Factual Antecedents

January 25, 2016
G.R. No. 201595
ALLAN M. MENDOZA, Petitioner,
vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU), namely, EDUARDO B.
BORELA, BUENAVENTURA QUEBRAL, ELIZABETH COMETA, ALEJANDRO TORRES,
AMORSOLO TIERRA, SOLEDAD YEBAN, LUIS RENDON, VIRGINIA APILADO, TERESITA
BOLO, ROGELIO BARBERO, JOSE CASAÑAS, ALFREDO MAGA, EMILIO FERNANDEZ,
ROSITA BUENA VENTURA, ALMENIO CANCINO, ADELA IMANA, MARIO MANCENIDO,
WILFREDO MANDILAG, ROLANDO MANLAP AZ, EFREN MONTEMAYOR, NELSON
PAGULAYAN, CARLOS VILLA, RIC BRIONES, and CHITO BERNARDO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the April 24, 2012 Decision of the Court of Appeals
1 2
(CA) which dismissed the Petition for Certiorari in CA-G.R. SP No. 115639.
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Factual Antecedents
Petitioner was a member of the Manila Water Employees Union (MWEU), a Department of Labor
and Employment (DOLE)-registered labor organization consisting of rank-and-file employees within
Manila Water Company (MWC). The respondents herein named – Eduardo B. Borela (Borela),
Buenaventura Quebral (Quebral), Elizabeth Cometa (Cometa), Alejandro Torres (Torres), Amorsolo
Tierra (Tierra), Soledad Yeban (Yeban), Luis Rendon (Rendon), Virginia Apilado (Apilado), Teresita
Bolo (Bolo), Rogelio Barbero (Barbero), Jose Casañas (Casañas), Alfredo Maga (Maga), Emilio
Fernandez (Fernandez), Rosita Buenaventura (Buenaventura), Almenio Cancino (Cancino), Adela
Imana, Mario Mancenido (Mancenido), Wilfredo Mandilag (Mandilag), Rolando Manlapaz
(Manlapaz), Efren Montemayor (Montemayor), Nelson Pagulayan, Carlos Villa, Ric Briones, and
Chito Bernardo – were MWEU officers during the period material to this Petition, with Borela as
President and Chairman of the MWEU Executive Board, Quebral as First Vice-President and
Treasurer, and Cometa as Secretary. 4
In an April 11, 2007 letter, MWEU through Cometa informed petitioner that the union was unable to
5
fully deduct the increased P200.00 union dues from his salary due to lack of the required December
2006 check-off authorization from him. Petitioner was warned that his failure to pay the union dues
would result in sanctions upon him. Quebral informed Borela, through a May 2, 2007 letter, that for
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such failure to pay the union dues, petitioner and several others violated Section 1(g), Article IX of
the MWEU’s Constitution and By-Laws. In turn, Borela referred the charge to the MWEU grievance
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committee for investigation.
On May 21, 2007, a notice of hearing was sent to petitioner, who attended the scheduled hearing.
On June 6, 2007, the MWEU grievance committee recommended that petitioner be suspended for
30 days.
In a June 20, 2007 letter, Borela informed petitioner and his corespondents of the MWEU Executive
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Board’s "unanimous approval" of the grievance committee’s recommendation and imposition upon
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them of a penalty of 30 days suspension, effective June 25, 2007.

In a June 26, 2007 letter to Borela, petitioner and his co-respondents took exception to the
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imposition and indicated their intention to appeal the same to the General Membership Assembly in
accordance with Section 2(g), Article V of the union’s Constitution and By-Laws, which grants them
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the right to appeal any arbitrary resolution, policy and rule promulgated by the Executive Board to
the General Membership Assembly. In a June 28, 2007 reply, Borela denied petitioner’s appeal,
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stating that the prescribed period for appeal had expired.
Petitioner and his co-respondents sent another letter on July 4, 2007, reiterating their arguments
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and demanding that the General Membership Assembly be convened in order that their appeal could
be taken up. The letter was not acted upon.
Petitioner was once more charged with non-payment of union dues, and was required to attend an
August 3, 2007 hearing. Thereafter, petitioner was again penalized with a 30-day suspension
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through an August 21, 2007 letter by Borela informing petitioner of the Executive Board’s
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"unanimous approval" of the grievance committee recommendation to suspend him effective
16
August 24, 2007, to which he submitted a written reply, invoking his right to appeal through the
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convening of the General Membership Assembly. However, the respondents did not act on
petitioner’s plea.
Meanwhile, MWEU scheduled an election of officers on September 14, 2007. Petitioner filed his
certificate of candidacy for Vice-President, but he was disqualified for not being a member in good
standing on account of his suspension.
On October 2, 2007, petitioner was charged with non-payment of union dues for the third time. He
did not attend the scheduled hearing. This time, he was meted the penalty of expulsion from the
union, per "unanimous approval" of the members of the Executive Board. His pleas for an appeal to
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the General Membership Assembly were once more unheeded. 19
In 2008, during the freedom period and negotiations for a new collective bargaining agreement
(CBA) with MWC, petitioner joined another union, the Workers Association for Transparency,
Empowerment and Reform, All-Filipino Workers Confederation (WATER-AFWC). He was elected
union President. Other MWEU members were inclined to join WATER-AFWC, but MWEU director
Torres threatened that they would not get benefits from the new CBA. 20
The MWEU leadership submitted a proposed CBA which contained provisions to the effect that in
the event of retrenchment, non-MWEU members shall be removed first, and that upon the signing of
the CBA, only MWEU members shall receive a signing bonus. 21
Ruling of the Labor Arbiter
On October 13, 2008, petitioner filed a Complaint against respondents for unfair labor practices,
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damages, and attorney’s fees before the National Labor Relations Commission (NLRC), Quezon
City, docketed as NLRC Case No. NCR-10-14255-08. In his Position Paper and other written
submissions, petitioner accused the respondents of illegal termination from MWEU in connection
23
with the events relative to his non-payment of union dues; unlawful interference, coercion, and
violation of the rights of MWC employees to self-organization – in connection with the proposed CBA
submitted by MWEU leadership, which petitioner claims contained provisions that discriminated
against non-MWEU members. Petitioner prayed in his Supplemental Position Paper that
respondents be held guilty of unfair labor practices and ordered to indemnify him moral damages in
the amount of P100,000.00, exemplary damages amounting to P50,000.00, and 10% attorney’s
fees.
In their joint Position Paper and other pleadings, respondents claimed that the Labor Arbiter had no
24
jurisdiction over the dispute, which is intra-union in nature; that the Bureau of Labor Relations (BLR)
was the proper venue, in accordance with Article 226 of the Labor Code and Section 1, Rule XI of
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Department Order 40-03, series of 2003, of the DOLE; and that they were not guilty of unfair labor
26
practices, discrimination, coercion or restraint.
On May 29, 2009, Labor Arbiter Virginia T. Luyas-Azarraga issued her Decision which decreed as
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follows:
Indeed the filing of the instant case is still premature. Section 5, Article X-Investigation Procedures
and Appeal Process of the Union Constitution and By-Laws provides that:
Section 5. Any dismissed and/or expelled member shall have the rights to appeal to the Executive
Board within seven (7) days from the date of notice of the said dismissal and/or expulsion, which in
[turn] shall be referred to the General Membership Assembly. In case of an appeal, a simple majority
of the decision of the Executive Board is imperative. The same shall be approved/disapproved by a
majority vote of the general membership assembly in a meeting duly called for the purpose.
On the basis of the foregoing, the parties shall exhaust first all the administrative remedies before
resorting to compulsory arbitration. Thus, instant case is referred back to the Union for the General
Assembly to act or deliberate complainant’s appeal on the decision of the Executive Board.
WHEREFORE PREMISES CONSIDERED, instant case is referred back to the Union level for the
General Assembly to act on complainant’s appeal.
SO ORDERED. 28
Ruling of the National Labor Relations Commission
Petitioner appealed before the NLRC, where the case was docketed as NLRC LAC No. 07-001913-
09. On March 15, 2010, the NLRC issued its Decision, declaring as follows:
29
Complainant imputes serious error to the Labor Arbiter when she decided as follows:
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a. Referring back the subject case to the Union level for the General Assembly to act
on his appeal.
b. Not ruling that respondents are guilty of ULP as charged.
c. Not granting to complainant moral and exemplary damages and attorney’s fees.
Complainant, in support of his charges, claims that respondents restrained or coerced him in the
exercise of his right as a union member in violation of paragraph "a", Article 249 of the Labor
Code, particularly, in denying him the explanation as to whether there was observance of the
31
proper procedure in the increase of the membership dues from P100.00 to P200.00 per month.
Further, complainant avers that he was denied the right to appeal his suspension and expulsion in
accordance with the provisions of the Union’s Constitution and By-Laws. In addition, complainant
claims that respondents attempted to cause the management to discriminate against the members
of WATER-AFWC thru the proposed CBA.
Pertinent to the issue then on hand, the Labor Arbiter ordered that the case be referred back to the
Union level for the General Assembly to act on complainant’s appeal. Hence, these appeals.
After a careful look at all the documents submitted and a meticulous review of the facts, We find that
this Commission lacks the jurisdictional competence to act on this case.
Article 217 of the Labor Code, as amended, specifically enumerates the cases over which the
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Labor Arbiters and the Commission have original and exclusive jurisdiction. A perusal of the record
reveals that the causes of action invoked by complainant do not fall under any of the enumerations
therein. Clearly, We have no jurisdiction over the same.
Moreover, pursuant to Section 1, Rule XI, as amended, DOLE Department Order No. 40-03 in
particular, Item A, paragraphs (h) and (j) and Item B, paragraph (a)(3), respectively, provide:
"A. Inter-Intra-Union disputes shall include:
"(h) violation of or disagreements over any provision of the Constitution and By-Laws
of a Union or workers’ association.
"(j) violation of the rights and conditions of membership in a Union or workers’

association.
"B. Other Labor Relations disputes, not otherwise covered by Article 217 of the Labor Code, shall
include –
"3. a labor union and an individual who is not a member of said union."
Clearly, the above-mentioned disputes and conflict fall under the jurisdiction of the Bureau of Labor
Relations, as these are inter/intra-union disputes.
WHEREFORE, the decision of the Labor Arbiter a quo dated May 29, 2009 is hereby declared NULL
and VOID for being rendered without jurisdiction and the instant complaint is DISMISSED.
SO ORDERED. 33
Petitioner moved for reconsideration, but in a June 16, 2010 Resolution, the motion was denied
34 35
and the NLRC sustained its Decision.
Ruling of the Court of Appeals
In a Petition for Certiorari filed with the CA and docketed as CA-G.R. SP No. 115639, petitioner
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sought to reverse the NLRC Decision and be awarded his claim for damages and attorney’s fees on
account of respondents’ unfair labor practices, arguing among others that his charge of unfair labor
practices is cognizable by the Labor Arbiter; that the fact that the dispute is inter- or intra-union in
nature cannot erase the fact that respondents were guilty of unfair labor practices in interfering and
restraining him in the exercise of his right to self-organization as member of both MWEU and
WATER-AFWC, and in discriminating against him and other members through the provisions of the
proposed 2008 CBA which they drafted; that his failure to pay the increased union dues was proper
since the approval of said increase was arrived at without observing the prescribed voting procedure
laid down in the Labor Code; that he is entitled to an award of damages and attorney’s fees as a
result of respondents’ illegal acts in discriminating against him; and that in ruling the way it did, the
NLRC committed grave abuse of discretion.
On April 24, 2012, the CA issued the assailed Decision containing the following pronouncement:
The petition lacks merit.
Petitioner’s causes of action against MWEU are inter/intra-union disputes cognizable by the BLR
whose functions and jurisdiction are largely confined to union matters, collective bargaining registry,
and labor education. Section 1, Rule XI of Department Order (D.O.) No. 40-03, Series of 2003, of the
Department of Labor and Employment enumerates instances of inter/intra-union disputes, viz:
Section 1. Coverage. – Inter/intra-union disputes shall include:
xxxx
(b) conduct of election of union and workers’ association officers/nullification of election of union and
workers’ association officers;
(c) audit/accounts examination of union or workers’ association funds;
xxxx
(g) validity/invalidity of impeachment/ expulsion of union and workers’ association officers and
members;
xxxx
(j) violations of or disagreements over any provision in a union or workers’ association constitution
and by-laws;
xxxx
(l) violations of the rights and conditions of union or workers’ association membership;
xxxx
(n) such other disputes or conflicts involving the rights to self-organization, union membership and
collective bargaining –
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers’ association.
In brief, "Inter-Union Dispute" refers to any conflict between and among legitimate labor unions
involving representation questions for purposes of collective bargaining or to any other conflict or
dispute between legitimate labor unions. "Intra-Union Dispute" refers to any conflict between and
among union members, including grievances arising from any violation of the rights and conditions of
membership, violation of or disagreement over any provision of the union’s constitution and by-laws,
or disputes arising from chartering or affiliation of union. On the other hand, the circumstances of
unfair labor practices (ULP) of a labor organization are stated in Article 249 of the Labor Code, to
wit:
Article 249. Unfair labor practices of labor organizations. It shall be unlawful for labor organization,
its officers, agents, or representatives to commit any of the following unfair labor practices:
(a) To restrain or coerce employees in the exercise of their right to self-organization;

Provided, That the labor organization shall have the right to prescribe its own rules
with respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,

including discrimination against an employee with respect to whom membership in
such organization has been denied or terminated on any ground other than the usual
terms and conditions under which membership or continuation of membership is
made available to other members;
xxxx
Applying the aforementioned rules, We find that the issues arising from petitioner’s right to
information on the increased membership dues, right to appeal his suspension and expulsion
according to CBL provisions, and right to vote and be voted on are essentially intra-union disputes;
these involve violations of rights and conditions of union membership. But his claim that a director of
MWEU warned that non-MWEU members would not receive CBA benefits is an inter-union dispute.
It is more of an "interference" by a rival union to ensure the loyalty of its members and to persuade
non-members to join their union. This is not an actionable wrong because interfering in the exercise
of the right to organize is itself a function of self-organizing. As long as it does not amount to
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restraint or coercion, a labor organization may interfere in the employees’ right to self-
organization. Consequently, a determination of validity or illegality of the alleged acts necessarily
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touches on union matters, not ULPs, and are outside the scope of the labor arbiter’s jurisdiction.
As regards petitioner’s other accusations, i.e., discrimination in terms of meting out the penalty of
expulsion against him alone, and attempt to cause the employer, MWC, to discriminate against non-
MWEU members in terms of retrenchment or reduction of personnel, and signing bonus, while We
may consider them as falling within the concept of ULP under Article 249(a) and (b), still, petitioner’s
complaint cannot prosper for lack of substantial evidence. Other than his bare allegation, petitioner
offered no proof that MWEU did not penalize some union members who failed to pay the increased
dues. On the proposed discriminatory CBA provisions, petitioner merely attached the pages
containing the questioned provisions without bothering to reveal the MWEU representatives
responsible for the said proposal. Article 249 mandates that "x x x only the officers, members of the
governing boards, representatives or agents or members of labor associations or organizations who
have actually participated in, authorized or ratified unfair labor practices shall be held criminally
liable." Plain accusations against all MWEU officers, without specifying their actual participation, do
not suffice. Thus, the ULP charges must necessarily fail.
In administrative and quasi-judicial proceedings, only substantial evidence is necessary to establish

the case for or against a party. Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. Petitioner failed to discharge the
burden of proving, by substantial evidence, the allegations of ULP in his complaint. The NLRC,
therefore, properly dismissed the case.
FOR THESE REASONS, the petition is DISMISSED.

