’s Medical Center, Inc. v. Torres,[9] a deadlock also
reconcile their positions on the main issues,[3] particularly on developed during the CBA negotiations between management and
wages. The Union filed a notice of strike. However, on December the union. The Secretary of Labor assumed jurisdiction and
18, 1992, in a conference called by the NCMB, the Union and the ordered the retroaction of their CBA to the date of expiration of the
Company agreed on a number of provisions of the CBA, including previous CBA. As in this case, it was alleged that the Secretary of
the provision on wage increase,[4] leaving only the issue of Labor gravely abused his discretion in making his award
retirement to be threshed out. In time, this, too, was settled, so retroactive. In dismissing this contention this Court held:
that in his record of the January 14, 1993 conference, the Med-
Arbiter noted that ―the issues raised by the notice of strike had Therefore, in the absence of a specific provision of law prohibiting
been settled and said notice is thus terminated.‖ It would therefore retroactivity of the effectivity of arbitral awards issued by the
seem that at that point, there was already a meeting of the minds Secretary of Labor pursuant to Article 263(g) of the Labor Code,
of the parties, which was before the February 1993 end of the six- such as herein involved, public respondent is deemed vested with
month period provided in Art. 253-A. plenary and discretionary powers to determine the effectivity
The fact that no agreement was then signed is of no thereof.
moment. Art. 253-A refers merely to an ―agreement‖ which,
according to Black‘s Law Dictionary is ―a coming together of minds; This case is controlled by the ruling in that case.
the coming together in accord of two minds on a given
proposition.‖[5] This is similar to Art. 1305 of the Civil Code‘s With respect to the issue of the creditability of the fourth and
definition of ―contract‖ as ―a meeting of minds between two fifth year wage increases, the Court takes cognizance of the fact
persons.‖ that the question was raised by the Company only when the six-
month period was almost over and all that was left to be done by
The two terms, ―agreement‖ and ―contract,‖ are indeed the parties was to sign their agreement. Before that, the
similar, although the former is broader than the latter because an Company did not qualify its position. It should have known that
agreement may not have all the elements of a contract. As in the crediting of wage increases in the CBA as compliance with future
case of contracts, however, agreements may be oral or mandated increases is the exception rather than the rule. For the
written.[6] Hence, even without any written evidence of the general rule is that such increases are over and above any
Collective Bargaining Agreement made by the parties, a valid
increase that may be granted by law or wage order. As held in
Meycauayan College v. Drilon:[10]
On June 5, 1998, PAL pilots affiliated with the Airline Pilots On September 18, 1998, PALEA sought the intervention of
Association of the Philippines (ALPAP) went on a three-week the Office of the President in immediately convening the parties,
strike, causing serious losses to the financially beleaguered flag the PAL management, PALEA, ALPAP, and FASAP, including the
carrier. As a result, PAL‘s financial situation went from bad to SEC under the direction of the Inter-Agency Task Force, to prevent
worse. Faced with bankruptcy, PAL adopted a rehabilitation plan the imminent closure of PAL.[4]
and downsized its labor force by more than one-third.
On September 19, 1998, PALEA informed the Department of
On July 22, 1998, PALEA went on strike to protest the Labor and Employment (DOLE) that it had no objection to a
retrenchment measures adopted by the airline, which affected referendum on the Tan‘s offer. 2,799 out of 6,738 PALEA
1,899 union members. The strike ended four days later, when PAL members cast their votes in the referendum under DOLE
and PALEA agreed to a more systematic reduction in PAL‘s work supervision held on September 21-22, 1998. Of the votes cast,
force and the payment of separation benefits to all retrenched 1,055 voted in favor of Tan‘s offer while 1,371 rejected it.
employees.
On September 23, 1998, PAL ceased its operations and sent
On August 28, 1998, then President Joseph E. Estrada notices of termination to its employees.
issued Administrative Order No. 16 creating an Inter-Agency Task
Two days later, the PALEA board wrote President Estrada
Force (Task Force) to address the problems of the ailing flag
anew, seeking his intervention. PALEA offered a 10-year
carrier. The Task Force was composed of the Departments of
moratorium on strikes and similar actions and a waiver of some of
Finance, Labor and Employment, Foreign Affairs, Transportation
the economic benefits in the existing CBA.[5] Tan, however,
and Communication, and Tourism, together with the Securities and
rejected this counter-offer.
Exchange Commission (SEC). Public respondent Edgardo
Espiritu, then the Secretary of Finance, was designated chairman On September 27, 1998, the PALEA board again wrote the
of the Task Force. It was ―empowered to summon all parties President proposing the following terms and conditions, subject to
concerned for conciliation, mediation (for) the purpose of arriving at ratification by the general membership:
a total and complete solution of the problem.‖[1] Conciliation
meetings were then held between PAL management and the three 1. Each PAL employee shall be granted 60,000 shares of stock
unions representing the airline‘s employees,[2] with the Task Force with a par value of P5.00, from Mr. Lucio Tan‘s shareholdings, with
as mediator. three (3) seats in the PAL Board and an additional seat from
On September 4, 1998, PAL management submitted to the government shares as indicated by His Excellency;
Task Force an offer by private respondent Lucio Tan, Chairman
and Chief Executive Officer of PAL, of a plan to transfer shares of 2. Likewise, PALEA shall, as far as practicable, be granted
stock to its employees. The pertinent portion of said plan reads: adequate representation in committees or bodies which deal with
matters affecting terms and conditions of employment;
1. From the issued shares of stock within the group of Mr. Lucio
Tan‘s holdings, the ownership of 60,000 fully paid shares of stock 3. To enhance and strengthen labor-management relations, the
of Philippine Airlines with a par value of PHP5.00/share will be existing Labor-Management Coordinating Council shall be
transferred in favor of each employee of Philippine Airlines in the reorganized and revitalized, with adequate representation from
active payroll as of September 15, 1998. Should any share-owning both PAL management and PALEA;
employee leave PAL, he/she has the option to keep the shares or
4. To assure investors and creditors of industrial peace, PALEA (1) Is an original action for certiorari and prohibition
agrees, subject to the ratification by the general membership, (to) the proper remedy to annul the PAL-PALEA
the suspension of the PAL-PALEA CBA for a period of ten (10) agreement of September 27, 1998;
years, provided the following safeguards are in place:
(2) Is the PAL-PALEA agreement of September 27,
1998, stipulating the suspension of the PAL-
a. PAL shall continue recognizing PALEA as the PALEA CBA unconstitutional and contrary to public
duly certified bargaining agent of the regular policy?
rank-and-file ground employees of the
Company; Anent the first issue, petitioners aver that public respondents
as functionaries of the Task Force, gravely abused their discretion
b. The ‗union shop/maintenance of membership‘ and exceeded their jurisdiction when they actively pursued and
provision under the PAL-PALEA CBA shall be presided over the PAL-PALEA agreement.
respected.
Respondents, in turn, argue that the public respondents
merely served as conciliators or mediators, consistent with the
c. No salary deduction, with full medical benefits. mandate of A.O. No. 16 and merely supervised the conduct of
the October 3, 1998 referendum during which the PALEA
5. PAL shall grant the benefits under the 26 July members ratified the agreement. Thus, public respondents did not
1998 Memorandum of Agreement forged by and between PAL and perform any judicial and quasi-judicial act pertaining to
PALEA, to those employees who may opt to retire or be separated jurisdiction. Furthermore, respondents pray for the dismissal of the
from the company. petition for violating the ―hierarchy of courts‖ doctrine enunciated
in People v. Cuaresma[7] and Enrile v. Salazar.[8]
6. PALEA members who have been retrenched but have not Petitioners allege grave abuse of discretion under Rule 65 of
received separation benefits shall be granted priority in the the 1997 Rules of Civil Procedure. The essential requisites for a
hiring/rehiring of employees. petition for certiorari under Rule 65 are: (1) the writ is directed
against a tribunal, a board, or an officer exercising judicial or quasi-
7. In the absence of applicable Company rule or regulation, the judicial functions; (2) such tribunal, board, or officer has acted
provisions of the Labor Code shall apply.[6] without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3) there
Among the signatories to the letter were herein petitioners is no appeal or any plain, speedy, and adequate remedy in the
Rivera, Ramiso, and Aranas, as officers and/or members of the ordinary course of law.[9] For writs of prohibition, the requisites are:
PALEA Board of Directors. PAL management accepted the (1) the impugned act must be that of a ―tribunal, corporation,
PALEA proposal and the necessary referendum was scheduled. board, officer, or person, whether exercising judicial, quasi-judicial
or ministerial functions;‖ and (2) there is no plain, speedy, and
On October 2, 1998, 5,324 PALEA members cast their votes adequate remedy in the ordinary course of law.‖ [10]
in a DOLE-supervised referendum. Of the votes cast, 61% were in
favor of accepting the PAL-PALEA agreement, while 34% rejected The assailed agreement is clearly not the act of a tribunal,
it. board, officer, or person exercising judicial, quasi-judicial, or
ministerial functions. It is not the act of public respondents
On October 7, 1998, PAL resumed domestic operations. On Finance Secretary Edgardo Espiritu and Labor Secretary
the same date, seven officers and members of PALEA filed this Bienvenido Laguesma as functionaries of the Task Force. Neither
instant petition to annul the September 27, 1998 agreement is there a judgment, order, or resolution of either public
entered into between PAL and PALEA on the following grounds: respondents involved. Instead, what exists is a contract between a
I private firm and one of its labor unions, albeit entered into with the
assistance of the Task Force. The first and second requisites for
certiorari and prohibition are therefore not present in this case.
PUBLIC RESPONDENTS GRAVELY ABUSED THEIR
DISCRETION AND EXCEEDED THEIR JURISDICTION IN Furthermore, there is available to petitioners a plain, speedy,
ACTIVELY PURSUING THE CONCLUSION OF THE PAL-PALEA and adequate remedy in the ordinary course of law. While the
AGREEMENT AS THE CONSTITUTIONAL RIGHTS TO SELF- petition is denominated as one for certiorari and prohibition, its
ORGANIZATION AND COLLECTIVE BARGAINING, BEING object is actually the nullification of the PAL-PALEA
FOUNDED ON PUBLIC POLICY, MAY NOT BE WAIVED, NOR agreement. As such, petitioners‘ proper remedy is an ordinary civil
THE WAIVER, RATIFIED. action for annulment of contract, an action which properly falls
under the jurisdiction of the regional trial courts.[11] Neither
II certiorari nor prohibition is the remedy in the present case.
Petitioners further assert that public respondents were partial
PUBLIC RESPONDENTS GRAVELY ABUSED THEIR towards PAL management. They allegedly pressured the PALEA
DISCRETION AND EXCEEDED THEIR JURISDICTION IN leaders into accepting the agreement. Petitioners ask this Court to
PRESIDING OVER THE CONCLUSION OF THE PAL-PALEA examine the circumstances that led to the signing of said
AGREEMENT UNDER THREAT OF ABUSIVE EXERCISE OF agreement. This would involve review of the facts and factual
PAL‘S MANAGEMENT PREROGATIVE TO CLOSE BUSINESS issues raised in a special civil action for certiorari which is not the
USED AS SUBTERFUGE FOR UNION-BUSTING. function of this Court.[12]
The issues now for our resolution are: Nevertheless, considering the prayer of the parties principally
we shall look into the substance of the petition, in the higher
interest of justice[13] and in view of the public interest involved,
inasmuch as what is at stake here is industrial peace in the other is to assign specific timetables wherein negotiations become
nation‘s premier airline and flag carrier, a national concern. a matter of right and requirement. Nothing in Article 253-A,
prohibits the parties from waiving or suspending the mandatory
On the second issue, petitioners contend that the timetables and agreeing on the remedies to enforce the same.
controverted PAL-PALEA agreement is void because it abrogated
the right of workers to self-organization[14] and their right to In the instant case, it was PALEA, as the exclusive
collective bargaining.[15] Petitioners claim that the agreement was bargaining agent of PAL‘s ground employees, that voluntarily
not meant merely to suspend the existing PAL-PALEA CBA, which entered into the CBA with PAL. It was also PALEA that voluntarily
expires on September 30, 2000, but also to foreclose any opted for the 10-year suspension of the CBA. Either case was the
renegotiation or any possibility to forge a new CBA for a decade or union‘s exercise of its right to collective bargaining. The right to
up to 2008. It violates the ―protection to labor‖ policy[16] laid down free collective bargaining, after all, includes the right to suspend it.
by the Constitution.