SO ORDERED. 39
Thus, the instant Petition.
Issue
In an August 28, 2013 Resolution, this Court resolved to give due course to the Petition, which
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claims that the CA erred:
A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION CONFLICTS NEGATES THE

COMPLAINT FOR UNFAIR LABOR PRACTICES AGAINST A LABOR ORGANIZATION AND ITS
OFFICERS, AND IN AFFIRMING THAT THE NLRC PROPERLY DISMISSED THE CASE FOR
ALLEGED LACK OF JURISDICTION.
B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR PRACTICES

UNDER ARTICLE 249(a) AND (b) OF THE LABOR CODE.
C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER AGAINST MEMBERS OF

A RIVAL UNION IS (sic) MERELY AN "INTERFERENCE" AND DO NOT AMOUNT TO
"RESTRAINT" OR "COERCION".
D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL EVIDENCE IN

PROVING RESPONDENTS’ SPECIFIC ACTS OF UNFAIR LABOR PRACTICES.
E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO PETITIONER FOR

MORAL AND EXEMPLARY DAMAGES, AND ATTORNEY’S FEES. 41
Petitioner’s Arguments
Praying that the assailed CA dispositions be set aside and that respondents be declared guilty of
unfair labor practices under Article 249(a) and (b) and adjudged liable for damages and attorney’s
fees as prayed for in his complaint, petitioner maintains in his Petition and Reply that respondents
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are guilty of unfair labor practices which he clearly enumerated and laid out in his pleadings below;
that these unfair labor practices committed by respondents fall within the jurisdiction of the Labor
Arbiter; that the Labor Arbiter, the NLRC, and the CA failed to rule on his accusation of unfair labor
practices and simply dismissed his complaint on the ground that his causes of action are intra- or
inter-union in nature; that admittedly, some of his causes of action involved intra- or inter-union
disputes, but other acts of respondents constitute unfair labor practices; that he presented
substantial evidence to prove that respondents are guilty of unfair labor practices by failing to
observe the proper procedure in the imposition of the increased monthly union dues, and in unduly
imposing the penalties of suspension and expulsion against him; that under the union’s constitution
and by-laws, he is given the right to appeal his suspension and expulsion to the general membership
assembly; that in denying him his rights as a union member and expelling him, respondents are
guilty of malice and evident bad faith; that respondents are equally guilty for violating and curtailing
his rights to vote and be voted to a position within the union, and for discriminating against non-
MWEU members; and that the totality of respondents’ conduct shows that they are guilty of unfair
labor practices.
Respondent’s Arguments
In their joint Comment, respondents maintain that petitioner raises issues of fact which are beyond
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the purview of a petition for review on certiorari; that the findings of fact of the CA are final and
conclusive; that the Labor Arbiter, NLRC, and CA are one in declaring that there is no unfair labor
practices committed against petitioner; that petitioner’s other allegations fall within the jurisdiction of
the BLR, as they refer to intra- or inter-union disputes between the parties; that the issues arising
from petitioner’s right to information on the increased dues, right to appeal his suspension and
expulsion, and right to vote and be voted upon are essentially intra-union in nature; that his
allegations regarding supposed coercion and restraint relative to benefits in the proposed CBA do
not constitute an actionable wrong; that all of the acts questioned by petitioner are covered by
Section 1, Rule XI of Department Order 40-03, series of 2003 as intra-/inter-union disputes which do
not fall within the jurisdiction of the Labor Arbiter; that in not paying his union dues, petitioner is guilty
of insubordination and deserved the penalty of expulsion; that petitioner failed to petition to convene
the general assembly through the required signature of 30% of the union membership in good
standing pursuant to Article VI, Section 2(a) of MWEU’s Constitution and By-Laws or by a petition of
the majority of the general membership in good standing under Article VI, Section 3; and that for his
failure to resort to said remedies, petitioner can no longer question his suspension or expulsion and
avail of his right to appeal.
Our Ruling
The Court partly grants the Petition.
In labor cases, issues of fact are for the labor tribunals and the CA to resolve, as this Court is not a
trier of facts. However, when the conclusion arrived at by them is erroneous in certain respects, and
would result in injustice as to the parties, this Court must intervene to correct the error. While the
Labor Arbiter, NLRC, and CA are one in their conclusion in this case, they erred in failing to resolve
petitioner’s charge of unfair labor practices against respondents.
It is true that some of petitioner’s causes of action constitute intra-union cases cognizable by the
BLR under Article 226 of the Labor Code.
An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the union’s constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of Department Order No. 40-03,
Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes x x
x.
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However, petitioner’s charge of unfair labor practices falls within

the original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor
Code. In addition, Article 247 of the same Code provides that "the civil aspects of all cases involving
unfair labor practices, which may include claims for actual, moral, exemplary and other forms of
damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor
Arbiters."
Unfair labor practices may be committed both by the employer under Article 248 and by labor
organizations under Article 249 of the Labor Code, which provides as follows:
45
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization.
However, a labor organization shall have the right to prescribe its own rules with respect to
the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee, including

discrimination against an employee with respect to whom membership in such organization
has been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to
other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any
money or other things of value, in the nature of an exaction, for services which are not
performed or not to be performed, including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of governing
boards, representatives or agents or members of labor associations or organizations who have
actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).
Petitioner contends that respondents committed acts constituting unfair labor practices – which
charge was particularly laid out in his pleadings, but that the Labor Arbiter, the NLRC, and the CA
ignored it and simply dismissed his complaint on the ground that his causes of action were intra- or
inter-union in nature. Specifically, petitioner claims that he was suspended and expelled from MWEU
illegally as a result of the denial of his right to appeal his case to the general membership assembly
in accordance with the union’s constitution and by-laws. On the other hand, respondents counter
that such charge is intra-union in nature, and that petitioner lost his right to appeal when he failed to
petition to convene the general assembly through the required signature of 30% of the union
membership in good standing pursuant to Article VI, Section 2(a) of MWEU’s Constitution and By-
Laws or by a petition of the majority of the general membership in good standing under Article VI,
Section 3.
Under Article VI, Section 2(a) of MWEU’s Constitution and By-Laws, the general membership
assembly has the power to "review revise modify affirm or repeal [sic] resolution and decision of the
Executive Board and/or committees upon petition of thirty percent (30%) of the Union in good
standing," and under Section 2(d), to "revise, modify, affirm or reverse all expulsion cases." Under
46 47
Section 3 of the same Article, "[t]he decision of the Executive Board may be appealed to the General
Membership which by a simple majority vote reverse the decision of said body. If the general
Assembly is not in session the decision of the Executive Board may be reversed by a petition of the
majority of the general membership in good standing." And, in Article X, Section 5, "[a]ny dismissed
48
and/or expelled member shall have the right to appeal to the Executive Board within seven days
from notice of said dismissal and/or expulsion which, in [turn] shall be referred to the General
membership assembly. In case of an appeal, a simple majority of the decision of the Executive
Board is imperative. The same shall be approved/disapproved by a majority vote of the general
membership assembly in a meeting duly called for the purpose." 49
In regard to suspension of a union member, MWEU’s Constitution and By-Laws provides under
Article X, Section 4 thereof that "[a]ny suspended member shall have the right to appeal within three
(3) working days from the date of notice of said suspension. In case of an appeal a simple majority
of vote of the Executive Board shall be necessary to nullify the suspension."
Thus, when an MWEU member is suspended, he is given the right to appeal such suspension within
three working days from the date of notice of said suspension, which appeal the MWEU Executive
Board is obligated to act upon by a simple majority vote. When the penalty imposed is expulsion, the
expelled member is given seven days from notice of said dismissal and/or expulsion to appeal to the
Executive Board, which is required to act by a simple majority vote of its members. The Board’s
decision shall then be approved/ disapproved by a majority vote of the general membership
assembly in a meeting duly called for the purpose. 1avvphi1
The documentary evidence is clear that when petitioner received Borela’s August 21, 2007 letter
informing him of the Executive Board’s unanimous approval of the grievance committee
recommendation to suspend him for the second time effective August 24, 2007, he immediately and
timely filed a written appeal. However, the Executive Board – then consisting of respondents Borela,
Tierra, Bolo, Casañas, Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan, Cancino,
Maga, Cometa, Mancenido, and two others who are not respondents herein – did not act thereon.
Then again, when petitioner was charged for the third time and meted the penalty of expulsion from
MWEU by the unanimous vote of the Executive Board, his timely appeal was again not acted upon
by said board – this time consisting of respondents Borela, Quebral, Tierra, Imana, Rendon, Yeban,
Cancino, Torres, Montemayor, Mancenido, Mandilag, Fernandez, Buenaventura, Apilado, Maga,
Barbero, Cometa, Bolo, and Manlapaz.
Thus, contrary to respondents’ argument that petitioner lost his right to appeal when he failed to
Section 3, this Court finds that petitioner was illegally suspended for the second time and thereafter
unlawfully expelled from MWEU due to respondents’ failure to act on his written appeals. The
required petition to convene the general assembly through the required signature of 30% (under
Article VI, Section 2[a]) or majority (under Article VI, Section 3) of the union membership does not
apply in petitioner’s case; the Executive Board must first act on his two appeals before the matter
could properly be referred to the general membership. Because respondents did not act on his two
appeals, petitioner was unceremoniously suspended, disqualified and deprived of his right to run for
the position of MWEU Vice-President in the September 14, 2007 election of officers, expelled from
MWEU, and forced to join another union, WATER-AFWC. For these, respondents are guilty of unfair
labor practices under Article 249 (a) and (b) – that is, violation of petitioner’s right to self-
organization, unlawful discrimination, and illegal termination of his union membership – which case
falls within the original and exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217
of the Labor Code.
The primary concept of unfair labor practices is stated in Article 247 of the Labor Code, which states:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof. –– Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical
to the legitimate interests of both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-management relations.
"In essence, [unfair labor practice] relates to the commission of acts that transgress the workers’
right to organize." "[A]ll the prohibited acts constituting unfair labor practice in essence relate to the
50
workers’ right to self-organization." "[T]he term unfair labor practice refers to that gamut of offenses
51
defined in the Labor Code which, at their core, violates the constitutional right of workers and
employees to self-organization." 52
Guaranteed to all employees or workers is the ‘right to self-organization and to form, join, or assist
labor organizations of their own choosing for purposes of collective bargaining.’ This is made plain
by no less than three provisions of the Labor Code of the Philippines. Article 243 of the Code
provides as follows:
ART. 243. Coverage and employees’ right to self-organization. — All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions whether operating for profit or not, shall have the right to self-organization
and to form, join, or assist labor organizations of their own choosing for purposes or collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and
those without any definite employers may form labor organizations for their mutual aid and
protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to ‘interfere
with, restrain or coerce employees in the exercise of their right to self-organization.’ Similarly, Article
249 (a) makes it an unfair labor practice for a labor organization to ‘restrain or coerce employees in
the exercise of their rights to self-organization . . .’
xxxx
The right of self-organization includes the right to organize or affiliate with a labor union or determine
which of two or more unions in an establishment to join, and to engage in concerted activities with
co-workers for purposes of collective bargaining through representatives of their own choosing, or
for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and
interests.
53
As members of the governing board of MWEU, respondents are presumed to know, observe, and
apply the union’s constitution and by-laws. Thus, their repeated violations thereof and their disregard
of petitioner’s rights as a union member – their inaction on his two appeals which resulted in his
suspension, disqualification from running as MWEU officer, and subsequent expulsion without being
accorded the full benefits of due process – connote willfulness and bad faith, a gross disregard of his
rights thus causing untold suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith
implies breach of faith and willful failure to respond to plain and well understood obligation." This
54
warrants an award of moral damages in the amount of P100,000.00. Moreover, the Civil Code
provides:
Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of
another person shall be liable to the latter for damages:
xxxx
(12) The right to become a member of associations or societies for purposes not contrary to law;
In Vital-Gozon v. Court of Appeals, this Court declared, as follows:

55
Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. They may be
recovered if they are the proximate result of the defendant’s wrongful act or omission. The instances
when moral damages may be recovered are, inter alia, ‘acts and actions referred to in Articles 21,
26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,’ which, in turn, are found in the Chapter on
Human Relations of the Preliminary Title of the Civil Code. x x x
Under the circumstances, an award of exemplary damages in the amount of P50,000.00, as prayed
for, is likewise proper. "Exemplary damages are designed to permit the courts to mould behavior that
has socially deleterious consequences, and their imposition is required by public policy to suppress
the wanton acts of the offender." This should prevent respondents from repeating their mistakes,
56
which proved costly for petitioner. 1âwphi1
Under Article 2229 of the Civil Code, ‘[e]xemplary or corrective damages are imposed, by way of
example or correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages.’ As this court has stated in the past: ‘Exemplary damages are designed by
our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence
by creating negative incentives or deterrents against such behaviour.’ 57
Finally, petitioner is also entitled to attorney’s fees equivalent to 10 per cent (10%) of the total
award. The unjustified acts of respondents clearly compelled him to institute an action primarily to
vindicate his rights and protect his interest. Indeed, when an employee is forced to litigate and incur
expenses to protect his rights and interest, he is entitled to an award of attorney’s fees.
58
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April 24, 2012 Decision of the
Court of Appeals in CA-G.R. SP No. 115639 is hereby MODIFIED, in that all of the respondents -
except for Carlos Villa, Ric Briones, and Chito Bernardo - are declared guilty of unfair labor practices
and ORDERED TO INDEMNIFY petitioner Allan M. Mendoza the amounts of Pl00,000.00 as and by
way of moral damages, PS0,000.00 as exemplary damages, and attorney's fees equivalent to
10 per cent (10%) of the total award.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION JOSE CATRAL MENDOZA

Associate Justice Associate Justice
MARVIC M.V.F. LEONEN

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
MARIA LOURDES P. A. SERENO

Chief Justice
Footnotes
1
Rollo, pp. 7-42.
Id. at 43-54; penned by Associate Justice Mario V. Lopez and concurred in by Associate
2
Justices Fernanda Lampas Peralta and Socorro B. Inting.
3
Id. at 346-369.
4
Id. at 9, 44.
5
Id. at 55.
6
Id. at 56-57.
7
Id. at 139-176, which provide, as follows:
ARTICLE IX
DISCIPLINARY GROUNDS/OFFENSES
Section 1. The following grounds for disciplinary action, suspension or expulsion of

members as acts or deeds inimical to the interests and welfare of the Union and/or
its officers and members. Any officer or member may be penalized for committing
any following offenses by fines, suspension, or expulsion:
xxxx
g. Non-payment of dues and other monetary obligation due the Union for a
reasonable period of time:
1st Offense - Letter reprimand

2nd Offense - Suspension of right benefit privileges for 30 days
3rd Offense - Expulsion from Union membership and recommendation for

termination of employment
8
Rollo, p. 61.
Id. at 188-189; Board Resolution No. 1, series of 2007, approved by respondents Borela,
9
Cancino, Maga, Montemayor, Fernandez, Torres, Mancenido, Bolo, Quebral, Casañas,

Pagulayan, Tierra, Cometa, Rendon, and two (2) others who are not respondents herein.
10
Id. at 62.
11
Stating that:
ARTICLE V
DUTIES, RESPONSIBILITIES, RIGHTS, PRIVILEGES AND OBLIGATIONS OF
UNION MEMBERSHIP
xxxx
Section 2. Rights and Privileges. All Union members in good standing shall have the
following rights and privileges:
xxxx
g. To appeal to the General Membership Assembly any arbitrary resolution, policy

and rule that may be promulgated by the Executive Board;
12
Rollo, p. 63.
13
Id. at 64.
14
Id. at 66.
15
Id. at 68.
16
Tierra, Bolo, Casañas, Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan,

Cancino, Maga, Cometa, Mancenido, and two (2) others who are not respondents herein.
17
Id. at 69.
18
Quebral, Tierra, Imana, Rendon, Yeban, Cancino, Torres, Montemayor, Mancenido,

Mandilag, Fernandez, Buenaventura, Apilado, Maga, Barbero, Cometa, Bolo, and Manlapaz.
19
Id. at 74-80, 226-227.
20
Id. at 46.
Id. at 47.
21
Id. at 87-88.
22
Id. at 89-96, 97-108, 231-238, 254-262.

23
Id. at 109-137, 239-251, 272-277.

24
ART. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and the Labor
25
Relations Divisions in the regional offices of the Department of Labor, shall have original and
exclusive authority to act, at their own initiative or upon request of either or both parties, on
all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor-management relations in all workplaces, whether agricultural or non-
agricultural, except those arising from the implementation or interpretation of collective
bargaining agreements which shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to
extension by agreement of the parties. (Art. 226 and other specific provisions of the Labor
Code have since been renumbered as a result of the passage of Republic Act No. 10151
[2011]).
RULE XI – INTER/INTRA-UNION DISPUTES AND OTHER RELATED LABOR

26
RELATIONS
DISPUTES
SECTION 1. Coverage. - Inter/intra-union disputes shall include:
(a) cancellation of registration of a labor organization filed by its members or

by another labor organization;
(b) conduct of election of union and workers association officers/nullification

of election of union and workers association officers;
(c) audit/accounts examination of union or workers association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion of union and workers

association officers and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;

(j) violations of or disagreements over any provision in a union or workers
association constitution and by-laws;
(k) disagreements over chartering or registration of labor organizations and

collective bargaining agreements;
(l) violations of the rights and conditions of union or workers association

membership;
(m) violations of the rights of legitimate labor organizations, except

interpretation of collective bargaining agreements;
(n) such other disputes or conflicts involving the rights to self-organization,

union membership and collective bargaining
(2) between and among members of a union or workers association.
Rollo, pp. 279-281.