The acts of public respondents in sanctioning the 10-year
Article 253-A of the Labor Code reads: suspension of the PAL-PALEA CBA did not contravene the
―protection to labor‖ policy of the Constitution. The agreement
ART. 253-A. Terms of a Collective Bargaining Agreement. afforded full protection to labor; promoted the shared responsibility
– Any Collective Bargaining Agreement that the parties may enter between workers and employers; and the
into shall, insofar as the representation aspect is concerned, be for exercised voluntary modes in settling disputes, including
a term of five (5) years. No petition questioning the majority status conciliation to foster industrial peace."[21]
of the incumbent bargaining agent shall be entertained and no Petitioners further allege that the 10-year suspension of the
certification election shall be conducted by the Department of CBA under the PAL-PALEA agreement virtually installed PALEA
Labor and Employment outside of the sixty-day period immediately as a company union for said period, amounting to unfair labor
before the date of expiry of such five-year term of the Collective practice, in violation of Article 253-A of the Labor Code mandating
Bargaining Agreement. All other provisions of the Collective that an exclusive bargaining agent serves for five years only.
Bargaining Agreement shall be renegotiated not later than three (3)
years after its execution. Any agreement on such other provisions The questioned proviso of the agreement reads:
of the Collective Bargaining Agreement entered into within six (6)
months from the date of expiry of the term of such other provisions a. PAL shall continue recognizing PALEA as the duly
as fixed in such Collective Bargaining Agreement, shall retroact to certified-bargaining agent of the regular rank-and-file ground
the day immediately following such date. If any such agreement is employees of the Company;
entered into beyond six months, the parties shall agree on the
duration of the retroactivity thereof. In case of a deadlock in the
Said proviso cannot be construed alone. In construing an
renegotiation of the collective bargaining agreement, the parties
instrument with several provisions, a construction must be adopted
may exercise their rights under this Code.
as will give effect to all. Under Article 1374 of the Civil
Code,[22] contracts cannot be construed by parts, but clauses must
Under this provision, insofar as representation is concerned, a be interpreted in relation to one another to give effect to the
CBA has a term of five years, while the other provisions, except for whole. The legal effect of a contract is not determined alone by
representation, may be negotiated not later than three years after any particular provision disconnected from all others, but from the
the execution.[17] Petitioners submit that a 10-year CBA suspension whole read together.[23] The aforesaid provision must be read
is inordinately long, way beyond the maximum statutory life of a within the context of the next clause, which provides:
CBA, provided for in Article 253-A. By agreeing to a 10-year
suspension, PALEA, in effect, abdicated the workers‘ constitutional
b. The ‗union shop/maintenance of membership‘ provision
right to bargain for another CBA at the mandated time.
under the PAL-PALEA CBA shall be respected.
We find the argument devoid of merit.
The aforesaid provisions, taken together, clearly show the
A CBA is ―a contract executed upon request of either the
intent of the parties to maintain ―union security‖ during the period of
employer or the exclusive bargaining representative incorporating
the suspension of the CBA. Its objective is to assure the continued
the agreement reached after negotiations with respect to wages,
existence of PALEA during the said period. We are unable to
hours of work and all other terms and conditions of employment,
declare the objective of union security an unfair labor practice. It is
including proposals for adjusting any grievances or questions
State policy to promote unionism to enable workers to negotiate
arising under such agreement.‖[18] The primary purpose of a CBA is
with management on an even playing field and with more
the stabilization of labor-management relations in order to create a
persuasiveness than if they were to individually and separately
climate of a sound and stable industrial peace.[19] In construing a
bargain with the employer. For this reason, the law has allowed
CBA, the courts must be practical and realistic and give due
stipulations for ―union shop‖ and ―closed shop‖ as means of
consideration to the context in which it is negotiated and the
encouraging workers to join and support the union of their choice
purpose which it is intended to serve.[20]
in the protection of their rights and interests vis-à-vis the
The assailed PAL-PALEA agreement was the result of employer.[24]
voluntary collective bargaining negotiations undertaken in the light
Petitioners‘ contention that the agreement installs PALEA as
of the severe financial situation faced by the employer, with the
a virtual company union is also untenable. Under Article 248 (d) of
peculiar and unique intention of not merely promoting industrial
the Labor Code, a company union exists when the employer acts
peace at PAL, but preventing the latter‘s closure. We find no
―[t]o initiate, dominate, assist or otherwise interfere with the
conflict between said agreement and Article 253-A of the Labor
formation or administration of any labor organization, including the
Code. Article 253-A has a two-fold purpose. One is to promote
giving of financial or other support to it or its organizers or
industrial stability and predictability. Inasmuch as the agreement
supporters.‖ The case records are bare of any showing of such
sought to promote industrial peace at PAL during its rehabilitation,
acts by PAL.
said agreement satisfies the first purpose of Article 253-A. The
We also do not agree that the agreement violates the five-
year representation limit mandated by Article 253-A. Under said
article, the representation limit for the exclusive bargaining agent
applies only when there is an extant CBA in full force and effect. In
the instant case, the parties agreed to suspend the CBA and put in
abeyance the limit on the representation period.
In sum, we are of the view that the PAL-PALEA agreement
dated September 27, 1998, is a valid exercise of the freedom to
contract. Under the principle of inviolability of contracts
guaranteed by the Constitution,[25] the contract must be upheld.
WHEREFORE, there being no grave abuse of discretion
shown, the instant petition is DISMISSED. No pronouncement as
to costs.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr.,
JJ., concur.
G.R. No. L-54334 January 22, 1986 The case was further reset to May 11, 1979 due to the withdrawal
of the Company's counsel of record, Atty. Rodolfo dela Cruz. On
KIOK LOY, doing business under the name and style May 24, 1978, Atty. Fortunato Panganiban formally entered his
SWEDEN ICE CREAM PLANT, petitioner, appearance as counsel for the Company only to request for
vs. another postponement allegedly for the purpose of acquainting
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and himself with the case. Meanwhile, the Company submitted its
PAMBANSANG KILUSAN NG PAGGAWA position paper on May 28, 1979.
(KILUSAN), respondents.
When the case was called for hearing on June 4, 1979 as
Ablan and Associates for petitioner. scheduled, the Company's representative, Mr. Ching, who was
supposed to be examined, failed to appear. Atty. Panganiban then
requested for another postponement which the labor arbiter
Abdulcadir T. Ibrahim for private respondent.
denied. He also ruled that the Company has waived its right to
present further evidence and, therefore, considered the case
CUEVAS, J.: submitted for resolution.
Petition for certiorari to annul the decision 1 of the National Labor On July 18, 1979, labor arbiter Andres Fidelino submitted its report
Relations Commission (NLRC) dated July 20, 1979 which found to the National Labor Relations Commission. On July 20, 1979, the
petitioner Sweden Ice Cream guilty of unfair labor practice for National Labor Relations Commission rendered its decision, the
unjustified refusal to bargain, in violation of par. (g) of Article dispositive portion of which reads as follows:
249 2 of the New Labor Code, 3 and declared the draft proposal of
the Union for a collective bargaining agreement as the governing
WHEREFORE, the respondent Sweden Ice
collective bargaining agreement between the employees and the
Cream is hereby declared guilty of unjustified
management.
refusal to bargain, in violation of Section (g)
Article 248 (now Article 249), of P.D. 442, as
The pertinent background facts are as follows: amended. Further, the draft proposal for a
collective bargaining agreement (Exh. "E ")
In a certification election held on October 3, 1978, the hereto attached and made an integral part of
Pambansang Kilusang Paggawa (Union for short), a legitimate late this decision, sent by the Union (Private
labor federation, won and was subsequently certified in a respondent) to the respondent (petitioner
resolution dated November 29, 1978 by the Bureau of Labor herein) and which is hereby found to be
Relations as the sole and exclusive bargaining agent of the rank- reasonable under the premises, is hereby
and-file employees of Sweden Ice Cream Plant (Company for declared to be the collective agreement which
short). The Company's motion for reconsideration of the said should govern the relationship between the
resolution was denied on January 25, 1978. parties herein.
Thereafter, and more specifically on December 7, 1978, the Union SO ORDERED. (Emphasis supplied)
furnished 4 the Company with two copies of its proposed collective
bargaining agreement. At the same time, it requested the Petitioner now comes before Us assailing the aforesaid decision
Company for its counter proposals. Eliciting no response to the contending that the National Labor Relations Commission acted
aforesaid request, the Union again wrote the Company reiterating without or in excess of its jurisdiction or with grave abuse of
its request for collective bargaining negotiations and for the discretion amounting to lack of jurisdiction in rendering the
Company to furnish them with its counter proposals. Both requests challenged decision. On August 4, 1980, this Court dismissed the
were ignored and remained unacted upon by the Company. petition for lack of merit. Upon motion of the petitioner, however,
the Resolution of dismissal was reconsidered and the petition was
Left with no other alternative in its attempt to bring the Company to given due course in a Resolution dated April 1, 1981.
the bargaining table, the Union, on February 14, 1979, filed a
"Notice of Strike", with the Bureau of Labor Relations (BLR) on Petitioner Company now maintains that its right to procedural due
ground of unresolved economic issues in collective bargaining. 5 process has been violated when it was precluded from presenting
further evidence in support of its stand and when its request for
Conciliation proceedings then followed during the thirty-day further postponement was denied. Petitioner further contends that
statutory cooling-off period. But all attempts towards an amicable the National Labor Relations Commission's finding of unfair labor
settlement failed, prompting the Bureau of Labor Relations to practice for refusal to bargain is not supported by law and the
certify the case to the National Labor Relations Commission evidence considering that it was only on May 24, 1979 when the
(NLRC) for compulsory arbitration pursuant to Presidential Decree Union furnished them with a copy of the proposed Collective
No. 823, as amended. The labor arbiter, Andres Fidelino, to whom Bargaining Agreement and it was only then that they came to know
the case was assigned, set the initial hearing for April 29, 1979. of the Union's demands; and finally, that the Collective Bargaining
For failure however, of the parties to submit their respective Agreement approved and adopted by the National Labor Relations
position papers as required, the said hearing was cancelled and Commission is unreasonable and lacks legal basis.
reset to another date. Meanwhile, the Union submitted its position
paper. The Company did not, and instead requested for a resetting The petition lacks merit. Consequently, its dismissal is in order.
which was granted. The Company was directed anew to submit its
financial statements for the years 1976, 1977, and 1978.
Collective bargaining which is defined as negotiations towards a
collective agreement, 6 is one of the democratic frameworks under
the New Labor Code, designed to stabilize the relation between
labor and management and to create a climate of sound and stable As a last-ditch attempt to effect a reversal of the decision sought to
industrial peace. It is a mutual responsibility of the employer and be reviewed, petitioner capitalizes on the issue of due process
the Union and is characterized as a legal obligation. So much so claiming, that it was denied the right to be heard and present its
that Article 249, par. (g) of the Labor Code makes it an unfair labor side when the Labor Arbiter denied the Company's motion for
practice for an employer to refuse "to meet and convene promptly further postponement.
and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other Petitioner's aforesaid submittal failed to impress Us. Considering
terms and conditions of employment including proposals for the various postponements granted in its behalf, the claimed denial
adjusting any grievance or question arising under such an of due process appeared totally bereft of any legal and factual
agreement and executing a contract incorporating such support. As herein earlier stated, petitioner had not even honored
agreement, if requested by either party. respondent Union with any reply to the latter's successive letters,
all geared towards bringing the Company to the bargaining table. It
While it is a mutual obligation of the parties to bargain, the did not even bother to furnish or serve the Union with its counter
employer, however, is not under any legal duty to initiate contract proposal despite persistent requests made therefor. Certainly, the
negotiation. 7 The mechanics of collective bargaining is set in moves and overall behavior of petitioner-company were in total
motion only when the following jurisdictional preconditions are derogation of the policy enshrined in the New Labor Code which is
present, namely, (1) possession of the status of majority aimed towards expediting settlement of economic disputes. Hence,
representation of the employees' representative in accordance with this Court is not prepared to affix its imprimatur to such an illegal
any of the means of selection or designation provided for by the scheme and dubious maneuvers.
Labor Code; (2) proof of majority representation; and (3) a demand
to bargain under Article 251, par. (a) of the New Labor Code . ... all Neither are WE persuaded by petitioner-company's stand that the
of which preconditions are undisputedly present in the instant Collective Bargaining Agreement which was approved and
case. adopted by the NLRC is a total nullity for it lacks the company's
consent, much less its argument that once the Collective
From the over-all conduct of petitioner company in relation to the Bargaining Agreement is implemented, the Company will face the
task of negotiation, there can be no doubt that the Union has a prospect of closing down because it has to pay a staggering
valid cause to complain against its (Company's) attitude, the amount of economic benefits to the Union that will equal if not
totality of which is indicative of the latter's disregard of, and failure exceed its capital. Such a stand and the evidence in support
to live up to, what is enjoined by the Labor Code — to bargain in thereof should have been presented before the Labor Arbiter which
good faith. is the proper forum for the purpose.
We are in total conformity with respondent NLRC's pronouncement We agree with the pronouncement that it is not obligatory upon
that petitioner Company is GUILTY of unfair labor practice. It has either side of a labor controversy to precipitately accept or agree to
been indubitably established that (1) respondent Union was a duly the proposals of the other. But an erring party should not be
certified bargaining agent; (2) it made a definite request to bargain, tolerated and allowed with impunity to resort to schemes feigning
accompanied with a copy of the proposed Collective Bargaining negotiations by going through empty gestures. 13 More so, as in the
Agreement, to the Company not only once but twice which were instant case, where the intervention of the National Labor
left unanswered and unacted upon; and (3) the Company made no Relations Commission was properly sought for after conciliation
counter proposal whatsoever all of which conclusively indicate lack efforts undertaken by the BLR failed. The instant case being a
of a sincere desire to negotiate. 8 A Company's refusal to make certified one, it must be resolved by the NLRC pursuant to the
counter proposal if considered in relation to the entire bargaining mandate of P.D. 873, as amended, which authorizes the said body
process, may indicate bad faith and this is specially true where the to determine the reasonableness of the terms and conditions of
Union's request for a counter proposal is left unanswered. 9 Even employment embodied in any Collective Bargaining Agreement. To
during the period of compulsory arbitration before the NLRC, that extent, utmost deference to its findings of reasonableness of
petitioner Company's approach and attitude-stalling the negotiation any Collective Bargaining Agreement as the governing agreement
by a series of postponements, non-appearance at the hearing by the employees and management must be accorded due respect
conducted, and undue delay in submitting its financial statements, by this Court.
lead to no other conclusion except that it is unwilling to negotiate
and reach an agreement with the Union. Petitioner has not at any WHEREFORE, the instant petition is DISMISSED. The temporary
instance, evinced good faith or willingness to discuss freely and restraining order issued on August 27, 1980, is LIFTED and SET
fully the claims and demands set forth by the Union much less ASIDE.
justify its opposition thereto. 10
No pronouncement as to costs.
The case at bar is not a case of first impression, for in the Herald
Delivery Carriers Union (PAFLU) vs. Herald Publications11 the rule
SO ORDERED.
had been laid down that "unfair labor practice is committed when it
is shown that the respondent employer, after having been served
with a written bargaining proposal by the petitioning Union, did not
even bother to submit an answer or reply to the said proposal This
doctrine was reiterated anew in Bradman vs. Court of Industrial
Relations 12 wherein it was further ruled that "while the law does
not compel the parties to reach an agreement, it does contemplate
that both parties will approach the negotiation with an open mind
and make a reasonable effort to reach a common ground of
agreement
G.R. No. L-77282 May 5, 1989 Mamumuo sa GAW (NAMGAW) undertook a
... Strike ... after it failed to get the
ASSOCIATED LABOR UNIONS (ALU) petitioner, management of GAW Trading Inc. to sit for a
vs. conference respecting its demands presented
HON. PURA FERRER-CALLEJA, as Director of the Bureau of at 11: A.M. on the same day in an effort to
Labor Relations, Ministry of Labor and Employment; pressure GAW Trading Inc. to make a
PHILIPPINE SOCIAL SECURITY LABOR UNION (PSSLU); turnabout of its standign recognition of ALU as
SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL) the sole and exclusive bargaining
and GAW TRADING, INC., respondents. representative of its employees, as to which
strike GAW Trading Inc. filed a petition for
Restraining Order/Preliminary Injunction,
Romeo S. Occena, Leonard U. Sawal, Edgemelo C. Rosales and
dfated June 1, 1986 (Annex H) and which
Ernesto Carreon for petitioner.
strike Labor Arbiter Bonifacio B. Tumamak
Henrick F. Gingoyon for respondent SPFL.
held as illegal in a decision dated August 5,
Wilfredo L. Orcullo for respondent Southern Philippines Federation
1986 (ANNEX I);
of Labor.
Miguel A. Enrique, Jr. for respondent GAW Trading, Inc.
6. On May 19, 1986, GAW Lumad Labor Union
(GALLU-PSSLU) Federation ... filed a
REGALADO, J.:
Certification Election petition (ANNEX J), but
as found by Med-Arbiter Candido M. Cumba in
Petitioner Associated Labor Unions (ALU, for brevity) instituted this its (sic) Order dated Ju ne 11, 1986 (ANNEX
special civil action for certiorari and prohibition to overturn the K), without having complied (sic) the
decision of the respondent direcstor 1 dated December 10, 1986, subscription requirement for which it was
which ordered the holding of a certification election among the merely considered an intervenor until
rank-and-file workers of the private respondent GAW Trading, Inc. compliance thereof in the other petition for
The averments in the petition therefor, which succinctly but direct recogbnition as bargaining agent filed on
sufficiently detail the relevant factual antecedents of this MAy 28, 1986 by southern Philippines
proceedings, justify their being quoted in full, thus: Federation of Labor (SPFL) as found in the
same order (ANNEX K);
1. The associated Labor Unions (ALU) thru its
regional Vice-Presidents Teofanio C. Nuñez, in 7. Int he meantime, the Collective Bargaining
a letter dated May 7, 1986 (ANNEX C) Agreement executed by ALU and GAW
informed GAW Trading, Inc. that majority of the Trading Inc. (ANNEX F) was duly filed May 27,
latter's employees have authorized ALU to be 1986 with the Ministry of Labor and
their sole and exclusive bargaining Employment in Region VII, Cebu city;
representative, and requested GAW Trading
Inc., in the same Letter for a conference for the
8. Nevertheless, Med-Arbiter Candido M.
execution of an initial Collective Bargaining
Cumba in his order of June 11, 1986 (Annex K)
Agreement (CBA);
ruled for the holding of a ceritfication election in
all branches of GAW Trading Inc. in Cebu City,
2. GAW Trading Inc. received the Letter of as to which ALU filed a Motion for
ALU aforesaid on the same day of May 7, 1986 Reconsideration dated June 19, 1986 (ANNEX
as acknowledged thereunder and responded L) which was treated as an appeal on that
(sic) ALU in a letter dated May 12, 1986 questioned Order for which reason the entire
(Annex D) indicating its recognition of ALU as record of subject certification case was
the sole and exclusive bargaining agent for the forwarded for the Director, Bureau of LAbor
majority of its employees and for which it set Relations, Ministry of Labor and Employment,
the time for conference and/or negotiation at Manila (ANNEX M);
4:00 P.M. on May 12, 1986 at the Pillsbury
Office, Aboitiz Building Juan Luna Street, Cebu
9. Bureau of Labor Relations Director
City;
Cresencio B. Trajano, rendered a Decision on
August 13, 1986 (Annex B) granting ALU's
3. On the following day of May13, 1986, ALU in appeal (Motion for Reconsideration) and set
behalf of the majority of the employees of aside the questioned Med-Arbiter Order of
GAW Trading Inc. signed and excuted the June 11, 1986 (Annex K), on the ground that
Collective Bargaining (ANNEX F) ... the CBA has been effective and valid and the
contract bar rule applicable;
4. On May 15, 1986, ALU in behalf of the
majority of the employees of GAW Trading Inc. 10. But the same Decision of Director
and GAW Trading Inc. signed and executed Crecensio B. Trajano was sought for
the Collective Bargaining Agreements (ANNEX reconsideratrion both by Southern Philippines
F) . . . . Federation of Labor (SPFL) on August 26,
1986 (ANNEX N), supplemented by the
5. In the meantime, at about 1:00 P.M. of May 'SUBMISSION OD ADDITIONAL EVIDENCE'
9, 1986, the Southern Philippines Federation of dated September 29, 1986 (ANNEX O), and
Labor (SPFL) together with Nagkahiusang
the Philppine Social Security Labor Union It bears mention that even in cases where it was the then Minister
(PSSLU) on October 2, 1986 (ANNEX P), of Labor himself who directly certified the union as the bargaining
which were opposed by both GAW Trading, representative, this Court voided such certification where there
Inc. on September 2, 1986 (ANNEX Q) and was a failure to properly determine with legal certainty whether the
ALU on September 12, 1986 (ANNEX R); 2 union enjoyed a majority representation. In such a case, the
holding of a certification election at a proper time would not
The aforesaid decision of then Director Trajano was thereafter necessarily be a mere formality as there was a compelling reason
reversed by respondent director in her aforecited decision which is not to directly and unilaterally certify a union. 7
now assailed in this action. A motion for reconsideration of
ALU 3 appears to have been disregarded, hence, its present resort An additional infirmity of the collective bargaining agreement
grounded on grave abuse of discretion by public respondent. involved was the failure to post the same in at least two (2)
conspicuous places in the establishment at least five days before
Public respondent ordered the holding of a certification election its ratification. 8 Petitioners rationalization was that "(b)ecause of
ruling that the "contract bar rule" relied upon by her predecessor the real existence of the illegal strike staged by SPFL in all the
does not apply in the present controversy. According to the stores of GAW Trading, Inc. it had become impossible to comply
decision of said respondent, the collective bargaining agreement with the posting requirement in so far as the realization of tits
involved herein is defective because it "was not duly submitted in purpose is concerned as there were no impartial members of the
accordance with Section I, Rule IX, Book V of the Implementing unit who could be appraised of the CBA's contents. " 9 This
Rules of Batas Pambansa Blg. 130." It was further observed that justification is puerile and unacceptable.