27
Id. at 280-281.
28
Id. at 322-326; penned by Commissioner Isabel G. Panganiban-Ortiguerra and concurred

29
in by Presiding Commissioner Benedicto R. Palacol and Commissioner Nieves Vivar-de

Castro.
Herein petitioner.
30
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for
31
a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-

organization. However, a labor organization shall have the right to prescribe its own
1âwphi1
rules with respect to the acquisition or retention of membership;
(b) x x x x
ART. 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as otherwise
32
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective

bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
Rollo, pp. 323-325.

33
Id. at 327-337.
34
Id. at 343-345.
35
Id. at 346-369.
36
Citing Azucena, Jr., Cesario A., The Labor Code with Comments and Cases, Vol. II, 2004
37
5th Edition, p. 256.
Id.
38
Rollo, pp. 50-54.

39
Id. at 449-450.
40
Id. at 19.
41
Id. at 440-447.
42
Id. at 403-435.
43
Employees Union of Bayer Phils. v. Bayer Philippines, Inc., 651 Phil. 190, 203 (2010),
44
citing C.A. Azucena, Jr., Vol. II, THE LABOR CODE WITH COMMENTS AND CASES, 2004
ed., p. 111.
As earlier stated, provisions of the Labor Code, from Article 156 onward, have since been
45
renumbered as a result of the passage of Republic Act No. 10151.
Rollo, p. 144.
46
Id.
47
Id.
48
Id. at 158.
49
Baptista v. Villanueva, G.R. No. 194709, July 31, 2013, 703 SCRA 48, 57.
50
Culili v. Eastern Telecommunications Philippines, Inc., 657 Phil. 342, 368 (2011).
51
Pepsi-Cola Products Philippines, Inc. v. Molon, G.R. No. 175002, February 18, 2013, 691
52
SCRA 113, 133.
Reyes v. Trajano, G.R. No. 84433, June 2, 1992, 209 SCRA 484, 488-489.
53
Sanchez v. Republic, 618 Phil. 228, 236 (2009).

54
354 Phil. 128, 151 (1998).

55
U-Bix Corporation v. Bandiola, 552 Phil. 633, 651 (2007).

56
Montinola v. Philippine Airlines, G.R. No. 198656, September 8, 2014, 734 SCRA 439, 464.
57
Tangga-an v. Philippine Transmarine Carriers, Inc., G.R. No. 180636, March 13, 2013, 693
58
SCRA 340, 356, citing Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East

Zone Union v. Manila Water Company, Inc., 676 Phil. 262 (2011).
G.R. No. 84433 June 2, 1992
ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others, petitioners,

vs.
CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med. Arbiter
PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.
NARVASA, C.J.:
The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the
denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia
ni Kristo" (INK), all employed in the same company, at a certification election at which two (2) labor
organizations were contesting the right to be the exclusive representative of the employees in the
bargaining unit. That denial is assailed as having been done with grave abuse of discretion in the
special civil action of certiorari at bar, commenced by the INK members adversely affected thereby.
The certification election was authorized to be conducted by the Bureau of Labor Relations among
the employees of Tri-Union Industries Corporation on October 20, 1987. The competing unions were
Tri-Union Employees Union-Organized Labor Association in Line Industries and Agriculture (TUEU-
OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers
initially deemed to be qualified voters, only 240 actually took part in the election, conducted under
the provision of the Bureau of Labor Relations. Among the 240 employees who cast their votes were
141 members of the INK.
The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of
the two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably
with established rule and practice, for (c) a third choice: "NO UNION."
1
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1
SPOILED 1
CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were segregated and
excluded from the final count in virtue of an agreement between the competing unions,
reached at the pre-election conference, that the INK members should not be allowed to vote
"because they are not members of any union and refused to participate in the previous
certification elections."
The INK employees promptly made known their protest to the exclusion of their votes. They filed f a
petition to cancel the election alleging that it "was not fair" and the result thereof did "not reflect the
true sentiments of the majority of the employees." TUEU-OLALIA opposed the petition. It contended
that the petitioners "do not have legal personality to protest the results of the election," because
"they are not members of either contending unit, but . . . of the INK" which prohibits its followers, on
religious grounds, from joining or forming any labor organization . . . ."
The Med-Arbiter saw no merit in the INK employees petition. By Order dated December 21, 1987,
1
he certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file
employees. In that Order he decided the fact that "religious belief was (being) utilized to render
meaningless the rights of the non-members of the Iglesia ni Kristo to exercise the rights to be
represented by a labor organization as the bargaining agent," and declared the petitioners as "not
possessed of any legal personality to institute this present cause of action" since they were not
parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued
that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority,"
and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid
election where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall
have cast their votes." Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-Charge of
the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. He opined that
the petitioners are "bereft of legal personality to protest their alleged disenfrachisement" since they
"are not constituted into a duly organized labor union, hence, not one of the unions which vied for
certification as sole and exclusive bargaining representative." He also pointed out that the petitioners
"did not participate in previous certification elections in the company for the reason that their
religious beliefs do not allow them to form, join or assist labor organizations."
It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set aside in
the present special civil action of certiorari.
The Solicitor General having expressed concurrence with the position taken by the petitioners, public
respondent NLRC was consequently required to file, and did thereafter file, its own comment on the
petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the
exercise of their religious belief opted not to join any labor organization as a consequence of which
they themselves can not have a bargaining representative, then the right to be representative by a
bargaining agent should not be denied to other members of the bargaining unit."
Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist
labor organizations of their own choosing for purposes of collective bargaining." This is made plain
2
provides as follows: 3
ART. 243. Coverage and employees right to self-organization. — All persons

employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join, or assist labor organizations
of their own choosing for purposes or collective bargaining. Ambulant, intermittent
and itinerant workers, self-employed people, rural workers and those without any
definite employers may form labor organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere
with, restrain or coerce employees in the exercise of their right to self-organization." Similarly, Article
249 (a) makes it an unfair labor practice for a labor organization to "restrain or coerce employees in
the exercise of their rights to self-organization . . . "
The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as
amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor
Relations) of the Omnibus Rules provides as follows; 4
Sec. 1. Who may join unions; exception. — All persons employed in commercial,
industrial and agricultural enterprises, including employees of government
corporations established under the Corporation Code as well as employees of
religious, medical or educational institutions, whether operating for profit or not,
except managerial employees, shall have the right to self-organization and to form,
join or assist labor organizations for purposes of collective bargaining. Ambulant,
intermittent and without any definite employers people, rural workers and those
without any definite employers may form labor organizations for their mutual aid and
protection.
x x x x x x x x x
interests. 5
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a
labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain
membership therein. The right to form or join a labor organization necessarily includes the right to
refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the
exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred
right. The fact that a person has opted to acquire membership in a labor union does not preclude his
subsequently opting to renounce such membership. 6
As early as 1974 this Court had occasion to expatiate on these self-evident propositions
in Victoriano v. Elizalde Rope Workers' Union, et al., viz.:
7
. . .What the Constitution and Industrial Peace Act recognize and guarantee is the
"right" to form or join associations. Notwithstanding the different theories propounded
by the different schools of jurisprudence regarding the nature and contents of a
"right," it can be safely said that whatever theory one subscribes to, a right
comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the
absence of legal restraint, whereby an employee may act for himself being prevented
by law; second, power, whereby an employee may, as he pleases, join or refrain
from joining an association. It is therefore the employee who should decide for
himself whether he should join or not an association; and should he choose to join;
and even after he has joined, he still retains the liberty and the power to leave and
cancel his membership with said organization at any time (Pagkakaisa Samahang
Manggagawa ng San Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010, 1019). It is
clear, therefore, that the right to join a union includes the right to abstain from joining
any union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L-19912, January
20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch as
what both the Constitution and the Industrial Peace Act have recognized, the
guaranteed to the employee, is the "right" to join associations of his choice, it would
be absurd to say that the law also imposes, in the same breath, upon the employee
the duty to join associations. The law does not enjoin an employee to sign up with
any association.
The right to refuse to join or be represented by any labor organization is recognized not only by law
but also in the rules drawn up for implementation thereof. The original Rules on Certification
promulgated by the defunct Court of Industrial Relations required that the ballots to be used at a
certification election to determine which of two or more competing labor unions would represent the
employees in the appropriate bargaining unit should contain, aside from the names of each union,
an alternative choice of the employee voting, to the effect that he desires not to which of two or more
competing labor unions would represent the employees in the appropriate bargaining unit should
contain, aside from the names of each union, an alternative choice of the employee voting, to the
effect that he desires not to be represented by any union. 8 And where only one union was involved, the ballots were
required to state the question — "Do you desire to be represented by said union?" — as regards which the employees voting would mark an
appropriate square, one indicating the answer, "Yes" the other, "No."
To be sure, the present implementing rules no longer explicitly impose the requirement that the
ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the
Omnibus Rules) entitled "Marketing and canvassing of votes," pertinently provides that:
. . . (a) The voter must write a cross (X) or a check (/) in the square opposite the
union of his choice. If only one union is involved, the voter shall make his cross or
check in the square indicating "YES" or "NO."
x x x x x x x x x
Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules expressly
bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful if the employee's
alternative right NOT to form, join or assist any labor organization or withdraw or resign from one
may be validly eliminated and he be consequently coerced to vote for one or another of the
competing unions and be represented by one of them. Besides, the statement in the quoted
provision that "(i)f only one union is involved, the voter shall make his cross or check in the square
indicating "YES" or "NO," is quite clear acknowledgment of the alternative possibility that the "NO"
votes may outnumber the "YES" votes — indicating that the majority of the employees in the
company do not wish to be represented by any union — in which case, no union can represent the
employees in collective bargaining. And whether the prevailing "NO" votes are inspired by
considerations of religious belief or discipline or not is beside the point, and may not be inquired into
at all.
The purpose of a certification election is precisely the ascertainment of the wishes of the majority of
the employees in the appropriate bargaining unit: to be or not to be represented by a labor
organization, and in the affirmative case, by which particular labor organization. If the results of the
election should disclose that the majority of the workers do not wish to be represented by any union,
then their wishes must be respected, and no union may properly be certified as the exclusive
representative of the workers in the bargaining unit in dealing with the employer regarding wages,
hours and other terms and conditions of employment. The minority employees — who wish to have
a union represent them in collective bargaining — can do nothing but wait for another suitable
occasion to petition for a certification election and hope that the results will be different. They may
not and should not be permitted, however, to impose their will on the majority — who do not desire
to have a union certified as the exclusive workers' benefit in the bargaining unit — upon the plea that
they, the minority workers, are being denied the right of self-organization and collective bargaining.
As repeatedly stated, the right of self-organization embraces not only the right to form, join or assist
labor organizations, but the concomitant, converse right NOT to form, join or assist any labor union.
That the INK employees, as employees in the same bargaining unit in the true sense of the term, do
have the right of self-organization, is also in truth beyond question, as well as the fact that when they
voted that the employees in their bargaining unit should be represented by "NO UNION," they were
simply exercising that right of self-organization, albeit in its negative aspect.
The respondents' argument that the petitioners are disqualified to vote because they "are not
constituted into a duly organized labor union" — "but members of the INK which prohibits its
followers, on religious grounds, from joining or forming any labor organization" — and "hence, not
one of the unions which vied for certification as sole and exclusive bargaining representative," is
specious. Neither law, administrative rule nor jurisprudence requires that only employees affiliated
with any labor organization may take part in a certification election. On the contrary, the plainly
discernible intendment of the law is to grant the right to vote to all bona fide employees in the
bargaining unit, whether they are members of a labor organization or not. As held in Airtime
Specialists, Inc. v. Ferrer-Calleja:
9
In a certification election all rank-and-file employees in the appropriate bargaining

unit are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code
which states that the "labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of collective bargaining." Collective
bargaining covers all aspects of the employment relation and the resultant CBA
negotiated by the certified union binds all employees in the bargaining unit. Hence,
all rank-and-file employees, probationary or permanent, have a substantial interest in
the selection of the bargaining representative. The Code makes no distinction as to
their employment for certification election. The law refers to "all" the employees in the
bargaining unit. All they need to be eligible to support the petition is to belong to the
"bargaining unit".
Neither does the contention that petitioners should be denied the right to vote because they "did not
participate in previous certification elections in the company for the reason that their religious beliefs
do not allow them to form, join or assist labor organizations," persuade acceptance. No law,
administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to
exercise the right in past certification elections. In denying the petitioners' right to vote upon these
egregiously fallacious grounds, the public respondents exercised their discretion whimsically,
capriciously and oppressively and gravely abused the same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-in-Charge of
the Bureau of Labor Relations dated December 21, 1987 (affirming the Order of the Med-Arbiter
dated July 22, 1988) is ANNULLED and SET ASIDE; and the petitioners are DECLARED to have
legally exercised their right to vote, and their ballots should be canvassed and, if validly and properly
made out, counted and tallied for the choices written therein. Costs against private respondents.
SO ORDERED.
Paras, Padilla and Regalado, JJ., concur.
Nocon, J., is on leave.
Footnotes
1 SEE footnote 5, infra.
2 As amended inter alia by R.A. Nos. 6715-6725 and 6727.
3 Emphasis supplied
4 Emphasis supplied
5 Art. 247, Labor Code, as amended; SEE Fernandez and Quiazon, Law of Labor

Relations, p. 162.
6 To be sure, the right not to join a union, or discontinue membership therein, is
subject to a certain qualifications or exceptions as, e.g., where there is a close shop
or similar agreement in effect in the establishments, although it has been held that
such agreements are not applicable to any religious sect which prohibits affiliation of
their members in any labor organizations (Sec. 4(a), R.A. 875 [The Industrial Peace
Act], as amended by R.A. No. 3350)
7 59 SCRA 54, 66-67 (1974)
8 SEE Fernandez & Quiazon, op. cit. pp. 499-501
9 180 SCRA 749, 754 (1989).
October 14, 2015
G.R. No. 211145
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by its President, ALFIE

ALIPIO, Petitioner
vs.
BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO.,
LTD. (HHIC-PIDL.),, Respondents
DECISION
mendoza, J.:
The right to self-organization is not limited to unionism. Workers may also form or join an association
for mutual aid and protection and for other legitimate purposes.
This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013
Decision and the January 28, 2014 Resolution of the Court of Appeals (CA) in CA-G.R. SP No.
1 2
123397, which reversed the November 28, 2011 Resolution of the Bureau of Labor Relations (BLR)
3
and reinstated the April 20, 2010 Decision 4 of the Department of Labor and Employment (DOLE)
Regional Director, cancelling the registration of Samahan ng Manggagawa sa Hanjin
Shipyard (Samahan) as a worker's association under Article 243 (now Article 249) of the Labor
Code.
The Facts
On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed an
application for registration 5 of its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with
the DOLE. Attached to the application were the list of names of the association's officers and
members, signatures of the attendees of the February 7, 2010 meeting, copies of their Constitution
and By-laws. The application stated that the association had a total of 120 members.
On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando, Pampanga (DOLE-
Pampanga), issued the corresponding certificate of registration6 in favor of Samahan.
On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd. Philippines
(Hanjin), with offices at Greenbeach 1, Renondo Peninsula, Sitio Agustin, Barangay Cawag, Subic
Bay Freeport Zone, filed a petition7 with DOLE-Pampanga praying for the cancellation of registration
of Samahan' s association on the ground that its members did not fall under any of the types of
workers enumerated in the second sentence of Article 243 (now 249).
Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed, and those
without definite employers may form a workers' association. It further posited that one third (1/3) of
the members of the association had definite employers and the continued existence and registration
of the association would prejudice the company's goodwill.
On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground that
Samahan committed a misrepresentation in connection with the list of members and/or voters who
took part in the ratification of their constitution and by-laws in its application for registration. Hanjin
claimed that Samahan made it appear that its members were all qualified to become members of the
workers' association.
On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested for a
10-day period to file a responsive pleading. No pleading, however, was submitted. Instead,
Samahan filed a motion to dismiss on April 14, 2010. 9
The Ruling of the DOLE Regional Director
On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He found that the
preamble, as stated in the Constitution and By-Laws of Samahan, was an admission on its part that
all of its members were employees of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong na isulong ang
pagpapabuti ng kondisyon sa paggawa at katiyakan sa hanapbuhay sa pamamagitan ng patuloy na
pagpapaunlad ng kasanayan ng para sa mga kasapi nito. Naniniwala na sa pamamagitan ng aming
mga angking lakas, kaalaman at kasanayan ay aming maitataguyod at makapag-aambag sa
kaunlaran ng isang lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila at
pagpapahalaga sa mga tulad naming mga manggagawa.
XXX 10
The same claim was made by Samahan in its motion to dismiss, but it failed to adduce evidence that
the remaining 63 members were also employees of Hanjin. Its admission bolstered Hanjin's claim
that Samahan committed misrepresentation in its application for registration as it made an express
representation that all of its members were employees of the former. Having a definite employer,
these 57 members should have formed a labor union for collective bargaining. The dispositive
11
portion of the decision of the Dole Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently, the