"(t)here is no proof tending to show that the CBA has been posted
in at least two conspicuous places in the 1 establishment at least In the first place, the posting of copies of the collective bargaining
five days before its ratification and that it has been ratified by the agreement is the responsibility of the employer which can easily
majority of the employees in the bargaining unit." comply with the requirement through a mere mechanical act. The
fact that there were "no impartial members of the unit" is
We find no reversible error in the challenged decision of immaterial. The purpose of the requirement is precisely to inform
respondent director. A careful consideration of the facts culled from the employees in the bargaining unit of the contents of said
the records of this case, especially the allegations of petitioner agreement so that they could intelligently decide whether to accept
itself as hereinabove quoted, yields the conclusion that the the same or not. The assembly of the members of ALU wherein
collective bargaining agreement in question is indeed defective the agreement in question was allegedly explained does not cure
hence unproductive of the legal effects attributed to it by the former the defect. The contract is intended for all employees and not only
director in his decision which was subsequently and properly for the members of the purpoted representative alone. It may even
reversed. be said the the need to inform the non-members of the terms
thereof is more exigent and compelling since, in all likehood, their
contact with the persons who are supposed to represent them is
We have previously held that the mechanics of collective
limited. Moreover, to repeat, there was an apparent and suspicious
bargaining are set in motion only when the following jurisdictional
hurry in the formulation and finalization of said collective
preconditions are present, namely, (1) possession of the status of
bargaining accord. In the sforementioned letter where respondent
majority representation by the employees' representative in
company required petitioner union to present proof of its support
accordance with any of the means of selection and/or designation
by the employees, the company already suggested that petitioner
provided for by the Labor Code; (2) proof of majority
ALU at the same time submit the proposals that it intended to
representation; and (3) a demand to bargain under Article 251,
embody in the projected agreement. This was on May 12, 1986,
paragraph (a), of the New Labor Code. 4 In the present case, the
and prompltly on thre following day the negoltiation panel; furnish
standing of petitioner as an exclusive bargaining representative is
respondent company final copies of the desired agreement whcih,
dubious, to say the least. It may be recalled that respondent
with equal dispatch, was signed on May 15, 1986.
company, in a letter dated May 12, 1986 and addressed to
petitioner, merely indicated that it was "not against the desire of
(its) workers" and required petitioner to present proof that it was Another potent reason for annulling the disputed collective
supported by the majority thereof in a meeting to be held on the bargaining is the finding of respondent director that one hundred
same date. 5 The only express recognition of petitioner as said eighty-one( 181) of the two hundred eighty-one (281) workers who
employees' bargaining representative that We see in the records is "ratified" the same now " strongly and vehemently deny and/or
in the collective bargaining agreement entered into two days repudiate the alleged negotiations and ratification of the CBA.
thereafter. 6 Evidently, there was precipitate haste on the part of " 10 Although petitioner claims that only sev en (7) of the
respondent company in recognizing petitioner union, which repudiating group of workers belong to the total number who
recognition appears to have been based on the self-serving claim allegedly ratified the agreement, nevertheless such substantiated
of the latter that it had the support of the majority of the employees contention weighed against the factujal that the controverted
in the bargaining unit. Furthermore, at the time of the supposed contract will not promote industrial stability . The Court has long
recognition, the employer was obviously aware that there were since declared that:
other unions existing in the unit. As earlier stated, respondent
company's letter is dated May 12, 1986 while the two other unions, ... Basic to the contract bar rule is the
Southern Philippine Federation of Labor (hereafter, SPFL and proposition that the delay of the right to select
Philippine Social Security Labor Union (PSSLU, for short), went on represen tatives can be justified only where
strike earlier on May 9, 1986. The unusual promptitude in the stability is deemed paramount. Excepted from
recognition of petitioner union by respondent company as the the contract which do not foster industrial
exclusive bargaining representative of the workers in GAW stability, such as contracts where the identity of
Trading, Inc. under the fluid and amorphous circumstances then the representative is in doubt. Any stability
obtaining, was decidedly unwarranted and improvident. derived from such contracts must be
subordinated to the employees' freedom of
choice because it does nto establish the type
of industrial peace contemplated by the law. 11
SO ORDERED.
Anent the second issue, petitioner claims that Atty. Batalla was
merely a substitute lawyer for Atty. Christine Ona, who got
stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar with
the collective bargaining history of its establishment. Petitioner
claims it should not be bound by the mistake committed by its
substitute lawyer.
"Managerial employee" is one who is vested Finally, we note that it was petitioner company that filed the motion
with power or prerogatives to lay down and to dismiss the petition for election. The general rule is that an
execute management policies and/or to hire, employer has no standing to question a certification election since
transfer, suspend, lay-off, recall, discharge, this is the sole concern of the workers. 11 Law and policy demand
assign or discipline employees. Supervisory that employers take a strick, hands-off stance in certification
employees are those who, in the interest of the elections. The bargaining representative of employees should be
employer, effectively recommend such chosen free from any extraneous influence of management. A
managerial actions if the exercise of such labor bargaining representative, to be effective, must owe its
authority is not merely routinary or clerical in loyalty to the employees alone and to no other.
nature but requires the use of independent
judgment. All employees not falling within any WHEREFORE, the petition is DISMISSED for lack of merit. With
of the above definitions are considered rank- costs against petitioner.
and-file employees for purposes of this Book.
SO ORDERED.
Given this definition, the monthly paid office and
technical employees, accountants, and cashiers of the Narvasa, C.J., Padilla, Regalado and Mendoza, JJ. concur.
petitioner are not managerial employees for they do not
participate in policy-making but are given cut out policies
to execute and standard practices to observe. 8 In the
main, the discharge of their duties does not involve the
use of independent judgment. As factually found by the
Med-Arbiter, to wit:
The case began on 13 February 1965 by a petition of the The main issue involved herein is: Whether or not a new
respondent "Samahan ng mga Manggagawa, etc." calling attention unit should be established, the Caloocan shops,
to the fact that there were three unions in the Caloocan shops of separate and distinct from the rest of the workers under
the Philippine National Railways: the "Samahan", the "Kapisanan the Mechanical Department now represented by the
ng Manggagawa sa Manila Railroad Company", and the Mechanical Department Labor Union.
Mechanical Department Labor Union; that no certification election
had been held in the last 12 months in the Caloocan shops; that The Caloocan Shops, all located at Caloocan City have
both the "Samahan" and the Mechanical Department Labor Union 360 workers more or less. It is part and parcel of the
had submitted different labor demands upon the management for whole Mechanical Department of the Philippine National
which reason a certification election was needed to determine the Railways. The department is composed of four main
proper collective bargaining agency for the Caloocan shop divisions or units, namely: Operations, Manila Area and
workers. Lines; Locomotive Crew; Motor Car Crew; and the Shops
Rolling Stocks Maintenance. (Exhibits "D" and "D-1").
The petition was opposed by the management as well as by the
Mechanical Department Labor Union, the latter averring that it had The Locomotive crew and Motor Car Crew, though part
been previously certified in two cases as sole and exclusive of the Mechanical Department, is a separate unit, and is
bargaining agent of the employees and laborers of the PNR'S represented by the Union de Maquinistas, Fogoneros Y
mechanical department, and had negotiated two bargaining Motormen. The workers under the other two main units
agreements with management in 1961 and 1963; that before the of the departments are represented by the Mechanical
expiration of the latter, a renewal thereof had been negotiated and Department Labor Union. The workers of the Shops
the contract remained to be signed; that the "Samahan" had been Rolling Stocks Maintenance Division or the Caloocan
organized only in 21 January 1965; that the Caloocan shops unit Shops now seek to be separated from the rest of the
was not established nor separated from the Mechanical workers of the department and to be represented by the
Department unit; that the "Samahan" is composed mainly of "Samahan Ng Mga Manggagawa sa Caloocan Shops." .
supervisors who had filed a pending case to be declared non-
supervisors; and that the purpose of the petition was to disturb the
There is certainly a community of interest among the
present smooth working labor management relations.
workers of the Caloocan Shops. They are grouped in
one place. They work under one or same working
By an order of 18 August 1967, Judge Arsenio Martinez, after condition, same working time or schedule and are
receiving the evidence, made the following findings:.1äwphï1.ñët exposed to same occupational risk.
The Court, after a cursory examination of the evidence Though evidence on record shows that workers at the
presented made the following findings: That petitioner Caloocan Shops perform the same nature of work as
union is composed of workers exclusively at the their counterparts in the Manila Shed, the difference lies
Caloocan shops of the Philippine National Railways in the fact that workers at the Caloocan Shops perform
charged with the maintenance of rolling stocks for major repairs of locomotives, rolling stocks, engines,
repairs; major repairs of locomotive, engines, etc. are etc., while those in the Manila Shed, works on minor
done in the Caloocan shops while minor ones in the repairs. Heavy equipment and machineries are found in
Manila sheds; workers in the Caloocan shops do not the Caloocan Shops.
leave their station unlike Manila shop workers who go
out along the routes and lines for repairs; workers both in
the Caloocan shops and Manila sheds are exposed to
The trial judge then reviewed the collective bargaining history of We find no grave abuse of discretion in the issuance of the ruling
the Philippine National Railways, as follows: 1äwphï1.ñët under appeal as would justify our interfering with it. Republic Act
No. 875 has primarily entrusted the prosecution of its policies to
On several similar instances, this Court allowed the the Court of Industrial Relations, and, in view of its intimate
establishment of new and separate bargaining unit in knowledge concerning the facts and circumstances surrounding
one company, even in one department of the same the cases brought before it, this Court has repeatedly upheld the
company, despite the existence of the same facts and exercise of discretion of the Court of Industrial Relations in matters
circumstances as obtaining in the case at bar. concerning the representation of employee groups (Manila Paper
Mills Employees & Workers' Association vs. C.I.R. 104 Phil. 10;
Benguet Consolidated vs. Bobok Lumber Jack Association, 103
The history of the collective bargaining in the Manila
Phil. 1150).
Railroad Company, now the Philippine National Railways
shows that originally, there was only one bargaining unit
in the company, represented by the Kapisanan Ng Appellant contends that the application of the "Globe doctrine" is
Manggagawa sa MRR. Under Case No. 237-MC, this not warranted because the workers of the Caloocan shops do not
Court ordered the establishment of two additional units, require different skills from the rest of the workers in the
the engine crew and the train crew to be represented by Mechanical Department of the Railway Company. This question is
the Union de Maquinistas, Fogoneros, Ayudante Y primarily one of facts. The Industrial Court has found that there is a
Motormen and Union de Empleados de Trenes, basic difference, in that those in the Caloocan shops not only have
respectively. Then in 1961, under Cases Nos. 491-MC, a community of interest and working conditions but perform major
494-MC and 507-MC three new separate units were repairs of railway rolling stock, using heavy equipment and
established, namely, the yard crew unit, station machineries found in said shops, while the others only perform
employees unit and engineering department employees minor repairs. It is easy to understand, therefore, that the workers
unit, respectively, after the employees concerned voted in the Caloocan shops require special skill in the use of heavy
in a plebiscite conducted by the court for the separation equipment and machinery sufficient to set them apart from the rest
from existing bargaining units in the company. Then of the workers. In addition, the record shows that the collective
again, under Case No. 763-MC, a new unit, composed of bargaining agreements negotiated by the appellant union have
the Mechanical Department employees, was established been in existence for more than two (2) years; hence, such
to be represented by the Mechanical Department Labor agreements can not constitute a bar to the determination, by
Union. Incidentally, the first attempt of the employees of proper elections, of a new bargaining representative (PLDT
the Mechanical Department to be separated as a unit Employees' Union vs. Philippine Long Distance Telephone Co., 51
was dismissed by this Court of Case No. 488-MC. Off. Gaz., 4519).
In the case of the yard crew, station employees and the As to the charge that some of the members of the appellee,
Engineering Department employees, the Supreme Court "Samahan Ng Manggagawa", are actually supervisors, it appears
sustained the order of this Court in giving the employees that the question of the status of such members is still pending
concerned the right to vote and decide whether or not final decision; hence, it would not constitute a legal obstacle to the
they desire to be separate units (See G.R. Nos. L-16292- holding of the plebiscite. At any rate, the appellant may later
94, L-16309 and L-16317-18, November, 1965). question whether the votes of those ultimately declared to be
supervisors should be counted.
In view of its findings and the history of "union representation" in
the railway company, indicating that bargaining units had been Whether or not the agreement negotiated by the appellant union
formed through separation of new units from existing ones with the employer, during the pendency of the original petition in
whenever plebiscites had shown the workers' desire to have their the Court of Industrial Relations, should be considered valid and
own representatives, and relying on the "Globe doctrine" (Globe binding on the workers of the Caloocan shops is a question that
Machine & Stamping Co., 3 NLRB 294) applied in Democratic should be first passed upon by the Industrial Court.
Labor Union vs. Cebu Stevedoring Co., L-10321, 28 February
1958, Judge Martinez held that the employees in the Caloocan IN VIEW OF THE FOREGOING, the order appealed from is
Shops should be given a chance to vote on whether their group affirmed, with costs against appellant Mechanical Department
should be separated from that represented by the Mechanical Labor Union sa Philippine National Railways.
Department Labor Union, and ordered a plebiscite held for the
purpose. The ruling was sustained by the Court en Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro,
banc; wherefore, the Mechanical Department Labor Union Angeles and Fernando, JJ., concur. 1äwphï1.ñët
appealed to this Court questioning the applicability under the
circumstances of the "Globe doctrine" of considering the will of the
employees in determining what union should represent them.
WHEREFORE, premises considered, the Order of the Med-Arbiter xxx xxx xxx
dated 4 April 1988 is hereby set aside and vacated and a new one
entered ordering the conduct of a certification election among 6. The petition is supported by the signatures
regular rank-and-file professional, technical, administrative and of more than twenty percent (20%) of all
confidential employees of respondent company, with the following covered employees as provided for by law and
choices: which shall be presented during the initial
hearing;
1. Kapisanan ng mga Kawani, Assistant
Manggagawa at Konpidensyal sa Philtranco xxx xxx xxx
(KASAMA KO)
8. There has been no Consent Election or
2. No Union. Certification Election held and conducted by
this Honorable Office for the past three (3)
Let, therefore the records of the case be years prior to the filing of this petition in the
remanded to the Office of origin for the bargaining unit petitioner sought to represent,
immediate conduct of the election. the last Certification Election having been held
last November 27, 1984. Attached hereto as
Annex "C" is a copy of the Order issued by this
SO ORDERED. (Rollo, p. 33)
Honorable Office relative to the result of the
last certification election. (Rollo, pp. 4-5)
The antecedent facts are as follows:
On February 24, 1988, the National Mines and Allied Workers
Petitioner Philtranco Service Enterprises, Inc. is a land Union (NAMAWU-MIF) filed a motion for intervention alleging that
transportation company engaged in the business of carrying it is the bargaining agent of the workers at Philtranco and as such
passengers and freight. The company employees included field it has a substantial interest in the outcome of the petition.
workers consisting of drivers, conductors, coach drivers, coach
stewards and mechanics and office employees like clerks,
On February 26, 1988, Arbiter Paterno Adap called the parties to a
cashiers, programmers, telephone operators, etc.
hearing. Philtranco and NAMAWU were ordered to submit their
respective position papers and KASAMA KO was given the
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant, opportunity to submit a reply.
Manggagawa at Konpidensyal sa Philtranco (KASAMA KO), a
registered labor organization filed a petition for certification election
On April 4, 1988, a resolution was rendered with the following
with the Department of Labor and Employment, alleging among
dispositive portion:
others that:
WHEREFORE, in the light of the foregoing
xxx xxx xxx
premises, this petition is, as it is hereby
ordered DISMISSED. If there are still individual
3. Petitioner desires to represent all members of the herein petitioner eligible to join
professional, technical, administrative, and a labor organization, it is hereby directed that
confidential employees personnel of all should be included/incorporated in the
respondent at its establishments in Luzon, existing bargaining unit.
Visayas and Mindanao for purposes of
collective bargaining;
Parties are further directed/enjoined to device included because parties have agreed on the
a mechanism for the implementation of the fact that the aforementioned group of workers
matter herein treated. (Rollo, pp. 29-30) are not qualified to join a labor organization at
the time the agreement was executed and that
KASAMA KO appealed to the Bureau of Labor Relations (BLR) On they were classified as outside the parameter
September 5, 1988 the BLR reversed the resolution of the Med- of the bargaining unit. (Rollo, pp. 28-29)
Arbiter. A motion for reconsideration was denied in an order dated
October 10, 1988. The respondents, on the other hand, aver that the members of the
respondent union are rank and file employees qualified to form a
As prayed for by the petitioner, a temporary restraining order was union. In fact their status as rank and file employees was allegedly
issued by this Court on November 7, 1988 restraining the BLR recognized by this Court in the case of Pantranco South Express,
from enforcing and/or carrying out the decision dated September 5, Inc. v. NAMAWU, (G.R. No. 67475, July 30, 1984).
1988 and the order dated October 10, 1988.
The reliance on the Pantranco South Express, Inc. case is
The Labor Code recognizes two (2) principal groups of employees, misplaced. The petition filed by Pantranco South Express Inc.
namely, the managerial and the rank and file groups. Thus, Art. simply asked for a ruling that certain employees were performing
212 (k) of the Code provides: managerial functions. We denied the petition for lack of merit in a
minute resolution. There was absolutely no discussion on the
recognition of another separate rank and file union in addition to
xxx xxx xxx
the existing bargaining unit.
(k) Managerial employee' is one who is vested
There is no conflict. The employees of Philtranco have been
with powers or prerogatives to lay down and
appraised and their functions evaluated. Managers by any name
execute management policies and/or to hire,
may not join the rank and file union. On the other hand, those who
transfer, suspend, lay-off, recall, discharge,
are rank and file workers may join the existing bargaining unit
assign or discipline employees, or to effectively
instead of organizing another bargaining unit and compelling the
recommend such managerial actions. All
employer to deal with it.
employees not falling within this definition are
considered rank and file employees for
purposes of this Book. We are constrained to disallow the formation of another union.
There is no dispute that there exists a labor union in the company,
herein intervenor, the NAMAWU-MIF which is the collective
In implementation of the aforequoted provision of the law, Section
bargaining agent of the rank and file employees in PHILTRANCO.
11 of Rule II, Book V of the Omnibus Rules implementing the
Labor Code did away with existing supervisors' unions classifying
the members either as managerial or rank and file employees Article 2 of the Collective Bargaining Agreement between
depending on the work they perform. If they discharge managerial PHILTRANCO and NAMAWU-MIF under the sub-title Appropriate
functions, supervisors are prohibited from forming or joining any Bargaining Unit provides:
labor organization. If they do not perform managerial work, they
may join the rank and file union and if none exists, they may form Section 1 -The appropriate bargaining unit
one such rank and file organization. This rule was emphasized in covered by this agreement consists of all
the case of Bulletin Publishing Corp. v. Sanchez, (144 SCRA 628 regular rank- and file employees of the
[1986]). company. Managerial, confidential, casuals,
temporary, probationary and contractual
It, therefore, follows that the members of the KASAMA KO who are employees as well as trainees, apprentices,
professional, technical, administrative and confidential personnel of security personnel and foreman are excluded
PHILTRANCO performing managerial functions are not qualified to from the bargaining unit and therefore, not
join, much less form a union. This rationalizes the exclusion of covered by this AGREEMENT. The job
managers and confidential employees exercising managerial description outside the bargaining unit are
functions from the ambit of the collective bargaining unit. As enumerated in the list hereto attached as
correctly observed by Med-Arbiter Adap: Annex '1' and made an integral part hereof
(Emphasis supplied; Rollo, p. 27)
... managerial and confidential employees were
expressly excluded within the operational We see no need for the formation of another union in
ambit of the bargaining unit for the simple PHILTRANCO. The qualified members of the KASAMA KO may
reason that under the law, managers are join the NAMAWU-MIF if they want to be union members, and to
disqualified to be members of a labor be consistent with the one-union, one-company policy of the
organization. Department of Labor and Employment, and the laws it enforces.
As held in the case of General Rubber and Footwear Corp. v.
Bureau of Labor Relations (155 SCRA 283 [1987]):
On the other hand, confidential workers were
not included because either they were
performing managerial functions and/or their ... It has been the policy of the Bureau to
duties and responsibilities were considered or encourage the formation of an employer unit
may be categorized as part and parcel of 'unless circumstances otherwise require. The
management as the primary reason for their proliferation of unions in an employer unit is
exclusion in the bargaining unit. The other discouraged as a matter of policy unless there
categorized employees were likewise not are compelling reasons which would deny a
certain class of employees the right to self- bargaining unit because of its well established
organization for purposes of collective goal towards a single employer wide unit which
bargaining. This case does not fall squarely is more to the broader and greater benefit of
within the exception. (Emphasis supplied). the employees working force.
There are no compelling reasons in this case such as a denial to The philosophy is to avoid fragmentation of the
the KASAMA KO group of the right to join the certified bargaining bargaining unit so as to strengthen the
unit or substantial distinctions warranting the recognition of a employees bargaining power with the
separate group of rank and file workers. Precisely, NAMAWU-MIF management. To do otherwise, would be
intervened to make it clear it has no objections to qualified rank contrary, inimical and repugnant to the
and file workers joining its union. objectives of a strong and dynamic unionism.
Let there be a unified whole rather than a
It is natural in almost all fairly sized companies to have groups of divisive one, let them speak as one in a clear
workers discharging different functions. No company could resonant voice unmarred by dissension
possibly have all employees performing exactly the same work. towards progressive unionism. (Rollo, p. 29)
Variety of tasks is to be expected. It would not be in the interest of
sound labor-management relations if each group of employees WHEREFORE, the decision of the Bureau of Labor Relations,
assigned to a specialized function or section would decide to break dated September 5, 1988 and the Order dated October 10, 1988
away from their fellow-workers and form their own separate are hereby SET ASIDE. The resolution of the Med-Arbiter dated
bargaining unit. We cannot allow one unit for typists and clerks, April 4, 1988 is REINSTATED. The restraining order issued by the
one unit for accountants, another unit for messengers and drivers, Court on November 7, 1988 is made permanent.
and so on in needless profusion. Where shall the line be drawn?
The questioned decision of the public respondent can only lead to SO ORDERED.
confusion, discord and labor strife.
Fernan, C.J.,(Chairman), Feliciano, Bidin and Cortes, JJ.,., concur.
The respondents state that this case is an exception to the general
rule considering that substantial differences exist between the
office employees or professional, technical, administrative and
confidential employees vis-a-vis the field workers or drivers,
conductors and mechanics of the petitioner. Against this
contention, we find that the "substantial differences" in the terms
and conditions of employment between the private respondent's
members and the rest of the company's rank and file employees
are more imagined than real. We agree with the petitioner that the
differences alleged are not substantial or significant enough to
merit the formation of another union.
d.....Was the individual hired abroad Petitioner claims that the point-of-hire classification employed by
specifically to work in the School and was the the School is discriminatory to Filipinos and that the grant of higher
School responsible for bringing that individual salaries to foreign-hires constitutes racial discrimination.
to the Philippines?[2]
The School disputes these claims and gives a breakdown of its
Should the answer to any of these queries point to the Philippines, faculty members, numbering 38 in all, with nationalities other than
the faculty member is classified as a local hire; otherwise, he or Filipino, who have been hired locally and classified as local
she is deemed a foreign-hire. hires.[5]The Acting Secretary of Labor found that these non-Filipino
local-hires received the same benefits as the Filipino local-hires:
The School grants foreign-hires certain benefits not accorded
local-hires. These include housing, transportation, shipping costs, The compensation package given to local-hires has been shown to
taxes, and home leave travel allowance. Foreign-hires are also apply to all, regardless of race. Truth to tell, there are foreigners
who have been hired locally and who are paid equally as Filipino To our mind, these provisions demonstrate the
local hires.[6] parties' recognition of the difference in the
status of two types of employees, hence, the
The Acting Secretary upheld the point-of-hire classification for the difference in their salaries.
distinction in salary rates:
The Union cannot also invoke the equal
The principle "equal pay for equal work" does protection clause to justify its claim of parity. It
not find application in the present case. The is an established principle of constitutional law
international character of the School requires that the guarantee of equal protection of the
the hiring of foreign personnel to deal with laws is not violated by legislation or private
different nationalities and different cultures, covenants based on reasonable classification.
among the student population. A classification is reasonable if it is based on
substantial distinctions and apply to all
members of the same class. Verily, there is a
We also take cognizance of the existence of a
substantial distinction between foreign hires
system of salaries and benefits accorded to
and local hires, the former enjoying only a
foreign hired personnel which system is
limited tenure, having no amenities of their own
universally recognized. We agree that certain
in the Philippines and have to be given a good
amenities have to be provided to these people
compensation package in order to attract them
in order to entice them to render their services
to join the teaching faculty of the School.[7]
in the Philippines and in the process remain
competitive in the international market.