Certificate of Registration as Legitimate Workers Association (LWA) issued to the SAMAHAN NG
MGA MANGGAGAWA SA HANJIN SHIPYARD (SAMAHAN) with Registration Numbers R0300-
1002-WA-009 dated February 26, 2010 is hereby CANCELLED, and said association is dropped
from the roster of labor organizations of this Office.
SO DECIDED. 12
The Ruling of the Bureau of Labor Relations
Aggrieved, Samahan filed an appeal before the BLR, arguing that Hanjin had no right to petition for
13
the cancellation of its registration. Samahan pointed out that the words "Hanjin Shipyard," as used in
its application for registration, referred to a workplace and not as employer or company. It explained
that when a shipyard was put up in Subic, Zambales, it became known as Hanjin Shipyard. Further,
the remaining 63 members signed the Sama-Samang Pagpapatunay which stated that they were
either working or had worked at Hanjin. Thus, the alleged misrepresentation committed by Samahan
had no leg to stand on. 14
In its Comment to the Appeal, Hanjin averred that it was a party-ininterest. It reiterated that
15
Samahan committed misrepresentation in its application for registration before DOLE Pampanga.
While Samahan insisted that the remaining 63 members were either working, or had at least worked
in Hanjin, only 10 attested to such fact, thus, leaving its 53 members without any workplace to claim.
On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the Regional
Director. It stated that the law clearly afforded the right to self-organization to all workers including
those without definite employers. As an expression of the right to self-organization, industrial,
16
commercial and self-employed workers could form a workers' association if they so desired but
subject to the limitation that it was only for mutual aid and protection. Nowhere could it be found
17
that to form a workers' association was prohibited or that the exercise of a workers' right to self-
organization was limited to collective bargaining. 18
The BLR was of the opinion that there was no misrepresentation on the part of Samahan. The
phrase, "KAMI, ang mga Manggagawa sa Hanjin Shipyard," if translated, would be: "We, the
workers at Hanjin Shipyard." The use of the preposition "at" instead of "of' would indicate that "Hanjin
Shipyard" was intended to describe a place. Should Hanjin feel that the use of its name had
19
affected the goodwill of the company, the remedy was not to seek the cancellation of the
association's registration. At most, the use by Samahan of the name "Hanjin Shipyard" would only
warrant a change in the name of the association. Thus, the dispositive portion of the BLR decision
20
reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director Ernesto C.
Bihis dated 20 April 2010 is REVERSED and SET ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of
legitimate workers' association. 21
On October 14, 2010, Hanjin filed its motion for reconsideration. 22
In its Resolution, dated November 28, 2011, the BLR affirmed its September 6, 2010 Decision, but
23
directed Samahan to remove the words "Hanjin Shipyard" from its name. The BLR explained that the
Labor Code had no provision on the use of trade or business name in the naming of a worker's
association, such matters being governed by the Corporation Code. According to the BLR, the most
equitable relief that would strike a balance between the contending interests of Samahan and Hanjin
was to direct Samahan to drop the name "Hanjin Shipyard" without delisting it from the roster of
legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby AFFIRMED
with a DIRECTIVE for SAMAHAN to remove "HANJIN SHIPYARD" from its name.
SO RESOLVED. 24
Unsatisfied, Samahan filed a petition for certiorari under Rule 65 before the CA, docketed as CA-
25
G.R. SP No. 123397.
In its March 21, 2012 Resolution, the CA dismissed the petition because of Samahan's failure to file
26
a motion for reconsideration of the assailed November 28, 2011 Resolution.
On April 17, 2012, Samahan filed its motion for reconsideration and on July 18, 2012, Hanjin filed
27
its comment to oppose the same. On October 22, 2012, the CA issued a resolution granting
28
Samahan's motion for reconsideration and reinstating the petition. Hanjin was directed to file a
comment five (5) days from receipt of notice. 29
On December 12, 2012, Hanjin filed its comment on the petition, arguing that to require Samahan
30
to change its name was not tantamount to interfering with the workers' right to self-
organization. Thus, it prayed, among others, for the dismissalof the petition for Samahan's failure to
31
file the required motion for reconsideration.

32
On January 17, 2013, Samahan filed its reply. 33
On March 22, 2013, Hanjin filed its memorandum. 34
The Ruling of the Court of Appeals
On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as a
legitimate workers' association was contrary to the provisions of Article 243 of the Labor Code. It
35
stressed that only 57 out of the 120 members were actually working in Hanjin while the phrase in the
preamble of Samahan's Constitution and By-laws, "KAMI, ang mga Manggagawa sa Hanjin
Shipyard," created an impression that all its members were employees of HHIC. Such unqualified
manifestation which was used in its application for registration, was a clear proof of
misrepresentation which warranted the cancellation of Samahan' s registration.
It also stated that the members of Samahan could not register it as a legitimate worker's association
because the place where Hanjin's industry was located was not a rural area. Neither was there any
evidence to show that the members of the association were ambulant, intermittent or itinerant
workers.36
At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the association
name would not prejudice or impair its rightto self-organization because it could adopt other
appropriate names. The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the words "Hanjin
Shipyard" be removed from petitioner association's name, is AFFIRMED. The Decision dated April
20, 2010 of the DOLE Regional Director in Case No. Ro300-1003-CP-001, which ordered the
cancellation of petitioner association's registration is REINSTATED.
SO ORDERED. 37
Hence, this petition, raising the following
ISSUES
I. THE COURT OF APPEALS SEfilOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT FORM
A WORKERS' ASSOCIATION OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD HA VE
FORMED A UNION, HENCE THEIR REGISTRATION AS A WORKERS' ASSOCIATION SHOULD
BE CANCELLED.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REMOVAL/DELETION OF

THE WORD "HANJIN" IN THE NAME OF THE UNION BY REASON OF THE COMPANY'S
PROPERTY RIGHT OVER THE COMP ANY NAME "HANJIN." 38
Samahan argues that the right to form a workers' association is not exclusive to intermittent,
ambulant and itinerant workers. While the Labor Code allows the workers "to form, join or assist
labor organizations of their own choosing" for the purpose of collective bargaining, it does not
prohibit them from forming a labor organization simply for purposes of mutual aid and protection. All
members of Samahan have one common place of work, Hanjin Shipyard. Thus, there is no reason
why they cannot use "Hanjin Shipyard" in their name. 39
Hanjin counters that Samahan failed to adduce sufficient basis that all its members were employees
of Hanjin or its legitimate contractors, and that the use of the name "Hanjin Shipyard" would create
an impression that all its members were employess of HHIC. 40
Samahan reiterates its stand that workers with a definite employer can organize any association for
purposes of mutual aid and protection. Inherent in the workers' right to self-organization is its right to
name its own organization. Samahan referred "Hanjin Shipyard" as their common place of work.
Therefore, they may adopt the same in their association's name. 41
The Court's Ruling
The petition is partly meritorious.
Right to self-organization includes

right to form a union, workers '
association and labor management
councils
More often than not, the right to self-organization connotes unionism. Workers, however, can also
form and join a workers' association as well as labor-management councils (LMC). Expressed in the
highest law of the land is the right of all workers to self-organization. Section 3, Article XIII of the
1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. It shall
guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. xxx [Emphasis
Supplied]
And Section 8, Article III of the 1987 Constitution also states:

Section 8. The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be abridged.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of
work.
[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the right
to form, join or assist labor organizations fer the purpose of collective bargaining through
representatives of their own choosing and to engage in lawful concerted activities for the same
purpose for their mutual aid and protection. This is in line with the policy of the State to foster the
free and voluntary organization of a strong and united labor movement as well as to make sure that
workers participate in policy and decision-making processes affecting their rights, duties and
welfare.42
The right to form a union or association or to self-organization comprehends two notions, to wit: (a)
the liberty or freedom, that is, the absence of restraint which guarantees that the employee may act
for himself without being prevented by law; and (b) the power, by virtue of which an employee may,
as he pleases, join or refrain from joining an association. 43
In view of the revered right of every worker to self-organization, the law expressly allows and even
encourages the formation of labor organizations. A labor organization is defined as "any union or
association o[ employees which exists in whole or in part for the purpose of collective bargaining or
of dealing with employers concerning terms and conditions of employment." A labor organization
44
has two broad rights: (1) to bargain collectively and (2) to deal with the employer concerning terms
and conditions of employment. To bargain collectively is a right given to a union once it registers
itself with the DOLE. Dealing with the employer, on the other hand, is a generic description of
interaction between employer and employees concerning grievances, wages, work hours and other
terms and conditions of employment, even if the employees' group is not registered with the DOLE. 45
A union refers to any labor organization in the private sector organized for collective bargaining and
for other legitimate purpose, while a workers' association is an organization of workers formed for
46
the mutual aid and protection of its members or for any legitimate purpose other than
collective bargaining. 47
Many associations or groups of employees, or even combinations of only several persons, may
qualify as a labor organization yet fall short of constituting a labor union. While every labor union is a
labor organization, not every labor organization is a labor union. The difference is one of
organization, composition and operation. 48
Collective bargaining is just one of the forms of employee participation. Despite so much interest in
and the promotion of collective bargaining, it is incorrect to say that it is the device and no other,
which secures industrial democracy. It is equally misleading to say that collective bargaining is the
end-goal of employee representation. Rather, the real aim is employee participation in whatever
form it may appear, bargaining or no bargaining, union or no union. Any labor organization which
49
may or may not be a union may deal with the employer. This explains why a workers' association or
organization does not always have to be a labor union and why employer-employee collective
interactions are not always collective bargaining. 50
To further strengthen employee participation, Article 255 (now 261) of the Labor Code mandates
51
that workers shall have the right to participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and employers may form LMCs.
A cursory reading of the law demonstrates that a common element between unionism and the
formation of LMCs is the existence of an employer-employee relationship. Where neither party is an
employer nor an employee of the other, no duty to bargain collectively would exist. In the same
52
manner, expressed in Article 255 (now 261) is the requirement that such workers be employed in the
establishment before they can participate in policy and decision making processes.
In contrast, the existence of employer-employee relationship is not mandatory in the formation of

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

join a union or workers' association
belongs to workers themselves
In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should have
formed a union for purposes of collective bargaining instead of a workers' association because the
choice belonged to it. The right to form or join a labor organization necessarily includes the right to
refuse or refrain from exercising the said right. It is self-evident that just as no one should be denied
the exercise of a right granted by law, so also, no one should be compelled to exercise such a
conferred right. Also inherent in the right to self-organization is the right to choose whether to form a
53
union for purposes of collective bargaining or a workers' association for purposes of providing mutual
aid and protection.
The right to self-organization, however, is subject to certain limitations as provided by law. For
instance, the Labor Code specifically disallows managerial employees from joining, assisting or
forming any labor union. Meanwhile, supervisory employees, while eligible for membership in labor
organizations, are proscribed from joining the collective bargaining unit of the rank and file
employees. Even government employees have the right to self-organization. It is not, however,
54
regarded as existing or available for purposes of collective bargaining, but simply for the furtherance
and protection of their interests.
55
Hanjin posits that the members of Samahan have definite employers, hence, they should have
formed a union instead of a workers' association. The Court disagrees. There is no provision in the
Labor Code that states that employees with definite employers may form, join or assist unions only.
The Court cannot subscribe either to Hanjin's position that Samahan's members cannot form the
association because they are not covered by the second sentence of Article 243 (now 249), to wit:
Article 243. Coverage and employees' right to selforganization. All persons employed in

educational institutions, whether operating for profit or not, shall have the right to self-organization
and to form, join, or assist labor organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, selfemployed people, rural workers and
protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980)
[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department Order (D. 0.) No. 40-03,
Series of 2003, which provides:
RULE II
COVERAGE OF THE RIGHT TO SELF-ORGANIZATION
Section 1. Policy. - It is the policy of the State to promote the free and responsible exercise of the
right to self-organization through the establishment of a simplified mechanism for the speedy
registration of labor unions and workers associations, determination of representation status and
resolution of inter/intra-union and other related labor relations disputes. Only legitimate or registered
labor unions shall have the right to represent their members for collective bargaining and other
purposes. Workers' associations shall have the right to represent their members for purposes other
than collective bargaining.
Section 2. Who may join labor unions and workers' associations. - All persons employed in
commercial, industrial and agricultural enterprises, including employees of government owned or
controlled corporations without original charters established under the Corporation Code, as well as
employees of religious, charitable, medical or educational institutions whether operating for profit or
not, shall have the right to self-organization and to form, join or assist labor unions for purposes of
collective bargaining: provided, however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but may form, join or assist separate
labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor
unions for purposes of collective bargaining. Alien employees with valid working permits issued by
the Department may exercise the right to self-organization and join or assist labor unions for
purposes of collective bargaining if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite period or not, shall
beginning on the first day of his/her service, be eligible for membership in any labor organization.
All other workers, including ambulant, intermittent and other workers, the self-employed, rural
workers and those without any definite employers may form labor organizations for their mutual aid
and protection and other legitimate purposes except collective bargaining.
[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which provides that workers, with
definite employers, cannot form or join a workers' association for mutual aid and protection. Section
2 thereof even broadens the coverage of workers who can form or join a workers' association. Thus,
the Court agrees with Samahan's argument that the right to form a workers' association is not
exclusive to ambulant, intermittent and itinerant workers. The option to form or join a union or a
workers' association lies with the workers themselves, and whether they have definite employers or
not.
No misrepresentation on the part
of Samahan to warrant cancellation
of registration
In this case, Samahan's registration was cancelled not because its members were prohibited from
forming a workers' association but because they allegedly committed misrepresentation for using the
phrase, "KAMI, ang mga Manggagawa sa HANJIN Shipyard."
Misrepresentation, as a ground for the cancellation of registration of a labor organization, is

committed "in connection with the adoption, or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, the list of members who took part in the ratification
of the constitution and by-laws or amendments thereto, and those in connection with the election of
officers, minutes of the election of officers, and the list of voters, xxx."
56
In Takata Corporation v. Bureau of Relations, the DOLE Regional Director granted the petition for
57
the cancellation of certificate of registration of Samahang Lakas Manggagawa sa Takata (Salamat)

after finding that the employees who attended the organizational meeting fell short of the 20% union
registration requirement. The BLR, however, reversed the ruling of the DOLE Regional Director,
stating that petitioner Takata Corporation (Takata) failed to prove deliberate and malicious
misrepresentation on the part of respondent Salamat. Although Takata claimed that in the list of
members, there was an employee whose name appeared twice and another was merely a project
employee, such facts were not considered misrepresentations in the absence of showing that the
respondent deliberately did so for the purpose of increasing their union membership. The Court ruled
in favor of Salamat.
In S.S. Ventures International v. S.S. Ventures Labor Union, the petition for cancellation of
58
certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities, especially
those appearing on the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. Prescinding from these considerations, the
issuance to the Union of Certificate of Registration No. R0300-oo-02-UR-0003 necessarily implies
that its application for registration and the supporting documents thereof are prima facie free from
any vitiating irregularities. Another factor which militates against the veracity of the allegations in
the Sinumpaang Petisyon is the lack of particularities on how, when and where respondent
union perpetrated the alleged fraud on each member. Such details are crucial for in the
proceedings for cancellation of union registration on the ground of fraud or
misrepresentation, what needs to be established is that the specific act or omission of the union
deprived the complaining employees-members of their right to choose.
[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to be a ground for the
cancellation of the certificate of registration, must be done maliciously and deliberately. Further, the
mistakes appearing in the application or attachments must be grave or refer to significant matters.
The details as to how the alleged fraud was committed must also be indubitably shown.
The records of this case reveal no deliberate or malicious intent to commit misrepresentation on the
part of Samahan. The use of such words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in
1âwphi1
the preamble of the constitution and by-laws did not constitute misrepresentation so as to warrant
the cancellation of Samahan's certificate of registration. Hanjin failed to indicate how this phrase
constitutes a malicious and deliberate misrepresentation. Neither was there any showing that the
alleged misrepresentation was serious in character. Misrepresentation is a devious charge that
cannot simply be entertained by mere surmises and conjectures.
Even granting arguendo that Samahan' s members misrepresented themselves as employees or

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

from the association 's name, however,
does not infringe on Samahan 's right to
self-organization
Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in the name of
the association. A legitimate workers' association refers to an association of workers organized for
mutual aid and protection of its members or for any legitimate purpose other than collective
bargaining registered with the DOLE. Having been granted a certificate of registration, Samahan's
59
association is now recognized by law as a legitimate workers' association.
According to Samahan, inherent in the workers' right to selforganization is its right to name its own
organization. It seems to equate the dropping of words "Hanjin Shipyard" from its name as a
restraint in its exercise of the right to self-organization. Hanjin, on the other hand, invokes that
"Hanjin Shipyard" is a registered trade name and, thus, it is within their right to prohibit its use.
As there is no provision under our labor laws which speak of the use of name by a workers'
association, the Court refers to the Corporation Code, which governs the names of juridical persons.
Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange Commission if the proposed
name is identical or deceptively or confusingly similar to that of any existing corporation or to any
other name already protected by law or is patently deceptive, confusing or contrary to existing laws.
When a change in the corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.
[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a corporate name which
is "identical or deceptively or confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of fraud
upon the public which would have occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration and supervision over
corporations.60
For the same reason, it would be misleading for the members of Samahan to use "Hanjin Shipyard"
in its name as it could give the wrong impression that all of its members are employed by Hanjin.
Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:
The change of name of a labor organization shall not affect its legal personality. All the rights and
obligations of a labor organization under its old name shall continue to be exercised by the labor
organization under its new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of
Samahan's right to self-organization was committed.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the January
28, 2014 Resolution of the Court of Appeals are hereby REVERSED and SET ASIDE. The
September 6, 2010 Resolution of the Bureau of Labor Relations, as modified by its November 28,
2011 Resolution, is REINSTATED. SO ORDERED.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:
ARTURO D. BRION
Associate Justice
Acting Chairperson
DIOSDADO M. PERALTA MARIANO C. DEL CASTILLO


Associate Justice
ATTESTATION
was assigned to the writer of the opinion of the Court’s Division.
ARTURO D. BRION
Associate Justice
Acting Chairperson, Second Division
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution and the Division Acting Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s Division.
MARIA LOURDES P.A. SERENO
ChiefJustice
Footnotes
*
Per Special Order No. 2222, dated September 29, 2015.
**
PerS pecial Order No. 2223, dated September 29, 2015.
Rollo pp.22-30; penned by Associate Justice Hakim S. Abdulwahid, with Associate Justice
1
Marlene Gonzales-Sison and Associate Justice Edwin D. Sorongon, concurring.
2
Id. at 32.
3
CA rollo, pp. 118-123.
4
Id. at 86-91.
5
Id. at 31.
6
Id. at 61.
7
Id. at 62-68.
8
Id. at 69-75.
9
Id. at 87.
10
Id. at53.
11
Id. at 86-91.
12
Id. a t91.
13
Id. at 92-100.
14
Id. at 97.
15
Id.at101-114.
16
Id.atl21.
17
Id.at122.
18
Id.at121.
19
Id.
20
1d. at 123.
21
Id.
22
Id. at 124-140.
23
Id. at 29-30.
24
Id. at 30.
Id. at 3-21.
25
Id. at 144-145.
26
Id at 148-151.
27
Id. at 159-163.
28
Id. at 167-168.
29
Id. at 183-222.
30
Id. at 192.
31
Id. at 220.
32
Id. at 238-242.
33
Id. at 246-267.
34
Id. at 279.
35
Id. at 278.
36
Rollo, pp. 29-30.

37
Id. at 12.
38
Id. at 15.
39
Comment, id. at 50-73.

40
Reply, id. at 96-102.

41
Article 211(now217), Labor Code of the Philippines.

42
Knitjoy Mfg., Inc. v. Ferrer-Calleja, G.R. No. 81883, September 23, 1992, 214 SCRA 174.
43
Article 218 (g), Labor Code of the Philippines.

44
Azucena, The Labor Code with Comments and Cases, Volume 2, p. 127 (1996); Pascual,
45
Labor Relations Law, pp. 35-36.
Section 1 (zz), Omnibus Rules Implementing the Labor Code.

46
Section 1 (ccc), Omnibus Rules Implementing the Labor Code.

47
Azucena, p. 13, The Labor Code with Comments and Cases, Volume 2, 7th Edition, 2010.
48
Azucena, p. 417, The Labor Code with Comments and Cases, Volume 2, 7th Edition, 2010.
49
Supra note 45.
50
Article 255. Exclusive bargaining representation and workers' participation in policy and
51
decisionmaking. The labor organization designated or selected by the majority of the

employees in an appropriate collective bargaining unit shall be the exclusive representative
of the employees in such unit for the purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any time to present grievances to
their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose, workers and employers may form
labormanagement councils: Provided, That the representatives of the workers in
such labor-management councils shall be elected by at least the majority of all
employees in said establishment.
Allied Free Workers Union v. Compania Maritima, 19 Phil. 258, 278-279 (1967). (Azucena
52
351)
Reyes v. Trajano, 209 Phil. 484, 4891992).

53
Section 2, Rule 2, Department Order No. 40-03, Series of2003.

54
Arizala v. Court of Appeals, 267 Phil. 615, 629 (1990).

55
Section 3, Rule XIV, Department Order No. 40-03, Series of 2003.

56
G.R. No. 196276, June 4, 2014, 725 SCRA 61-76.

57
581 Phil. 405 (2008).

58
Section l(ff), Rule I, Department Order No. 40-03, Series of 2003.

59
Lyceum of the Philippines v. Court of Appeals, G.R. No. 101897, March 5, 1993, 219
60
SCRA 610, 615.
SUPREME COURT
Manila
EN BANC

G.R. No. 124678 July 31, 1997
DELIA BANGALISAN, LUCILIN CABALFIN, EMILIA DE GUZMAN, CORAZON GOMEZ,

CORAZON GREGORIO, LOURDES LAREDO, RODOLFO MARIANO, WILFREDO MERCADO,
LIGAYA MONTANCES and CORAZON PAGPAGUITAN, petitioners,
vs.
HON. COURT OF APPEALS, THE CIVIL SERVICE COMMISSION and THE SECRETARY OF
THE DEPARTMENT OF EDUCATION, CULTURE AND SPORTS, respondents.
REGALADO, J.:
This is an appeal by certiorari from the judgment of the Court of Appeals in CA-G.R. SP No. 38316,
which affirmed several resolutions of the Civil Service Commission finding petitioners guilty of
conduct prejudicial to the best interest of the service, as well as its resolution of April 12, 1996
denying petitioners' motion for reconsideration.1
Petitioners, except Rodolfo Mariano, were among the 800 public school teachers who staged "mass
actions" on September 17 to 19, 1990 to dramatize their grievances concerning, in the main, the
alleged failure of the public authorities to implement in a just and correct manner certain laws and
measures intended for their material benefit.
On September 17, 1990, the Secretary of the Department of Education, Culture and Sports (DECS)
issued a Return-to-Work Order. Petitioners failed to comply with said order, hence they were
charged by the Secretary with "grave misconduct; gross neglect of duty; gross violation of Civil
Service law, rules and regulations and reasonable office regulations; refusal to perform official duty;
gross insubordination; conduct prejudicial to the best interest of the service; and absence without
official leave in violation of PD 807, otherwise known as the Civil Service Decree of the Philippines."
They were simultaneously placed under preventive suspension.
Despite due notice, petitioners failed to submit their answer to the complaint. On October 30, 1990,
the DECS Secretary rendered a decision finding petitioners guilty as charged and dismissing them
from the service effective immediately.
Acting on the motions for reconsideration filed by petitioners Bangalisan, Gregorio, Cabalfin,
Mercado, Montances and Pagpaguitan, the Secretary subsequently modified the penalty of
dismissal to suspension for nine months without pay.
Petitioner Gomez likewise moved for reconsideration with the DECS and then appealed to the Merit
Systems Protection Board (MSPB). The other petitioners also filed individual appeals to the MSPB,
but all of their appeals were dismissed for lack of merit.
Not satisfied with the aforestated adjudication of their respective cases, petitioners appealed to the
Civil Service Commission (CSC). The appeals of petitioners Cabalfin, Montances and Pagpaguitan
were dismissed for having been filed out of time. On motion for reconsideration, however, the CSC
decided to rule on the merits of their appeal in the interest of justice.
Thereafter, the CSC issued Resolution No. 94-1765 finding Cabalfin guilty of conduct prejudicial to
the best interest of the service and imposing on him a penalty of six months suspension without pay.
The CSC also issued Resolutions Nos. 94-2806 and 94-2384 affirming the penalty of nine months
suspension without pay theretofore imposed on petitioners Montances and Pagpaguitan.
With respect to the appeals of the other petitioners, the CSC also found them guilty of conduct
prejudicial to the best interest of the service. It, however, modified the penalty of nine months
suspension previously meted to them to six months suspension with automatic reinstatement in the
service but without payment of back wages.
All the petitioners moved for reconsideration of the CSC resolutions but these were all
denied, except that of petitioner Rodolfo Mariano who was found guilty only of a violation of
2
reasonable office rules and regulations because of his failure to inform the school of his intended
absence and to file an application for leave therefor. This petitioner was accordingly given only a
reprimand. 3
Petitioners then filed a petition for certiorari with this Court but, on August 29, 1995, their petition
was referred to the Court of Appeals pursuant to Revised Administrative Circular No. 1-95. 4
On October 20, 1995, the Court of Appeals dismissed the petition for lack of merit. Petitioners'
5
motion for reconsideration was also denied by respondent court, hence the instant petition alleging
6
that the Court of Appeals committed grave abuse of discretion when it upheld the resolutions of the
CSC (1) that penalized petitioners whose only offense was to exercise their constitutional right to
peaceably assemble and petition the government for redress of grievances; (2) that penalized
petitioner Mariano even after respondent commission found out that the specific basis of the charges
that former Secretary Cariño filed against him was a falsehood; and (3) that denied petitioners their
right to back wages covering the period when they were illegally not allowed to teach. 7
It is the settled rule in this jurisdiction that employees in the public service may not engage in strikes.
While the Constitution recognizes the right of government employees to organize, they are
prohibited from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass
action which will result in temporary stoppage or disruption of public services. The right of
government employees to organize is limited only to the formation of unions or associations, without
including the right to strike.
8
Petitioners contend, however, that they were not on strike but were merely exercising their
constitutional right peaceably to assemble and petition the government for redress of grievances.
We find such pretension devoid of merit.
The issue of whether or not the mass action launched by the public school teachers during the
period from September up to the first half of October, 1990 was a strike has been decided by this
Court in a resolution, dated December 18, 1990, in the herein cited case of Manila Public School
Teachers Association, et al. vs. Laguio, Jr., supra. It was there held "that from the pleaded and
admitted facts, these 'mass actions' were to all intents and purposes a strike; they constituted a
concerted and unauthorized stoppage of, or absence from, work which it was the teachers' duty to
perform, undertaken for essentially economic reasons."
It is an undisputed fact that there was a work stoppage and that petitioners' purpose was to realize
their demands by withholding their services. The fact that the conventional term "strike" was not
used by the striking employees to describe their common course of action is inconsequential, since
the substance of the situation, and not its appearance, will be deemed to be controlling. 9
The ability to strike is not essential to the right of association. In the absence of statute, public
employees do not have the right to engage in concerted work stoppages for any purpose. 10
Further, herein petitioners, except Mariano, are being penalized not because they exercised their
right of peaceable assembly and petition for redress of grievances but because of their successive
unauthorized and unilateral absences which produced adverse effects upon their students for whose
education they are responsible. The actuations of petitioners definitely constituted conduct
prejudicial to the best interest of the service, punishable under the Civil Service law, rules and
regulations.
As aptly stated by the Solicitor General, "It is not the exercise by the petitioners of their constitutional
right to peaceably assemble that was punished, but the manner in which they exercised such right
which resulted in the temporary stoppage or disruption of public service and classes in various public
schools in Metro Manila. For, indeed, there are efficient but non-disruptive avenues, other than the
mass actions in question, whereby petitioners could petition the government for redress of
grievances." 11
It bears stressing that suspension of public services, however temporary, will inevitably derail
services to the public, which is one of the reasons why the right to strike is denied government
employees. It may be conceded that the petitioners had valid grievances and noble intentions in
12
staging the "mass actions," but that will not justify their absences to the prejudice of innocent school
children. Their righteous indignation does not legalize an illegal work stoppage.
As expounded by this Court in its aforementioned resolution of December 18, 1990, in the Manila
Public School Teachers Association case, ante:
It is, of course, entirely possible that petitioners and their member-teachers had and
have some legitimate grievances. This much may be conceded. After all, and for one
thing, even the employees of the Court have found reason to complain about the
manner in which the provisions of the salary standardization law on pay adjustments
and position classification have been, or are being, implemented. Nonetheless, what
needs to be borne in mind, trite though it may be, is that one wrong cannot be righted
by another, and that redress, for even the most justifiable complaints, should not be
sought through proscribed or illegal means. The belief in the righteousness of their
cause, no matter how deeply and fervently held, gives the teachers concerned no
license to abandon their duties, engage in unlawful activity, defy constituted authority
and set a bad example to their students.
Petitioners also assail the constitutionality of Memorandum Circular No. 6 issued by the Civil Service
Commission. The resolution of the said issue is not really necessary in the case at bar. The
argument of petitioners that the said circular was the basis of` their liability is off tangent.
As a general rule, even in the absence of express statutory prohibition like Memorandum Circular
No. 6, public employees are denied the right to strike or engage in a work stoppage against a public
employer. The right of the sovereign to prohibit strikes or work stoppages by public employees was
13
clearly recognized at common law. Indeed, it is frequently declared that modern rules which prohibit
such strikes, either by statute or by judicial decision, simply incorporate or reassert the common law
rule.
14
To grant employees of the public sector the right to strike, there must be a clear and direct legislative
authority therefor. In the absence of any express legislation allowing government employees to
15
strike, recognizing their right to do so, or regulating the exercise of the right, employees in the public
service may not engage in strikes, walkouts and temporary work stoppages like workers in the
private sector. 16
On the issue of back wages, petitioners' claim is premised on the allegation that their preventive
suspension, as well as the immediate execution of the decision dismissing or suspending them, are
illegal. These submissions are incorrect.
Section 51 of Executive Order No. 292 provides that "(t)he proper disciplining authority may
preventively suspend any subordinate officer or employee under his authority pending an
investigation, if the charge against such officer or employee involves dishonesty, oppression or
grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the
respondent is guilty of charges which would warrant his removal from the service."
Under the aforesaid provision, it is the nature of the charge against an officer or employee which
determines whether he may be placed under preventive suspension. In the instant case, herein
petitioners were charged by the Secretary of the DECS with grave misconduct, gross neglect of
duty, gross violation of Civil Service law, rules and regulations, and reasonable office regulations,
refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the
service and absence without official leave (AWOL), for joining the teachers' mass actions held at
Liwasang Bonifacio on September 17 to 21, 1990. Hence, on the basis of the charges against them,
it was within the competence of the Secretary to place herein petitioners under preventive
suspension.
As to the immediate execution of the decision of the Secretary against petitioners, the same is
authorized by Section 47, paragraph (2), of Executive Older No. 292, thus: "The Secretaries and
heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action against officers and employees under
their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not
more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same shall be executory
except when the penalty is removal, in which case the same shall be executory only after
confirmation by the Secretary concerned."
Petitioners' claim of denial of due process must also fail. The records of this case clearly show that
they were given opportunity to refute the charges against them but they failed to avail themselves of
the same. The essence of due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to seek reconsideration of the action or ruling complained
of. For as long as the parties were given the opportunity to be heard before judgment was
17
rendered, the demands of due process were sufficiently met. 18
Having ruled that the preventive suspension of petitioners and the immediate execution of the DECS
decision are in accordance with law, the next query is whether or not petitioners may be entitled to
back wages.
The issue regarding payment of back salaries during the period of suspension of a member of the
civil service who is subsequently ordered reinstated, is already settled in our jurisdiction. Such
payment of salaries corresponding to the period when an employee is not allowed to work may be
decreed if he is found innocent of the charges which caused the suspension and when the
suspension is unjustified.
19
With respect to petitioner Rodolfo Mariano, payment of his back wages is in order. A reading of the
resolution of the Civil Service Commission will show that he was exonerated of the charges which
formed the basis for his suspension. The Secretary of the DECS charged him with and he was later
found guilty of grave misconduct, gross neglect of duty, gross violation of the Civil Service Law, rules
and regulations and reasonable office regulations, refusal to perform official duty, gross
insubordination conduct prejudicial to the best interest of the service, and absence without official
leave, for his participation in the mass actions on September 18, 20 and 21, 1990. It was his alleged
participation in the mass actions that was the basis of his preventive suspension and, later, his
dismissal from the service.
However, the Civil Service Commission, in the questioned resolution, made a finding that Mariano
was not involved in the "mass actions" but was absent because he was in Ilocos Sur to attend the
wake and interment of his grandmother. Although the CSC imposed upon him the penalty of
reprimand, the same was for his violation of reasonable office rules and regulations because he
failed to inform the school or his intended absence and neither did he file an application for leave
covering such absences. 20
Under Section 23 of the Rules Implementing Book V of Executive Order No. 292 and other pertinent
civil service laws, in violations of reasonable office rules and regulations, the first offense is
punishable by reprimand. To deny petitioner Mariano his back wages during his suspension would
be tantamount to punishing him after his exoneration from the charges which caused his dismissal
from the service. 21
However, with regard to the other petitioners, the payment of their back wages must be denied.
Although the penalty imposed on them was only suspension, they were not completely exonerated
of the charges against them. The CSC made specific findings that, unlike petitioner Mariano, they
indeed participated in the mass actions. It will be noted that it was their participation in the mass
actions that was the very basis of the charges against them and their subsequent suspension.
The denial of salary to an employee during the period of his suspension, if he should later be found
guilty, is proper because he had given ground for his suspension. It does not impair his constitutional
rights because the Constitution itself allows suspension for cause as provided by law and the law
provides
that an employee may be suspended pending an investigation or by way of penalty. 22
Moreover, the general proposition is that a public official is not entitled to any compensation if he has
not rendered any service. As he works, he shall earn. Since petitioners did not work during the
period for which they are now claiming salaries, there can be no legal or equitable basis to order the
payment of such salaries. 23
It is also noteworthy that in its resolutions, the Civil Service Commission expressly denied
petitioners' right to back wages. In the case of Yacia vs. City of Baguio, the decision of the
24
Commissioner of Civil Service ordering the dismissal of a government employee on the ground of
dishonesty was immediately executed pending appeal, but, on appeal, the Civil Service Board of
Appeals modified that penalty to a fine equivalent to six months pay. We ruled that the claim of an
employee for back wages, for the period during which he was not allowed to work because of the
execution of the decision of the Commissioner, should be denied.
The appeal board's modified decision did not exonerate the employee nor did it affect the validity of
his dismissal or separation from work pending appeal, as ordered by the Civil Service
Commissioner. Such separation from work pending his appeal remained valid and effective until it
was set aside and modified with the imposition of the lesser penalty by the appeals board. If the Civil
Service Appeals Board had intended to grant him back salaries and to reduce his penalty to six
months fine deductible from such unearned back salaries, the board could and should have so
expressly stated in its decision.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED, but with the
MODIFICATION that petitioner Rodolfo Mariano shall be given back wages without deduction or
qualification from the time he was suspended until his actual reinstatement which, under prevailing
jurisprudence, should not exceed five years.
SO ORDERED.
Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco,
Hermosisima, Jr. and Panganiban, JJ., concur.
Narvasa, C.J. and Torres, Jr., J., are on leave.
Footnotes
1 Penned by Justice Antonio M. Martinez, with Justices Delilah Vidallon-Magtolis and