We cannot agree.
Furthermore, we took note of the fact that
foreign hires have limited contract of That public policy abhors inequality and discrimination is beyond
employment unlike the local hires who enjoy contention. Our Constitution and laws reflect the policy against
security of tenure. To apply parity therefore, in these evils. The Constitution[8] in the Article on Social Justice and
wages and other benefits would also require Human Rights exhorts Congress to "give highest priority to the
parity in other terms and conditions of enactment of measures that protect and enhance the right of all
employment which include the employment people to human dignity, reduce social, economic, and political
contract. inequalities." The very broad Article 19 of the Civil Code requires
every person, "in the exercise of his rights and in the performance
of his duties, [to] act with justice, give everyone his due, and
A perusal of the parties' 1992-1995 CBA points
observe honesty and good faith."
us to the conditions and provisions for salary
and professional compensation wherein the
parties agree as follows: International law, which springs from general principles of
law,[9] likewise proscribes discrimination. General principles of law
include principles of equity,[10] i.e., the general principles of fairness
All members of the
and justice, based on the test of what is reasonable.[11] The
bargaining unit shall be
Universal Declaration of Human Rights,[12] the International
compensated only in
Covenant on Economic, Social, and Cultural Rights,[13] the
accordance with Appendix
International Convention on the Elimination of All Forms of Racial
C hereof provided that the
Discrimination,[14] the Convention against Discrimination in
Superintendent of the
Education,[15] the Convention (No. 111) Concerning Discrimination
School has the discretion
in Respect of Employment and Occupation[16] - all embody the
to recruit and hire
general principle against discrimination, the very antithesis of
expatriate teachers from
fairness and justice. The Philippines, through its Constitution, has
abroad, under terms and
incorporated this principle as part of its national laws.
conditions that are
consistent with accepted
international practice. In the workplace, where the relations between capital and labor are
often skewed in favor of capital, inequality and discrimination by
the employer are all the more reprehensible.
Appendix C of said CBA further provides:
The States Parties to the present Covenant While we recognize the need of the School to attract foreign-hires,
recognize the right of everyone to the salaries should not be used as an enticement to the prejudice of
enjoyment of just and favourable conditions of local-hires. The local-hires perform the same services as foreign-
work, which ensure, in particular: hires and they ought to be paid the same salaries as the latter. For
the same reason, the "dislocation factor" and the foreign-hires'
limited tenure also cannot serve as valid bases for the distinction in
a.....Remuneration which provides all workers,
salary rates. The dislocation factor and limited tenure affecting
as a minimum, with:
foreign-hires are adequately compensated by certain benefits
accorded them which are not enjoyed by local-hires, such as
i.....Fair wages and equal housing, transportation, shipping costs, taxes and home leave
remuneration for work of travel allowances.
equal value without
distinction of any kind, in
The Constitution enjoins the State to "protect the rights of workers
particular women being
and promote their welfare,"[25] "to afford labor full
guaranteed conditions of
protection."[26] The State, therefore, has the right and duty to
work not inferior to those
regulate the relations between labor and capital.[27] These relations
enjoyed by men, with equal
are not merely contractual but are so impressed with public interest
pay for equal work;
that labor contracts, collective bargaining agreements included,
must yield to the common good.[28] Should such contracts contain
x x x. stipulations that are contrary to public policy, courts will not
hesitate to strike down these stipulations.
The foregoing provisions impregnably institutionalize in this
jurisdiction the long honored legal truism of "equal pay for equal In this case, we find the point-of-hire classification employed by
work." Persons who work with substantially equal qualifications, respondent School to justify the distinction in the salary rates of
skill, effort and responsibility, under similar conditions, should be foreign-hires and local hires to be an invalid classification. There is
paid similar salaries.[22] This rule applies to the School, its no reasonable distinction between the services rendered by
"international character" notwithstanding. foreign-hires and local-hires. The practice of the School of
according higher salaries to foreign-hires contravenes public policy
The School contends that petitioner has not adduced evidence that and, certainly, does not deserve the sympathy of this Court.
local-hires perform work equal to that of foreign-hires.[23] The Court
finds this argument a little cavalier. If an employer accords We agree, however, that foreign-hires do not belong to the same
employees the same position and rank, the presumption is that bargaining unit as the local-hires.
these employees perform equal work. This presumption is borne
by logic and human experience. If the employer pays one
A bargaining unit is "a group of employees of a given employer,
employee less than the rest, it is not for that employee to explain
comprised of all or less than all of the entire body of employees,
why he receives less or why the others receive more. That would
consistent with equity to the employer indicate to be the best suited
be adding insult to injury. The employer has discriminated against
to serve the reciprocal rights and duties of the parties under the
that employee; it is for the employer to explain why the employee
collective bargaining provisions of the law."[29] The factors in
is treated unfairly.
determining the appropriate collective bargaining unit are (1) the
will of the employees (Globe Doctrine); (2) affinity and unity of the
The employer in this case has failed to discharge this burden. employees' interest, such as substantial similarity of work and
There is no evidence here that foreign-hires perform 25% more duties, or similarity of compensation and working conditions
efficiently or effectively than the local-hires. Both groups have (Substantial Mutual Interests Rule); (3) prior collective bargaining
similar functions and responsibilities, which they perform under history; and (4) similarity of employment status.[30] The basic test of
similar working conditions. an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all
The School cannot invoke the need to entice foreign-hires to leave employees the exercise of their collective bargaining rights. [31]
their domicile to rationalize the distinction in salary rates without
violating the principle of equal work for equal pay. It does not appear that foreign-hires have indicated their intention
to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also
shows that these groups were always treated separately. Foreign-
hires have limited tenure; local-hires enjoy security of tenure.
Although foreign-hires perform similar functions under the same
working conditions as the local-hires, foreign-hires are accorded
certain benefits not granted to local-hires. These benefits, such as
housing, transportation, shipping costs, taxes, and home leave
travel allowance, are reasonably related to their status as foreign-
hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not
assure either group the exercise of their respective collective
bargaining rights.
SO ORDERED.
G.R. No. 101730 June 17, 1993 these supervisory employees, including samples of memoranda
and notices they made which purportedly illustrate their excercise
PHILIPPINE TELEGRAPH AND TELEPHONE of management prerogatives. On 31 May 1991, petitioner
CORPORATION, petitioner, submitted more job descriptions to further bolster its contention.
vs.
HON. BIENVENIDO E. LAGUESMA and PT & T SUPERVISORY On 11 June 1991, the Acting Secretary of Labor and Employment
EMPLOYEES UNION-APSOTEU, respondents. Nieves R. Confesor denied petitioner's appeal for lack of merit.
However, she did not rule on the additional evidence presented by
Leonard U. Sawal for private respondent. 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
BELLOSILLO, J.:
On 15 August 1991, respondent Undersecretary of Labor and
Employment Bienvenido E. Laguesma denied reconsideration of
Can a petition for certification election filed by supervisory the resolution dismissing the appeal. Hence, the instant petition
employees of an unorganized establishment — one without a anchored on the ground that public respondent committed grave
certified bargaining agent — be dismissed on the ground that abuse of discretion in failing to rule on the additional evidence
these employees are actually performing managerial functions? submitted by petitioner which would have buttressed its contention
that there were no supervisory employees in its employ and which,
This is the issue for reconsideration in this petition as a consequence, would have barred the holding of a certification
for certiorari and mandamus, with prayer for the issuance of a election.
temporary restraining order, of
the Resolution of 11 June 1991 1 of then Acting Secretary of Labor The petition is devoid of merit.
and Employment Nieves D. Confesor dismissing the appeal from
the Order of 11 December 1990 2 of the Med-Arbiter which granted
The applicable provision of law in the case at bar is Art. 257 of the
the petition for certification election, and of the Order of 15 August
Labor Code. It reads —
1991 3 denying reconsideration.
What PT&T should have done was to question the inclusion of any Cruz, Griño-Aquino and Quiason, JJ., concur.
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.
ASSOCIATED LABOR UNIONS (ALU)-TUCP, Petitioners, v. On November 3, 1986, petitioner filed a notice of strike (Rollo, p.
HON. CRESENCIANO B. TRAJANO, as Officer-In-Charge of 27). Failing to arrive at an agreement during the conciliation
the Bureau of Labor Relations, ASSOCIATION OF following the filing of the notice of strike, on December 1, 1986
DEMOCRATIC LABOR ORGANIZATION (ADLO) and MITSUMI petitioner went on strike.
PHILIPPINES, INC., Respondents.
Meanwhile, on November 4, 1986 private respondent Union,
Romeo S. Occeña for Petitioner. Association of Democratic Labor Organization (ADLO) file with the
Ministry of Labor and Employment, Panlalawigang Tanggapan ng
Banzuela, Flores, Miralles, Raneses, Sy, Taquio and Paggawa, Bataan Export Processing Zone, a verified petition for
Associates for private respondent ADLO. certification election among the regular rank and file workers of
private company, docketed as Case No. BZED-CE-11-011-86
The Solicitor General for public Respondent. (Rollo, p. 87).
The Bureau shall conduct a certification Narvasa, Gancayco and Medialdea, JJ., concur.
election within twenty (20) days in accordance
with the rules and regulations prescribed by Cruz, J., took no part.
the Secretary of Labor.
[G.R. No. 107792. March 2, 1998] 3. No union
Assailed under Rule 65 of the Rules of Court are the "We disagree with petitioner's contention. The rule cited by the
Resolution and Order[1] of the public respondent, dated June 28, petitioner, Sec. 2, Rule V, Book V, sub-paragraphs A, B, C, D, E, F
1996 and November 18, 1996, respectively, dismissing petitioner's and G, refers to an independently registered labor organization
petition for certification election. which has filed a petition for certification election.