Romeo Callejo, Sr. concurring.
2 Rollo, CA-G.R. SP No. 38316, 50-85.
3 Ibid., id., 70-71.
4 Ibid., id., 131.
5 Rollo, 79-89.
6 Ibid., 91.
7 Ibid., 20-21.
8 See Manila Public School Teachers Association, et al. vs. Laguio, Jr., G.R. Nos.
95445 and 95590, August 6, 1991, 200 SCRA 323; Social Security System
Employees Association, et al. vs. Court of Appeals, et al., G.R. No. 85279, July 28,
1989, 175 SCRA 686; Alliance of Government Workers, et al. vs. Minister of Labor
and Employment, G.R. No 60403, August 3, 1983, 124 SCRA 1.
9 Board of Education v. New Jersey Education Association (1968) 53 NJ 29, 247

A2d 867.
10 48A Am. Jur. 2d, Public Employees, Sec. 2026, 407.
11 Rollo, 141-142.
12 Social Security System Employees Association, et al. vs. Court of Appeals, et

al., supra.
13 Public Employees — Right To Strike, 37 ALR 3d 1156.
14 Ibid., 1150.
15 The Pinellas County Classroom Teachers Association, Inc. vs. The Board of
Public Instruction of Pinellas County, Fla., 214 So. 2d 34.
16 Social Security System Employees Association, et al. vs. Court of Appeals, et

al. supra.
17 Sunset View Condominium Corporation vs. National Labor Relations

Commission, et al., G.R. No. 87799, December 15, 1993, 228 SCRA 466; Bautista
vs. Secretary of Labor, G.R. No. 81374, April 30, 1991, 196 SCRA 470.
18 Lindo vs. COMELEC, G.R. No. 95016, February 11, 1991, 194 SCRA
251; see Esber, et al. vs. Sto. Tomas, et al., G.R. No. 107324, August 26, 1993, 225
SCRA 664.
19 Miranda vs. Commission on Audit, G.R. No. 84613, August 16, 1991, 200 SCRA
657; Abellera vs. City of Baguio, et al., G.R. No. L-23957, Match 18, 1967, 125
SCRA 1033; Tanala vs. Legaspi, et al., G.R. No. L-22537, March 31, 1965, 13 SCRA
566.
20 Rollo, 100-101.
21 See Tanala vs. Legaspi, et al., supra; Tan vs. Gimenez, et al., 107 Phil. 17

(1960).
22 Austria vs. Auditor General, G.R. No. L-21918, January 23, 1967, 19 SCRA 79.
23 See Sales vs. Mathay, Sr., et al., G.R. No. L-39557, May 3, 1984, 129 SCRA 180;
Reyes vs. Hernandez, 71 Phil. 397 (1941).
24 G.R. No. L-27562, May 29, 1970, 33 SCRA 419.
SECOND DIVISION
G.R. No. 170132 December 6, 2006
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and WINSTON F. GARCIA, in his

capacity as GSIS President & General Manager, petitioners,
vs.
KAPISANAN NG MGA MANGGAGAWA SA GSIS, respondents.
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, the Government Service
Insurance System (GSIS) and its President and General Manager Winston F. Garcia (Garcia, for
short) assail and seek to nullify the Decision1 dated June 16, 2005 of the Court of Appeals (CA)
in CA-G.R. SP No. 87220, as reiterated in its Resolution2 of October 18, 2005 denying Garcia's
motion for reconsideration.
The recourse is cast against the following setting:
A four-day October 2004 concerted demonstration, rallies and en masse walkout waged/held in front
of the GSIS main office in Roxas Boulevard, Pasay City, started it all. Forming a huge part of the
October 4 to October 7, 2004 mass action participants were GSIS personnel, among them members
of the herein respondent Kapisanan Ng Mga Manggagawa sa GSIS ("KMG" or the "Union"), a public
sector union of GSIS rank-and-file employees. Contingents from other government agencies joined
causes with the GSIS group. The mass action's target appeared to have been herein petitioner
Garcia and his management style. While the Mayor of Pasay City allegedly issued a rally permit, the
absence of the participating GSIS employees was not covered by a prior approved leave.3
On or about October 10, 2004, the manager of the GSIS Investigating Unit issued a memorandum
directing 131 union and non-union members to show cause why they should not be charged
administratively for their participation in said rally. In reaction, KMG's counsel, Atty. Manuel Molina,
sought reconsideration of said directive on the ground, among others, that the subject employees
resumed work on October 8, 2004 in obedience to the return-to-work order thus issued. The plea for
reconsideration was, however, effectively denied by the filing, on October 25, 2004, of administrative
charges against some 110 KMG members for grave misconduct and conduct prejudicial to the best
interest of the service.4
What happened next is summarized by the CA in its challenged decision of June 16, 2005, albeit the
herein petitioners would except from some of the details of the appellate court's narration:
Ignoring said formal charges, KMG, thru its President, Albert Velasco, commenced the
instant suit on November 2, 2004, with the filing of the Petition for Prohibition at bench. On
the ground that its members should not be made to explain why they supported their union's
cause, petitioner [KMG] faulted respondent [Garcia] with blatant disregard of Civil Service
Resolution No. 021316, otherwise known as the Guidelines for Prohibited Mass Action,
Section 10 of which exhorts government agencies to "harness all means within their capacity
to accord due regard and attention to employees' grievances and facilitate their speedy and
amicable disposition through the use of grievance machinery or any other modes of
settlement sanctioned by law and existing civil service rules." Two supplements to the
foregoing petition were eventually filed by KMG. The first, … apprised [the CA] of the
supposed fact that its Speaker, Atty. Molina, had been placed under preventive suspension
for 90 days and that the formal charges thus filed will not only deprive its members of the
privileges and benefits due them but will also disqualify them from promotion, step increment
adjustments and receipt of monetary benefits, including their 13th month pay and Christmas
bonuses. The second, xxx manifested that, on December 17, 2004, respondent [Garcia]
served a spate of additional formal charges against 230 of KMG's members for their
participation in the aforesaid grievance demonstrations.
In his December 14, 2004 comment to the foregoing petition, respondent [Garcia] averred
that the case at bench was filed by an unauthorized representative in view of the fact that
Albert Velasco had already been dropped from the GSIS rolls and, by said token, had
ceased to be a member – much less the President – of KMG. Invoking the rule against forum
shopping, respondent [Garcia] called [the CA's] attention to the supposed fact that the
allegations in the subject petition merely duplicated those already set forth in two petitions for
certiorari and prohibition earlier filed by Albert Velasco …. Because said petitions are, in
point of fact, pending before this court as CA-G.R. SP Nos. 86130 and 86365, respondent
[Garcia] prayed for the dismissal of the petition at bench ….5 (Words in bracket added.)
It appears that pending resolution by the CA of the KMG petition for prohibition in this case, the
GSIS management proceeded with the investigation of the administrative cases filed. As
represented in a pleading before the CA, as of May 18, 2005, two hundred seven (207) out of the
two hundred seventy eight (278) cases filed had been resolved, resulting in the exoneration of
twenty (20) respondent-employees, the reprimand of one hundred eighty two (182) and the
suspension for one month of five (5).6
On June 16, 2005, the CA rendered the herein assailed decision7 holding that Garcia's "filing of
administrative charges against 361 of [KMG's] members is tantamount to grave abuse of discretion
which may be the proper subject of the writ of prohibition." Dispositively, the decision reads:
WHEREFORE, premises considered, the petition [of KMG] is GRANTED and respondent

[Winston F. Garcia] is hereby PERPETUALLY ENJOINED from implementing the issued
formal charges and from issuing other formal charges arising from the same facts and
events.
SO ORDERED. (Emphasis in the original)
Unable to accept the above ruling and the purported speculative factual and erroneous legal
premises holding it together, petitioner Garcia sought reconsideration. In its equally assailed
Resolution8 of October 18, 2005, however, the appellate court denied reconsideration of its decision.
Hence, this recourse by the petitioners ascribing serious errors on the appellate court in granting the
petition for prohibition absent an instance of grave abuse of authority on their part.
We resolve to GRANT the petition.
It should be stressed right off that the civil service encompasses all branches and agencies of the
Government, including government-owned or controlled corporations (GOCCs) with original
charters, like the GSIS,9 or those created by special law.10 As such, employees of covered GOCCs
are part of the civil service system and are subject to circulars, rules and regulations issued by the
Civil Service Commission (CSC) on discipline, attendance and general terms/conditions of
employment, inclusive of matters involving self-organization, strikes, demonstrations and like
concerted actions. In fact, policies established on public sector unionism and rules issued on mass
action have been noted and cited by the Court in at least a case.11 Among these issuances is
Executive Order (EO) No. 180, series of 1987, providing guidelines for the exercise of the right to
organize of government employees. Relevant also is CSC Resolution No. 021316 which provides
rules on prohibited concerted mass actions in the public sector.
There is hardly any dispute about the formal charges against the 278 affected GSIS employees – a
mix of KMG union and non-union members - having arose from their having gone on unauthorized
leave of absence (AWOL) for at least a day or two in the October 4 to 7, 2004 stretch to join the
ranks of the demonstrators /rallyists at that time. As stated in each of the formal charges, the
employee's act of attending, joining, participating and taking part in the strike/rally is a transgression
of the rules on strike in the public sector. The question that immediately comes to the fore, therefore,
is whether or not the mass action staged by or participated in by said GSIS employees partook of a
strike or prohibited concerted mass action. If in the affirmative, then the denounced filing of the
administrative charges would be prima facie tenable, inasmuch as engaging in mass actions
resulting in work stoppage or service disruption constitutes, in the minimum, the punishable offense
of acting prejudicial to the best interest of the service.12 If in the negative, then such filing would
indeed smack of arbitrariness and justify the issuance of a corrective or preventive writ.
Petitioners assert that the filing of the formal charges are but a natural consequence of the service-
disrupting rallies and demonstrations staged during office hours by the absenting GSIS employees,
there being appropriate issuances outlawing such kinds of mass action. On the other hand, the CA,
agreeing with the respondent's argument, assumed the view and held that the organized
demonstrating employees did nothing more than air their grievances in the exercise of their "broader
rights of free expression"13 and are, therefore, not amenable to administrative sanctions. For
perspective, following is what the CA said:
Although the filing of administrative charges against [respondent KMG's] members is well
within [petitioner Garcia's] official [disciplinary] prerogatives, [his] exercise of the power
vested under Section 45 of Republic Act No. 8291 was tainted with arbitrariness and
vindictiveness against which prohibition was sought by [respondent]. xxx the fact that the
subject mass demonstrations were directed against [Garcia's] supposed mismanagement of
the financial resources of the GSIS, by and of itself, renders the filing of administrative
charges against [KMG's] member suspect. More significantly, we find the gravity of the
offenses and the sheer number of persons … charged administratively to be, at the very
least, antithetical to the best interest of the service….
It matters little that, instead of the 361 alleged by petitioner, only 278 charges were actually
filed [and] in the meantime, disposed of and of the said number, 20 resulted to exoneration,
182 to reprimand and 5 to the imposition of a penalty of one month suspension. Irrespective
of their outcome, the severe penalties prescribed for the offense with which petitioner's
members were charged, to our mind, bespeak of bellicose and castigatory reaction …. The
fact that most of the employees [Garcia] administratively charged were eventually meted with
what appears to be a virtual slap on the wrist even makes us wonder why respondent even
bothered to file said charges at all. xxx.
Alongside the consequences of the right of government employees to form, join or assist
employees organization, we have already mentioned how the broader rights of free
expression cast its long shadow over the case. xxx we find [petitioner Garcia's] assailed acts,
on the whole, anathema to said right which has been aptly characterized as preferred, one
which stands on a higher level than substantive economic and other liberties, the matrix of
other important rights of our people. xxx.14 (Underscoring and words in bracket added;
citations omitted.)
While its decision and resolution do not explicitly say so, the CA equated the right to form
associations with the right to engage in strike and similar activities available to workers in the private
sector. In the concrete, the appellate court concluded that inasmuch as GSIS employees are not
barred from forming, joining or assisting employees' organization, petitioner Garcia could not validly
initiate charges against GSIS employees waging or joining rallies and demonstrations
notwithstanding the service-disruptive effect of such mass action. Citing what Justice Isagani Cruz
said in Manila Public School Teachers Association [MPSTA] v. Laguio, Jr.,15 the appellate court
declared:
It is already evident from the aforesaid provisions of Resolution No. 021316 that employees
of the GSIS are not among those specifically barred from forming, joining or assisting
employees organization such as [KMG]. If only for this ineluctable fact, the merit of the
petition at bench is readily discernible.16
We are unable to lend concurrence to the above CA posture. For, let alone the fact that it ignores
what the Court has uniformly held all along, the appellate court's position is contrary to what Section
4 in relation to Section 5 of CSC Resolution No. 02131617 provides. Besides, the appellate court's
invocation of Justice Cruz's opinion in MPSTA is clearly off-tangent, the good Justice's opinion
thereat being a dissent. It may be, as the appellate court urged¸ that the freedom of expression and
assembly and the right to petition the government for a redress of grievances stand on a level higher
than economic and other liberties. Any suggestion, however, about these rights as including the right
on the part of government personnel to strike ought to be, as it has been, trashed. We have made
this abundantly clear in our past determinations. For instance, in Alliance of Government Workers v.
Minister of Labor and Employment,18 a case decided under the aegis of the 1973 Constitution, an en
banc Court declared that it would be unfair to allow employees of government corporations to resort
to concerted activity with the ever present threat of a strike to wring benefits from Government. Then
came the 1987 Constitution expressly guaranteeing, for the first time, the right of government
personnel to self-organization19 to complement the provision according workers the right to engage in
"peaceful concerted activities, including the right to strike in accordance with law."20
It was against the backdrop of the aforesaid provisions of the 1987 Constitution that the Court
resolved Bangalisan v. Court of Appeals.21 In it, we held, citing MPSTA v. Laguio, Jr.,22 that
employees in the public service may not engage in strikes or in concerted and unauthorized
stoppage of work; that the right of government employees to organize is limited to the formation of
unions or associations, without including the right to strike.
Jacinto v. Court of Appeals23 came next and there we explained:
Specifically, the right of civil servants to organize themselves was positively recognized in
Association of Court of Appeals Employees vs. Ferrer-Caleja. But, as in the exercise of the
rights of free expression and of assembly, there are standards for allowable
limitations such as the legitimacy of the purpose of the association, [and] the overriding
considerations of national security . . . .
As regards the right to strike, the Constitution itself qualifies its exercise with the provision "in
accordance with law." This is a clear manifestation that the state may, by law, regulate the
use of this right, or even deny certain sectors such right. Executive Order 180 which provides
guidelines for the exercise of the right of government workers to organize, for instance,
implicitly endorsed an earlier CSC circular which "enjoins under pain of administrative
sanctions, all government officers and employees from staging strikes, demonstrations,
mass leaves, walkouts and other forms of mass action which will result in temporary
stoppage or disruption of public service" by stating that the Civil Service law and rules
governing concerted activities and strikes in government service shall be observed.
(Emphasis and words in bracket added; citations omitted)
And in the fairly recent case of Gesite v. Court of Appeals,24 the Court defined the limits of the right of
government employees to organize in the following wise:
It is relevant to state at this point that the settled rule in this jurisdiction is that employees in
the public service may not engage in strikes, mass leaves, walkouts, and other forms of
mass action that will lead in the temporary stoppage or disruption of public service. The right
of government employees to organize is limited to the formation of unions or associations
only, without including the right to strike,
adding that public employees going on disruptive unauthorized absences to join concerted mass
actions may be held liable for conduct prejudicial to the best interest of the service.
Significantly, 1986 Constitutional Commission member Eulogio Lerum, answering in the negative the
poser of whether or not the right of government employees to self-organization also includes the
right to strike, stated:
When we proposed this amendment providing for self organization of government