It appears that petitioner Samahan ng mga Manggagawa sa "In the case at bar, an independently registered union has affiliated
Filsystems (SAMAFIL-NAFLU-KMU) is a registered labor union with a federation, hence, strict compliance with the requirements
with Certificate of Registration No. NCR-UR-10-1575-95 issued by embodied in Sec. 3, paragraphs A, B and E of Rule II, Book V of
the Department of Labor and Employment (DOLE) on October 25, the Rules and Regulations implementing the Labor Code should
1995. On November 6, 1995, petitioner union filed a Petition for be complied with.
Certification Election among the rank-and-file employees of private
respondent FILSYSTEMS, Inc. before the DOLE - National Capital
"Record discloses that petitioner has not shown to have executed
Region (NCR).[2] Attached as annexes to the petition are the
a contract or agreement of affiliation nor has it established that is
Certificate of Registration issued by the DOLE, copies of union
has submitted its charter certificate to the Bureau of Labor
membership signed by thirty three (33) rank-and-file employees of
Relations (BLR) within thirty (30) days from its execution.
respondent company, the Charter Certificate showing its affiliation
with the National Federation of Labor Unions (NAFLU-KMU), the
list of union officers, the certification of the union secretary of the "Thus, petitioner in this case having failed to comply with the
minutes of the general membership meeting, the Books of mandatory requirement, there was no valid
Accounts and its Constitution and By-Laws.[3] affiliation. Consequently, petitioner has no legal personality
because the union failed to attain the status of legitimacy for failure
Private respondent opposed the petition. It questioned the to comply with the requirements of law."
status of petitioner as a legitimate labor organization on the ground
of lack of proof that its contract of affiliation with the NAFLU- Petitioner appealed to the Office of the Secretary of Labor
KMU has been submitted to the Bureau of Labor Relations (BLR) and Employment. It reiterated its contention that as an
within thirty (30) days from its execution.[4] independently registered union, it has the right to file a petition for
In reply, petitioner averred that as a duly registered labor certification election regardless of its failure to prove its affiliation
union, it has "all the rights and privileges x x x to act as with NAFLU-KMU.[7]
representative of its members for the purpose of collective On February 26, 1996, private respondent opposed the
bargaining with employers."[5] appeal. It argued that petitioner should have filed its petition for
On January 12, 1996, Med-Arbiter Paterno D. Adap certification election as an independently registered union and not
dismissed the petition for certification election. He ruled that as a union affiliated with NAFLU-KMU.[8]
petitioner, as an affiliate of NAFLU-KMU, has no legal personality Meanwhile or on February 7, 1996, another union, the
on account of its failure to comply with paragraphs (a), (b) and (e) Filsystem Workers Union (FWU), filed a Petition for Certification
of Section 3, Rule II of the Implementing Rules of Book V of the Election in the same bargaining unit. On March 22, 1996, the Med-
Labor Code,[6] viz: Arbitration - NCR Branch granted the petition. The certification
election held on April 19, 1996, was won by FWU which garnered
"x x x twenty six (26) votes out of the forty six (46) eligible voters. The
FWU was certified on April 29, 1996, as the exclusive bargaining
"In matters of affiliation of an independently registered union, the agent of all rank-and-file employees of private
rules provide that the latter shall be considered an affiliate of a respondent. Eventually, FWU and the private respondent
labor federation after submission of the contract or agreement of negotiated a CBA.[9]
affiliation to the Bureau of Labor Relations (BLR) within thirty (30)
On June 11, 1996, the private respondent filed a Motion to
days after its execution.
Dismiss Appeal of petitioner as it has become moot and
academic. It also invoked Section 3, Rule V of the Implementing
"Likewise, it mandates the federation or national union concerned Rules of Book V of the Labor Code stating that "once a union has
to issue a charter certificate indicating the creation or been certified, no certification election may be held within one (1)
establishment of a local or chapter, copy of which shall be year from the date of issuance of a final certification election
submitted to the Bureau of Labor Relations within thirty (30) days [result]."[10]
from issuance of such certificate.
In opposing the Motion to Dismiss Appeal, petitioner
"A close examination of the records of the case does not reveal contended that its appeal is not moot as the certification election
that the federation and the independent union have executed a held on April 19, 1996, was void for violating Section 10, Rule V of
contract or agreement of affiliation, nor had it shown that it has the Implementing Rules of Book V of the Labor Code,[11] viz:
"SEC. 10. Decision of the Secretary final and inappealable. - The interests independently of the federation.[15] In fine, the Med-Arbiter
Secretary shall have fifteen (15) calendar days within which to erred in dismissing petitioner's petition for certification election on
decide the appeal from receipt of the records of the case. The filing account of its non-submission of the charter certificate and the
of the appeal from the decision of the Med-Arbiter stays the contract of affiliation with the NAFLU-KMU with the BLR. The
holding of any certification election. The decision of the Secretary public respondent gravely abused his discretion in sustaining the
shall be final and inappealable." Med-Arbiter's Resolution.
II
Petitioner further argued that the CBA executed between the
FWU and the private respondent could not affect its pending We shall now resolve the issue of whether the appeal filed by
representation case following Section 4, Rule V of the the petitioner was rendered moot and academic by the subsequent
Implementing Rules of Book V of the Labor Code[12] which states: certification election ordered by the Med-Arbiter, won by the FWU
and which culminated in a CBA with private respondent.
"SEC. 4. Effects of early agreements. - The representation case
Public respondent's ruling is anchored on his finding that
shall not, however, be adversely affected by a collective
there exists no pending representation case since the petition for
bargaining agreement registered before or during the last 60 days
certification election filed by the petitioner was dismissed by the
of the subsisting agreement or during the pendency of the
Med-Arbiter. According to the public respondent, the legal effect of
representation case."
the dismissal of the petition was to leave the playing field open
without any legal barrier or prohibition to any petitioner; thus, other
On June 28, 1996, respondent Secretary dismissed the legitimate labor organizations may file an entirely new petition for
appeal interposed by petitioner on the ground that it has been certification election.
rendered moot by the certification of FWU as the sole and
exclusive bargaining agent of the rank-and-file workers of We reject public respondent's ruling. The order of the Med-
respondent company. Petitioner's Motion for Reconsideration was Arbiter dismissing petitioner's petition for certification election was
denied in an Order dated November 18, 1996.[13] seasonably appealed. The appeal stopped the holding of any
certification election. Section 10, Rule V of the Implementing
Before this Court, petitioner contends: Rules of Book V of the Labor Code is crystal clear and hardly
needs any interpretation.
I
Accordingly, there was an unresolved representation case at
the time the CBA was entered between FWU and private
Public respondent acted with grave abuse of discretion amounting respondent. Following Section 4, Rule V of the Implementing
to acting without or in excess of jurisdiction in holding that the Rules of Book V of the Labor Code, such CBA cannot and will not
pending appeal in the representation case was rendered moot and prejudice petitioner's pending representation case or render the
academic by a subsequently enacted collective bargaining same moot.[16] This rule was applied in the case ofAssociated
agreement in the company. Labor Unions (ALU-TUCP) v. Trajano[17] where we held that
"[t]here should be no obstacle to the right of the employees to
II petition for a certification election at the proper time, that is, within
sixty (60) days prior to the expiration of the life of a certified
Public respondent committed a serious legal error and gravely collective bargaining agreement x x x, not even by a collective
abused its discretion in failing to hold that the legal personality of agreement submitted during the pendency of the representation
petitioner as a union having been established by its Certificate of case." Likewise, in Associated Labor Unions (ALU) v. Ferrer-
Registration, the same could not be subjected to collateral attack. Calleja,[18] we held that a prematurely renewed CBA is not a bar to
the holding of a certification election.
The petition is meritorious. Finally, we bewail private respondent's tenacious opposition
I to petitioner's certification election petition. Such a stance is not
conducive to industrial peace. Time and again, we have
We shall first resolve whether the public respondent emphasized that when a petition for certification election is filed by
committed grave abuse of discretion when he effectively affirmed a legitimate labor organization, it is good policy for the employer
the Resolution dated January 12, 1996 of the Med-Arbiter not to have any participation or partisan interest in the choice of
dismissing petitioner's petition for certification election for failure to the bargaining representative. While employers may rightfully be
prove its affiliation with NAFLU-KMU. notified or informed of petitions of such nature, they should not,
however, be considered parties thereto with an inalienable right to
The reasoning of the public respondent and the Med- Arbiter
oppose it. An employer that involves itself in a certification election
is flawed, proceeding as it does from a wrong premise. Firstly, it
lends suspicion to the fact that it wants to create a company
must be underscored that petitioner is an independently registered
union. Thus, in Consolidated Farms, Inc. II v. Noriel,[19] we
labor union as evidenced by a Certificate of Registration issued by
declared that "[o]n a matter that should be the exclusive concern of
the DOLE. As a legitimate labor organization, petitioner's right to
labor, the choice of a collective bargaining representative, the
file a petition for certification election on its own is beyond
employer is definitely an intruder. His participation, to say the
question.[14] Secondly, the failure of petitioner to prove its affiliation
least, deserves no encouragement. This Court should be the last
with NAFLU-KMU cannot affect its right to file said petition for
agency to lend support to such an attempt at interference with a
certification election as an independent union. At the most,
purely internal affair of labor. x x x [While] it is true that there may
petitioner's failure will result in an ineffective affiliation with NAFLU-
be circumstances where the interest of the employer calls for its
KMU. Still, however, it can pursue its petition for certification
being heard on the matter, x x x sound policy dictates that as much
election as an independent union. In our rulings, we have stressed
as possible, management is to maintain a strictly hands-off
that despite affiliation, the local union remains the basic unit free to
policy. For if it does not, it may lend itself to the legitimate
serve the common interest of all its members and pursue its own
suspicion that it is partial to one of the contending unions. That is
repugnant to the concept of collective bargaining. That is against
the letter and spirit of welfare legislation intended to protect labor
and promote social justice. The judiciary then should be the last to
look with tolerance at such efforts of an employer to take part in
the process leading to the free and untrammeled choice of the
exclusive bargaining representative of the workers."
IN VIEW WHEREOF, the instant petition is GRANTED. The
assailed Resolution and Order of the public respondent are set
aside. The Bureau of Labor Relations is ORDERED to hold a
certification election in respondent company with petitioner as a
contending union. No costs.
SO ORDERED.
Regalado (Chairman), Mendoza and Martinez, JJ., concur.
Melo, J., on leave.
case, the mere allegation of respondent-appellee that there are
about 42 supervisory employees in the proposed bargaining unit
should have not caused the dismissal of the instant petition. Said
[G.R. No. 121084. February 19, 1997] issue could very well be taken cared of during the pre-election
conference where inclusion/exclusion proceedings will be
conducted to determine the list of eligible voters.[7]
TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner, Not satisfied with the decision of the Office of the Secretary
vs. TOYOTA MOTOR PHILIPPINES CORPORATION of Labor, petitioner filed a Motion for Reconsideration of the
LABOR UNION AND THE SECRETARY OF LABOR Resolution of March 3, 1993, reiterating its claim that as of the date
AND EMPLOYMENT, respondents. of filing of petition for certification election, respondent TMPCLU
had not yet acquired the status of a legitimate labor organization
DECISION as required by the Labor Code, and that the proposed bargaining
unit was inappropriate.
KAPUNAN, J.:
Acting on petitioner's motion for reconsideration, the public
respondent, on July 13, 1994 set aside its earlier resolution and
On November 26, 1992, the Toyota Motor Philippines remanded the case to the Med-Arbiter concluding that the issues
Corporation Labor Union (TMPCLU) filed a petition for certification
raised by petitioner both on appeal and in its motion for
election with the Department of Labor, National Capital Region, for reconsideration were factual issues requiring further hearing and
all rank-and-file employees of the Toyota Motor Corporation.[1] production of evidence.[8] The Order stated:
In response, petitioner filed a Position Paper on February 23,
1993 seeking the denial of the issuance of an Order directing the We carefully re-examined the records vis-a-vis the arguments
holding of a certification election on two grounds: first, that the raised by the movant, and we note that movant correctly pointed
respondent union, being "in the process of registration" had no out that petitioner submitted a copy of its certificate of
legal personality to file the same as it was not a legitimate labor registration for the first time on appeal and that in its petition,
organization as of the date of the filing of the petition; and second, petitioner alleges that it is an independent organization which is in
that the union was composed of both rank-and-file and supervisory the process of registration." Movant strongly argues that the
employees in violation of law.[2] Attached to the position paper was foregoing only confirms what it has been pointing out all along, that
a list of union members and their respective job classifications, at the time the petition was filed petitioner is (sic) not yet the holder
indicating that many of the signatories to the petition for of a registration certificate; that what was actually issued on 24
certification election occupied supervisory positions and were not November 1992 or two (2) days before the filing of the petition was
in fact rank-and-file employees.[3] an official receipt of payment for the application fee; and, that the
date appearing in the Registration certificate which is November
The Med-Arbiter, Paterno D. Adap, dismissed respondent 24, 1992 is not the date when petitioner was actually registered,
union's petition for certification election for lack of merit. In his but the date when the registration certificate was prepared by the
March 8, 1993 Order, the Med-Arbiter found that the labor processor. Movant also ratiocinates that if indeed petitioner has
organization's membership was composed of supervisory and been in possession of the registration certificate at the time this
rank-and-file employees in violation of Article 245 of the Labor petition was filed on November 26, 1992, it would have attached
Code,[4] and that at the time of the filing of its petition, respondent the same to the petition.
union had not even acquired legal personality yet.[5]
On appeal, the Office of the Secretary of Labor, in a The foregoing issues are factual ones, the resolution of which is
Resolution[6] dated November 9, 1993 signed by Undersecretary crucial to the petition. For if indeed it is true that at the time of filing
Bienvenido E. Laguesma, set aside the Med-Arbiter's Order of of the petition, the said registration certificate has not been
March 3, 1993, and directed the holding of a certification election approved yet, then, petitioner lacks the legal personality to file the
among the regular rank-and-file employees of Toyota Motor petition and the dismissal order is proper. Sadly, we can not
Corporation. In setting aside the questioned Order, the Office of resolve the said questions by merely perusing the records. Further
the Secretary contended that: hearing and introduction of evidence are required. Thus, there is a
need to remand the case to the Med-Arbiter solely for the purpose.
Contrary to the allegation of herein respondent-appellee,
petitioner-appellant was already a legitimate labor organization at WHEREFORE, the motion is hereby granted and our Resolution is
the time of the filing of the petition on 26 November 1992. Records hereby set aside. Let the case be remanded to the Med-Arbiter for
show that on 24 November 1992 or two (2) days before the filing of the purpose aforestated.
the said petition, it was issued a certificate of registration.
SO ORDERED.[9]
We also agree with petitioner-appellant that the Med-Arbiter should
have not dismissed the petition for certification election based on Pursuant to the Order, quoted above, Med-Arbiter Brigida C.
the ground that the proposed bargaining unit is a mixture of Fodrigon submitted her findings on September 28, 1994, stating
supervisory and rank-and-file employees, hence, violative of Article the following:[10]
245 of the Labor Code as amended.
[T]he controvertible fact is that petitioner could not have been
A perusal of the petition and the other documents submitted by issued its Certificate of Registration on November 24, 1992 when it
petitioner-appellant will readily show that what the former really applied for registration only on November 23, 1992 as shown by
seeks to represent are the regular rank-and-file employees in the the official receipt of payment of filing fee. As Enrique Nalus, Chief
company numbering about 1,800 more or less, a unit which is LEO, this office, would attest in his letter dated September 8, 1994
obviously appropriate for bargaining purposes. This being the
addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of from joining labor organizations consisting of rank-and-file
Respondent company, in response to a query posed by the latter, employees as the concerns which involve members of either group
"It is unlikely that an application for registration is approved on the are normally disparate and contradictory. Article 245 provides:
date that it is filed or the day thereafter as the processing course
has to pass thought routing, screening, and assignment, ART. 245 Ineligibility of managerial employees to join any labor
evaluation, review and initialing, and approval/disapproval organization; right of supervisory employees. -- Managerial
procedure, among others, so that a 30-day period is provided for Employees are not eligible to join, assist or form any labor
under the Labor Code for this purpose, let alone opposition thereto organization. Supervisory employees shall not be eligible for
by interested parties which must be also given due course." membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their
Another evidence which petitioner presented . . . is the "Union own.
Registration 1992 Logbook of IRD" . . . and the entry date
November 25, 1992 as allegedly the date of the release of the Clearly, based on this provision, a labor organization
registration certificate . . . On the other hand, respondent company composed of both rank-and-file and supervisory employees is no
presented . . . a certified true copy of an entry on page 265 of the labor organization at all. It cannot, for any guise or purpose, be a
Union Registration Logbook showing the pertinent facts about legitimate labor organization. Not being one, an organization which
petitioner but which do not show the petitioner's registration was carries a mixture of rank-and-file and supervisory employees
issued on or before November 26, 1992.[11] cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the
Further citing other pieces of evidence presented before her, purpose of collective bargaining. It becomes necessary,
the Med-Arbiter concluded that respondent TMPCLU could not therefore, anterior to the granting of an order allowing a
have "acquire[d] legal personality at the time of the filing of (its) certification election, to inquire into the composition of any labor
petition."[12] organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.
On April 20, 1996, the public respondent issued a new
Resolution, "directing the conduct of a certification election among It is the petitioner's contention that forty-two (42) of the
the regular rank-and-file employees of the Toyota Motor respondent union's members, including three of its officers, occupy
Philippines Corporation.[13] Petitioner's motion for reconsideration supervisory positions.[19] In its position paper dated February 22,
was denied by public respondent in his Order dated July 14, 1993, petitioner identified fourteen (14) union members occupying
1995.[14] the position of Junior Group Chief II[20] and twenty-seven (27)
members in level five positions. Their respective job-descriptions
Hence, this special civil action for certiorari under Rule 65 of are quoted below:
the Revised Rules of Court, where petitioner contends that "the
Secretary of Labor and Employment committed grave abuse of
discretion amounting to lack or excess of jurisdiction in reversing, LEVEL 4 (JUNIOR GROUP CHIEF II) — He is responsible for all
contrary to law and facts the findings of the Med-Arbiters to the operators and assigned stations, prepares production reports
effect that: 1) the inclusion of the prohibited mix of rank-and file related to daily production output. He oversees smooth flow of
and supervisory employees in the roster of members and officers production, quality of production, availability of manpower, parts
of the union cannot be cured by a simple inclusion-exclusion and equipments. He also coordinates with other sections in the
proceeding; and that 2) the respondent union had no legal Production Department.
standing at the time of the filing of its petition for certification
election.[15] LEVEL 5 — He is responsible for overseeing initial production of
new models, prepares and monitors construction schedules for
We grant the petition. new models, identifies manpower requirements for production,
facilities and equipment, and lay-out processes. He also oversees
The purpose of every certification election is to determine the
other sections in the production process (e.g. assembly, welding,
exclusive representative of employees in an appropriate bargaining
painting)." (Annex "V" of Respondent TMP's Position Paper, which
unit for the purpose of collective bargaining. A certification election
is the Job Description for an Engineer holding Level 5 position in
for the collective bargaining process is one of the fairest and most
the Production Engineering Section of the Production Planning and
effective ways of determining which labor organization can truly
Control Department).
represent the working force.[16] In determining the labor
organization which represents the interests of the workforce, those
interests must be, as far as reasonably possible, homogeneous, so While there may be a genuine divergence of opinion as to
as to genuinely reach the concerns of the individual members of a whether or not union members occupying Level 4 positions are
labor organization. supervisory employees, it is fairly obvious, from a reading of the
Labor Code's definition of the term that those occupying Level 5
According to Rothenberg,[17] an appropriate bargaining unit is positions are unquestionably supervisory employees. Supervisory
a group of employees of a given employer, composed of all or less employees, as defined above, are those who, in the interest of the
than the entire body of employees, which the collective interests of employer, effectively recommend managerial actions if the
all the employees, consistent with equity to the employer indicate exercise of such authority is not merely routinary or clerical in
to be best suited to serve reciprocal rights and duties of the parties nature but require the use of independent judgment.[21] Under the
under the collective bargaining provisions of law. In Belyca job description for level five employees, such personnel — all
Corporation v. Ferrer Calleja,[18] we defined the bargaining unit as engineers — having a number of personnel under them, not only
"the legal collectivity for collective bargaining purposes whose oversee production of new models but also determine manpower
members have substantially mutual bargaining interests in terms requirements, thereby influencing important hiring decisions at the
and conditions of employment as will assure to all employees their highest levels. This determination is neither routine nor clerical but
collective bargaining rights." This in mind, the Labor Code has involves the independent assessment of factors affecting
made it a clear statutory policy to prevent supervisory employees production, which in turn affect decisions to hire or transfer
workers. The use of independent judgment in making the decision
to hire, fire or transfer in the identification of manpower
requirements would be greatly impaired if the employee's loyalties
are torn between the interests of the union and the interests of
management. A supervisory employee occupying a level five
position would therefore find it difficult to objectively identify the
exact manpower requirements dictated by production demands.
This is precisely what the Labor Code, in requiring separate
unions among rank-and-file employees on one hand, and
supervisory employees on the other, seeks to avoid. The rationale
behind the Code's exclusion of supervisors from unions of rank-
and-file employees is that such employees, while in the
performance of supervisory functions, become the alter ego of
management in the making and the implementing of key decisions
at the sub-managerial level. Certainly, it would be difficult to find
unity or mutuality of interests in a bargaining unit consisting of a
mixture of rank-and-file and supervisory employees. And this is so
because the fundamental test of a bargaining unit's acceptability is
whether or not such a unit will best advance to all employees
within the unit the proper exercise of their collective bargaining
rights.[22] The Code itself has recognized this, in preventing
supervisory employees from joining unions of rank-and-file
employees.
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.
The foregoing discussion, therefore, renders entirely
irrelevant, the technical issue raised as to whether or not
respondent union was in possession of the status of a legitimate
labor organization at the time of filing, when, as petitioner
vigorously claims, the former was still at the stage of processing of
its application for recognition as a legitimate labor organization.
The union's composition being in violation of the Labor Code's
prohibition of unions composed of supervisory and rank-and-file
employees, it could not possess the requisite personality to file for
recognition as a legitimate labor organization. In any case, the
factual issue, albeit ignored by the public respondent's assailed
Resolution, was adequately threshed out in the Med-Arbiter's
September 28, 1994 Order.
The holding of a certification election is based on clear
statutory policy which cannot be circumvented.[23] Its rules, strictly
construed by this Court, are designed to eliminate fraud and
manipulation. As we emphasized in Progressive Development
Corporation v. Secretary, Department of Labor and
Employment,[24] the Court's conclusion should not be interpreted as
impairing any union's right to be certified as the employees'
bargaining agent in the petitioner's establishment. Workers of an
appropriate bargaining unit must be allowed to freely express their
choice in an election where everything is open to sound judgment
and the possibility for fraud and misrepresentation is absent.[25]
WHEREFORE, the petition is GRANTED. The assailed
Resolution dated April 20, 1995 and Order dated July 14, 1995 of
respondent Secretary of Labor are hereby SET ASIDE. The Order
dated September 28, 1994 of the Med-Arbiter is REINSTATED.
SO ORDERED.
Padilla, (Chairman), Bellosillo, Vitug, and Hermosisima, Jr.,
JJ., concur.
[ G . R . No . 118915 . February 4 , 1997 ] registration of respondent union and declared that it was not only a
bona fide affiliate or local of a federation (AFW), but a duly
CAL CENTER ALLIANCE OF CONCERNED registered union as well. Subsequently, this case reached this
EMPLOYEES UNIFIED FILIPINO SERVICE Court in Capitol Medical Center, Inc. v. Hon. Perlita Velasco,
WORKERS, (CMC – ACE- G.R. No. 110718, where we issued a Resolution dated December
UFSW) , petitioners, vs. HON. BIENVENIDO 13, 1993, dismissing the petition of CMC for failure to sufficiently
E. LAGUESMA, Undersecretary of the Department of show that public respondent committed grave abuse of
Labor and Employment; CAPITOL MEDICAL CENTER discretion. The motion for reconsideration filed by CMC was
EMPLOYEES ASSOCIATION - ALLIANCE OF FILIPINO likewise denied in our Resolution dated February
WORKERS AND CAPITOL MEDICAL CENTER 2, 1994. Thereafter, on March 23, 1994, we issued an entry of
INCORPORATED AND DRA.THELMA CLEMENTE, judgment certifying that the Resolution dated December 13, 1993
President, respondents . has become final and executory.