employees, it does not mean that because they have the right to organize, they have also
the right to strike. That is a different matter. xxx25
With the view we take of the events that transpired on October 4-7, 2004, what respondent's
members launched or participated in during that time partook of a strike or, what contextually
amounts to the same thing, a prohibited concerted activity. The phrase "prohibited concerted
activity" refers to any collective activity undertaken by government employees, by themselves or
through their employees' organization, with the intent of effecting work stoppage or service disruption
in order to realize their demands or force concessions, economic or otherwise; it includes mass
leaves, walkouts, pickets and acts of similar nature.26 Indeed, for four straight days, participating
KMG members and other GSIS employees staged a walk out and waged or participated in a mass
protest or demonstration right at the very doorstep of the GSIS main office building. The record of
attendance27 for the period material shows that, on the first day of the protest, 851 employees,
or forty eight per cent (48%) of the total number of employees in the main office (1,756) took to the
streets during office hours, from 6 a.m. to 2 p.m.,28 leaving the other employees to fend for
themselves in an office where a host of transactions take place every business day. On the second
day, 707 employees left their respective work stations, while 538 participated in the mass action on
the third day. A smaller number, i.e., 306 employees, but by no means an insignificant few, joined
the fourth day activity.
To say that there was no work disruption or that the delivery of services remained at the usual level
of efficiency at the GSIS main office during those four (4) days of massive walkouts and wholesale
absences would be to understate things. And to place the erring employees beyond the reach of
administrative accountability would be to trivialize the civil service rules, not to mention the
compelling spirit of professionalism exacted of civil servants by the Code of Conduct and Ethical
Standards for Public Officials and Employees. 29
The appellate court made specific reference to the "parliament of the streets," obviously to lend
concurrence to respondent's pretension that the gathering of GSIS employees on October 4-7, 2004
was an "assembly of citizens" out only to air grievances, not a striking crowd. According to the
respondent, a strike presupposes a mass action undertaken to press for some economic demands
or secure additional material employment benefits.
We are not convinced.
In whatever name respondent desires to call the four-day mass action in October 2004, the stubborn
fact remains that the erring employees, instead of exploring non-crippling activities during their free
time, had taken a disruptive approach to attain whatever it was they were specifically after. As
events evolved, they assembled in front of the GSIS main office building during office hours and
staged rallies and protests, and even tried to convince others to join their cause, thus provoking work
stoppage and service-delivery disruption, the very evil sought to be forestalled by the prohibition
against strikes by government personnel.30
The Court can concede hypothetically that the protest rally and gathering in question did not involve
some specific material demand. But then the absence of such economic-related demand, even if
true, did not, under the premises, make such mass action less of a prohibited concerted activity. For,
as articulated earlier, any collective activity undertaken by government employees with the intent of
effecting work stoppage or service disruption in order to realize their demands or force concessions,
economic or otherwise, is a prohibited concerted mass action31 and doubtless actionable
administratively. Bangalisan even went further to say the following: "[i]n the absence of statute,
public employees do not have the right to engage in concerted work stoppages for any purpose."
To petitioner Garcia, as President and General Manager of GSIS, rests the authority and
responsibility, under Section 45 of Republic Act No. 8291, the GSIS Act of 1997, to remove, suspend
or otherwise discipline GSIS personnel for cause.32 At bottom then, petitioner Garcia, by filing or
causing the filing of administrative charges against the absenting participants of the October 4-7,
2004 mass action, merely performed a duty expected of him and enjoined by law. Regardless of the
mood petitioner Garcia was in when he signed the charge sheet, his act can easily be sustained as
legally correct and doubtless within his jurisdiction.
It bears to reiterate at this point that the GSIS employees concerned were proceeded against - and
eventually either exonerated, reprimanded or meted a one-month suspension, as the case may be -
not for the exercise of their right to assemble peacefully and to petition for redress of grievance, but
for engaging in what appeared to be a prohibited concerted activity. Respondent no less admitted
that its members and other GSIS employees might have disrupted public service.33
To be sure, arbitrariness and whimsical exercise of power or, in fine, grave abuse of discretion on
the part of petitioner Garcia cannot be simplistically inferred from the sheer number of those charged
as well as the gravity or the dire consequences of the charge of grave misconduct and conduct
prejudicial to the best interest of the service, as the appellate court made it to appear. The principle
of accountability demands that every erring government employee be made answerable for any
malfeasance or misfeasance committed. And lest it be overlooked, the mere filing of formal
administrative case, regardless of the gravity of the offense charged, does not overcome the
presumptive innocence of the persons complained of nor does it shift the burden of evidence to
prove guilt of an administrative offense from the complainant.
Moreover, the Court invites attention to its holding in MPSTA v. Laguio, Jr., a case involving over
800 public school teachers who took part in mass actions for which the then Secretary of Education
filed administrative complaints on assorted charges, such as gross misconduct. Of those charged,
650 were dismissed and 195 suspended for at least six (6) months The Court, however, did not
consider the element of number of respondents thereat and/or the dire consequences of the
charge/s as fatally vitiating or beclouding the bona fides of the Secretary of Education's challenged
action. Then as now, the Court finds the filing of charges against a large number of persons and/or
the likelihood that they will be suspended or, worse, dismissed from the service for the offense as
indicating a strong and clear case of grave abuse of authority to justify the issuance of a writ of
prohibition.
The appellate court faulted petitioner Garcia for not first taping existing grievance machinery and
other modes of settlement agreed upon in the GSIS-KMG Collective Negotiations Agreement (CAN)
before going full steam ahead with his formal charges.34
The Court can plausibly accord cogency to the CA's angle on grievance procedure but for the fact
that it conveniently disregarded what appears to be the more relevant provision of the CNA. We refer
to Article VI which reads:
The GSIS Management and the KMG have mutually agreed to promote the principle of
shared responsibility … on all matters and decisions affecting the rights, benefits and
interests of all GSIS employees …. Accordingly, … the parties also mutually agree that the
KMG shall not declare a strike nor stage any concerted action which will disrupt public
service and the GSIS management shall not lockout employees who are members of the
KMG during the term of this agreement. GSIS Management shall also respect the rights of
the employees to air their sentiments through peaceful concerted activities during allowable
hours, subject to reasonable office rules ....35 (Underscoring added)
If the finger of blame, therefore, is to be pointed at someone for non-exhaustion of less

confrontational remedies, it should be at the respondent union for spearheading a concerted mass
action without resorting to available settlement mechanism. As it were, it was KMG, under Atty.
Alberto Velasco, which opened fire first. That none of the parties bothered to avail of the grievance
procedures under the GSIS-KMG CNA should not be taken against the GSIS. At best, both GSIS
management and the Union should be considered as in pari delicto.
With the foregoing disquisitions, the Court finds it unnecessary to discuss at length the legal
standing of Alberto Velasco to represent the herein respondent union and to initiate the underlying
petition for prohibition. Suffice it to state that Velasco, per Joint Resolution No. 04-10-01 approved
on October 5, 2004 by the KMG Joint Executive-Legislative Assembly, had ceased to be member,
let alone president, of the KMG, having previously been dropped from the rolls of GSIS
employees.36 While the dropping from the rolls is alleged to have been the subject of a CA-issued
temporary restraining order (TRO), the injunction came after Atty. Velasco had in fact been
separated from the service and it appears that the TRO had already expired.
As a final consideration, the Court notes or reiterates the following relevant incidents surrounding the
disposition of the case below:
1. The CA had invoked as part of its ratio decidendi a dissenting opinion in MPSTA, even
going to the extent of describing as "instructive and timely" a portion, when the majority
opinion thereat, which the appellate court ignored, is the controlling jurisprudence.
2. The CA gave prominence to dispositions and rattled off holdings37 of the Court, which
appropriately apply only to strikes in the private industry labor sector, and utilized the same
as springboard to justify an inference of grave abuse of discretion. On the other hand, it only
gave perfunctory treatment if not totally ignored jurisprudence that squarely dealt with strikes
in the public sector, as if the right to strike given to unions in private corporations/entities is
necessarily applicable to civil service employees.
3. As couched, the assailed CA decision perpetually bars respondent Garcia – and

necessarily whoever succeeds him as GSIS President – not only from implementing the
formal charges against GSIS employees who participated in the October 4 - 7, 2004 mass
action but also from issuing other formal charges arising from the same events. The
injunction was predicated on a finding that grave abuse of discretion attended the exercise of
petitioner Garcia's disciplinary power vested him under Section 45 of RA 8291.38 At bottom
then, the assailed decision struck down as a nullity, owing to the alleged attendant
arbitrariness, not only acts that have already been done, but those yet to be done. In net
effect, any formal charge arising from the October 4-7, 2004 incident is, under any and all
circumstances, prejudged as necessarily tainted with arbitrariness to be slain at sight.
The absurdities and ironies easily deducible from the foregoing situations are not lost on the Court.
We close with the observation that the assailed decision and resolution, if allowed to remain
undisturbed, would likely pave the way to the legitimization of mass actions undertaken by civil
servants, regardless of their deleterious effects on the interest of the public they have sworn to serve
with loyalty and efficiency. Worse still, it would permit the emergence of a system where public
sector workers are, as the petitioners aptly put it, "immune from the minimum reckoning for acts that
[under settled jurisprudence] are concededly unlawful." This aberration would be intolerable.
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals

are REVERSED and SET ASIDE and the writ of prohibition issued by that court is NULLIFIED.
No Cost.
SO ORDERED.
Puno, J., Chairperson, Sandoval-Gutierrez, and Azcuna, JJ., concur.

Corona, J., On Leave.
Footnotes
1
Penned by Associate Justice Rebecca DeGuia-Salvador, concurred in by Associate
Justices Amelita G. Tolentino and Aurora Santiago-Lagman, Rollo, pp. 78-98.
2
Id. at 101-105.
3
CA Decision, p. 2; Id. at 79.
4
Id. at 80.
5
Id. at 79-81.
Garcia's Motion for Reconsideration of the [CA's] Decision dated June 22, 2005, pp. 8-9;
6
Annex "G," Petition, Id. at 44-45.
7
Supra note 1.
8
Supra note 2.
9
GSIS exists pursuant to PD 1146, as amended by RA No. 8291, or the Government Service
Insurance System Act of 1997.
Constitution, Art. IX(B), Sec. 2(1); SSS Employees Association v. CA, G.R. No. 85279, July
10
28, 1989, 175 SCRA 686; Home Development Mutual Fund v. COA, G.R. No. 142297, June
15, 2004, 432 SCRA 127.
11
G.R. No. 124540, November 14, 1997, 281 SCRA 657.
12
Bangalisan v. Court of Appeals, G.R. No. 124678, July 31, 1997, 276 SCRA 619.
13
CA Resolution, p. 4; Rollo, p. 104.
14
CA Resolutions pp. 3-4; Rollo, 103-104.
15
G.R. Nos. 95445 & 95590, August 6, 1991, 200 SCRA 323.
16
CA Decision, p. 10; Rollo, p. 87.
17
Sec. 4. Limitation on the Right to Self-Organization. – The right to self-organization
accorded to government employees as described in the foregoing section shall not carry with
it the right to engage in any form of prohibited concerted activity or mass action causing or
intending to cause work stoppage or service disruption, albeit of temporary nature.
Sec. 5. Definition of Prohibited Concerted Mass Action. – As used in this Omnibus rules, the
phrase "prohibited concerted activity" shall be understood to refer to any collective activity
undertaken by government employees, by themselves or through their employees'
organizations, with the intent of effecting work stoppage or service disruption in order to
realize their demands or force concessions, economic or otherwise, from their respective
agencies or the government. It shall include mass leaves, walkouts, pickets and acts of
similar nature.
18
No. L-60403, August 3, 1983, 124 SCRA 1.
19
Art. IX(B), Sec. 2 (5).
20
Art. XIII, Sec. 2.
21
G.R. No. 124678, July 31, 1997, 276 SCRA 619.
22
Supra note 15.
23
Supra note 11.
Bernas, THE CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES A

25
COMMENTARY, 337 (1st ed, 1988).
26
CSC Res. No. 021316, Sec. 5; Supra note 17. .
27
Annex "C" and Annex "I," Petition, Rollo, p. 107 and 173, respectively.
28
Id. at 267.
29
Rep. Act No. 6713.
30
Jacinto v. CA, supra note 22..
31
CSC Resolution No. 021316, Sec. 5.
SEC. 45. Powers and Duties of the President and General Manager.- xxx The President
32
and General Manager [of the GSIS], subject to the approval of the Board, shall appoint the
personnel of the GSIS, remove, suspend or otherwise discipline them for cause, in
accordance with existing Civil Service rules and regulations ….
33
KMG's basic petition for prohibition, p. 13; Rollo, p. 121 et seq.
34
CA Decision, pp. 17-18; Id. at 94-95.
35
Petition, p. 41; Id. at 43.
36
Annex "D," Petition; Id. at 108.
37
Allied Banking Corporation v. NLRC, G.R. No. 116128, July 12, 1996, 258 SCRA 724;
Lapanday Workers Union v. NLRC, G.R. Nos. 95494-97, September 7, 1995, 248 SCRA 95;
International Container Terminal Services, Inc. v. NLRC, G.R. No. 98295, April 10, 1996, 256
SCRA 134.
38
Supra note 32.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 196276 June 4, 2014
TAKATA (PHILIPPINES) CORPORATION, Petitioner,

vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation
assailing the Decision dated December 22, 2010 and the Resolution dated March 28, 2011 of the
1 2
Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional
Office a Petition for Cancellation of the Certificate of Union Registration of Respondent Samahang
3
Lakas Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty of
misrepresentation, false statement and fraud with respect to the number of those who participated in
the organizational meeting, the adoption and ratification of its Constitution and By-Laws, and in the
election of its officers. It contended that in the May 1, 2009 organizational meeting of respondent,
only 68 attendees signed the attendance sheet, and which number comprised only 17% of the total
number of the 396 regular rank- and-file employees which respondent sought to represent, and
hence, respondent failed to comply with the 20% minimum membership requirement. Petitioner
insisted that the document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged
119 union members; and that employees were not given sufficient information on the documents
they signed; that the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the time
of the filing of respondent's application for union registration; that the 119 union members were
actually only 117; and, that the total number of petitioner's employees as of May 1, 2009 was 470,
and not 396 as respondent claimed. 4
Respondent denied the charge and claimed that the 119 union members were more than the 20%
requirement for union registration. The document "Sama-Samang Pahayag ng Pagsapi sa Unyon"
which it presented in its petition for certification election supported their claim of 119 members.
5
Respondent also contended that petitioner was estopped from assailing its legal personality as it
agreed to a certification election and actively participated in the pre-election conference of the
certification election proceedings. Respondent argued that the union members were informed of the
6
contents of the documents they signed and that the 68 attendees to the organizational meeting
constituted more than 50% of the total union membership, hence, a quo rumexisted for the conduct
of the said meeting. 7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a
Decision granting the petition for cancellation of respondent's certificate of registration, the
8
dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the
respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009
is hereby REVOCKED (sic) and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule
XIV of Department Order No. 40-03 and the Samahang Lakas ng Manggagawa ng TAKATA
(SALAMAT) is hereby delisted from the roll of legitimate labor organization of this office. 9
In revoking respondent's certificate of registration, the Regional Director found that the 68
employees who attended the organizational meeting was obviously less than 20% of the total
number of 396 regular rank-and-file employees which respondent sought to represent, hence, short
of the union registration requirement; that the attendance sheet which contained the signatures and
names of the union members totalling to 68 contradicted the list of names stated in the document
denominated as "Pangalan ng mga Kasaping Unyon." The document "Sama-Samang Pahayag ng
Pagsapi" was not attached to the application for registration as it was only submitted in the petition
for certification election filed by respondent at a later date. The Regional Director also found that the
proceedings in the cancellation of registration and certification elections are two different and entirely
separate and independent proceedings which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer,

Domingo P. Mole, filed a Notice and Memorandum of Appeal with the Bureau of Labor Relations
10
(BLR). However, on September 28,2009, respondent, through its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal
Entry of Appearance to the Office of the DOLE Secretary, which the latter eventually referred to the
11
BLR. Petitioner filed an Opposition to the Appeals praying for their dismissal on the ground of forum
12
shopping as respondent filed two separate appeals in two separate venues; and for failing to avail of
the correct remedy within the period; and that the certificate of registration was tainted with fraud,
misrepresentation and falsification.
In its Answer, respondent claimed that there was no forum shopping as BMP's Paralegal Officer
13
was no longer authorized to file an appeal on behalf of respondent as the latter's link with BMP was
already terminated and only the Union President was authorized to file the appeal; and that it
complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of
Appearance and petitioner's Answer, the BLR rendered its Decision reversing the Order of the
14
Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S.
Martinez, Sr., dated 27 August 2009, is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of
labor organizations. 15
In reversing, the BLR found that petitioner failed to prove that respondent deliberately and
maliciously misrepresented the number of rank-and-file employees. It pointed out petitioner's basis
for the alleged noncompliance with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting supposedly comprising only
17% of the total 396 regular rank-and-file employees. However, the BLR found that the list of
employees who participated in the organizational meeting was a separate and distinct requirement
from the list of the names of members comprising at least 20% of the employees in the bargaining
unit; and that there was no requirement for signatures opposite the names of the union members;
and there was no evidence showing that the employees assailed their inclusion in the list of union
members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution dated
16
January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which denied the petition and
affirmed the decision of the BLR. Petitioner's motion for reconsideration was denied in a Resolution
dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN

AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON
FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS BEHALF. BOTH
OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC RESPONDENT
BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE
APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA
(SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE CIRCUMSTANCES
OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED
WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS
THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND
FALSE STATEMENTS AND FRAUD IN CONNECTION THEREWITH. 17
Anent the first issue, petitioner contends that respondent had filed two separate appeals with two
different representations at two different venues, in violation of the rule on multiplicity of suits and
forum shopping, and instead of dismissing both appeals, the appeal erroneously filed before the
Labor Secretary was the one held validly filed, entertained and even granted; that it is not within the
discretion of BLR to choose which between the two appeals should be entertained, as it is the fact of
the filing of the two appeals that is being prohibited and not who among the representatives therein
possessed the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent committed no forum shopping. As
the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an
appeal on behalf of union SALAMAT and that BMP was duly informed that its services was already
terminated. SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-2009" terminating the
services of BMP and revoking the representation of Mr. Domingo Mole in any of the pending cases
being handled by him on behalf of the union. So, considering that BMP Paralegal Officer Domingo P.
Mole was no longer authorized to file an appeal when it filed the Notice and Memorandum of Appeal
to DOLE Regional Office No. IV-A, the same can no longer be treated as an appeal filed by union
SALAMAT. Hence, there is no forum shopping to speak of in this case as only the Appeal
Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty.
Jehn Louie W. Velandrez is sanctioned by SALAMAT. 18
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is
considered to have not been filed at all. It has been held that "if a complaint is filed for and in behalf
of the plaintiff who is not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect." 19
Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of
Appearance before the Labor Secretary, and not with the BLR. As the appeal emanated from the
petition for cancellation of certificate of registration filed with the Regional Office, the decision
canceling the registration is appealable to the BLR, and not with the Labor Secretary. However,
since the Labor Secretary motu propio referred the appeal with the BLR, the latter can now act on it.
Considering that Mole's appeal with the BLR was not deemed filed, respondent’s appeal, through
Banzuela and Associates, which the Labor Secretary referred to the BLR was the only existing
appeal with the BLR for resolution. There is, therefore, no merit to petitioner's claim that BLR chose
the appeal of Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union cited by
20
petitioner is not at all applicable in this case as the issue therein is the authority of the Labor
Secretary to review the decision of the Bureau of Labor Relations rendered in the exercise of its
appellate jurisdiction over decision of the Regional Director in cases involving cancellations of
certificate of registration of labor unions. We found no grave abuse of discretion committed by the
Secretary of Labor in not acting on therein petitioner's appeal. The decision of the Bureau of Labor
Relations on cases brought before it on appeal from the Regional Director are final and executory.
Hence, the remedy of the aggrieved party is to seasonably avail of the special civil action of certiorari
under Rule 65 and the Rules of Court. In this case, after the Labor Secretary motu propio referred
respondent's appeal filed with it to the BLR which rendered its decision reversing the Regional
Director, petitioner went directly to the CA via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds
offraud and misrepresentation bearing on the minimum requirement of the law as to its membership,
considering the big disparity in numbers, between the organizational meeting and the list of
members, and so misleading the BLR that it obtained the minimum required number of employees
for purposes of organization and registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or industry or trade union
center or an independent union shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (₱50.00)registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization,
the minutes of the organizational meetings and the list of the workers who participated in
such meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption
or ratification, and the list of the members who participated in it."
And after the issuance of the certificate of registration, the labor organization's registration could be
assailed directly through cancellation of registration proceedings in accordance with Articles 238 and
239 of the Labor Code. And the cancellation of union certificate of registration and the grounds
thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor
organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on
the grounds specified in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds
for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification
of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list
of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate
of registration is a serious charge and must be carefully evaluated. Allegations thereof should be
compounded with supporting circumstances and evidence. We find no evidence on record to
21
support petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent claimed that
it has 119 members as shown in the document denominated as "Pangalan ng mga Kasapi ng
Unyon;" hence, respondent misrepresented on the 20% requirement of the law as to its membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational
meeting must comprise 20% of the employees in the bargaining unit. In fact, even the Implementing
Rules and Regulations of the Labor Code does not so provide. It is only under Article 234 (c) that
requires the names of all its members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to
the employees’ membership in the union and not to the list of workers who participated in the
organizational meeting. Indeed, Article 234 (b) and (c) provide for separate requirements, which
must be submitted for the union's registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20% of which was about 79. Respondent
submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119
employees as union members, thus respondent sufficiently complied even beyond the 20%
minimum membership requirement. Respondent also submitted the attendance sheet of the
organizational meeting which contained the names and signatures of the 68 union members who
attended the meeting. Considering that there are 119 union members which are more than 20% of
all the employees of the bargaining unit, and since the law does not provide for the required number
of members to attend the organizational meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a quorum for the meeting to proceed
and to validly ratify the Constitution and By-laws of the union. There is, therefore, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's union registration. For
fraud and misrepresentation to be grounds for cancellation of union registration under Article 239 of
the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members. 22
Petitioner's claim that the alleged union members signed documents without adequate information is
not persuasive. The one who alleges a fact has the burden of proving it and a mere allegation is not
evidence. In fact, we note that not one of those listed in the document denominated as "Pangalan
23
ng Mga Kasaping Unyon" had come forward to deny their membership with respondent. Notably, it
had not been rebutted that the same union members had signed the document entitled "Sama-
Samang Pahayag ng Pagsapi," thus, strengtheningtheir desire to be members of the respondent
union.
Petitioner claims that in the list of members, there was an employee whose name appeared twice
and another employee who was merely a project employee. Such could not be considered a
misrepresentation in the absence of showing that respondent deliberately did so for the purpose of
increasing their union membership. In fact, even if those two names were not included in the list of
union members, there would still be 117 members which was still more than 20% of the 396 rank-
and-file employees.
As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and
not396 as respondent claimed, still the 117 union members comprised more than the 20%
membership requirement for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment, we said: 24
For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification; or, in connection with
the election of officers, the minutes of the election of officers, the list of voters, or failure to submit
these documents together with the list of the newly elected-appointed officers and their postal
addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a union’s registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds
for cancellation of union registration under the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members. 1âwphi1
In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with
mathematical precision the total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while respondent declared that it should only
be 455, it still cannot be denied that the latter would have more than complied with the registration
requirement. 25
WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
December 22, 2010 and the Resolution dated March 28, 2011 of the Court of Appeals, in CA-G.R.
SP No. 112406, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson
MARTIN S. VILLARAMA, JR.* JOSE CATRAL MENDOZA
MARVIC MARIO VICTOR F. LEONEN

Associate Justice
ATTESTATION
PRESBITER J. VELASCO, JR.

Associate Justice
Chairperson, Third Division
CERTIFICATION

Chief Justice
Footnotes
* Designated Acting Member, per Special Order No. 1691, dated May 22, 2014.
Penned by Associate Justice Fiorito S. Macalino, with Associate. Justices Juan Q.

1
Enriquez, Jr. and Ramon M. Bato, Jr., concurring; rollo, pp. 328-336.
2
Id. at 375-376.
3
Id. at 48-67.
4
Annex "D," Reply to Comment, id. at 73-83.
5
Docketed as RO400-A- 0905- LAG -RU -004
6
Rollo, pp. 68-72.
7
Id. at 84-89.
8
Id. at 90-98; Docketed asRO400-A-0904-RFO-AU-001.
9
Id. at 98.
Id. at 99-107.
10
Id. at 108-119.
11
Id. at 120-186.
12
Id. at 187-189.
13
Id. at 191-196; Per Director IV Rebecca C. Chato; Docketed as BLR-A-C-43-10-1-09.

14
Id. at 196. (Emphasis in the original)

15
Id. at 233-234.
16
Id. at 17-18.
17
Id. at 333.
18
Tamondong v. Court of Appeals, 486 Phil. 729, 741 (2004).

19
380 Phil. 364 (2000).

20
San Miguel Corporation Employees Union-Phil. Transport and General Workers Org. v.
21
San Miguel Packaging Products Employees Union-Pambansang Diwang Manggagawang

Pilipino,559 Phil. 549, 566-567 (2007).
Mariwasa Siam Ceramics, Inc. v. Secretary of the Department of Labor and Employment,
22
G.R. No. 183317, December 21, 2009, 608 SCRA 706, 716 (2009).
P.T. Cerna Corporation v. Court of Appeals, G..R. No. 91622, April 6, 1993, 221 SCRA 19,
23
25.
Supra note 22.

24
Id. at 715-716.
25
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 183317 December 21, 2009
MARIWASA SIAM CERAMICS, INC., Petitioner,

vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, CHIEF OF THE
BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL
DIRECTOR OF DOLE REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGA
MANGGAGAWA SA MARIWASA SIAM CERAMICS, INC. (SMMSC-
INDEPENDENT), Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, seeking to annul the
Decision2 dated December 20, 2007 and the Resolution3 dated June 6, 2008 of the Court of Appeals
in CA-G.R. SP No. 98332.
The antecedent facts are as follows—
On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) was issued a Certificate of Registration4 as a legitimate labor organization by
the Department of Labor and Employment (DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union
Registration against respondent, claiming that the latter violated Article 2345 of the Labor Code for
not complying with the 20% requirement, and that it committed massive fraud and misrepresentation
in violation of Article 2396 of the same code. The case was docketed as Case No. RO400-0506-AU-
004.
On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition,
revoking the registration of respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).
In a Decision7 dated June 14, 2006, the BLR granted respondent’s appeal and disposed as follows—
WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa Mariwasa Siam

Ceramics, Inc. (SMMSC-Independent) is hereby GRANTED, and the Decision dated 26 August 2005
by DOLE-Region-IV-A Director Maximo B. Lim is hereby REVERSED and SET ASIDE. Samahan ng
Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent), under Registration
Certificate No. RO400-200505-UR-002, remains in the roster of legitimate labor organizations.
SO DECIDED.8
Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution9 dated February 2,
2007.
Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the
CA denied the petition for lack of merit.
Petitioner’s motion for reconsideration of the CA Decision was likewise denied, hence, this petition
based on the following grounds—
Review of the Factual Findings of the Bureau of Labor Relations, adopted and confirmed by the
Honorable Court of Appeals is warranted[;]
The Honorable Court of Appeals seriously erred in ruling that the affidavits of recantation cannot be
given credence[;]
The Honorable Court of Appeals seriously erred in ruling that private respondent union complied with
the 20% membership requirement[; and]
The Honorable Court of Appeals seriously erred when it ruled that private respondent union did not
commit misrepresentation, fraud or false statement.10
The petition should be denied.
The petitioner insists that respondent failed to comply with the 20% union membership requirement
for its registration as a legitimate labor organization because of the disaffiliation from the total
number of union members of 102 employees who executed affidavits recanting their union
membership.
It is, thus, imperative that we peruse the affidavits appearing to have been executed by these
affiants.
The affidavits uniformly state—
Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang Rank & File sa
Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas, matapos na makapanumpa
ng naaayon sa batas ay malaya at kusang loob na nagsasaad ng mga sumusunod:
1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa

Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pag-
aalinlangan[;]
2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa

ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan na
hindi angkop sa aking pananaw ang mga mungkahi o adhikain ng samahan.
SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____ ng ______,
2005 dito sa Lalawigan ng Batangas, Bayan ng Sto. Tomas.
____________________
Nagsasalaysay
Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits were
ready to be filled out with the employees’ names and signatures.
The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the affiant
was forced and deceived into joining the respondent union. It is worthy to note, however, that the
affidavit does not mention the identity of the people who allegedly forced and deceived the affiant
into joining the union, much less the circumstances that constituted such force and deceit. Indeed,
not only was this allegation couched in very general terms and sweeping in nature, but more
importantly, it was not supported by any evidence whatsoever.
The second allegation ostensibly bares the affiant’s regret for joining respondent union and
expresses the desire to abandon or renege from whatever agreement he may have signed regarding
his membership with respondent.
Simply put, through these affidavits, it is made to appear that the affiants recanted their support of
respondent’s application for registration.
In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette
Factory v. Director of the Bureau of Labor Relations11 is enlightening, viz.—
On the second issue—whether or not the withdrawal of 31 union members from NATU affected the
petition for certification election insofar as the 30% requirement is concerned, We reserve the Order
of the respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31
union members had withdrawn their support to the petition before the filing of said petition. It would
be otherwise if the withdrawal was made after the filing of the petition for it would then be presumed
that the withdrawal was not free and voluntary. The presumption would arise that the withdrawal was
procured through duress, coercion or for valuable consideration. In other words, the distinction must
be that withdrawals made before the filing of the petition are presumed voluntary unless there is
convincing proof to the contrary, whereas withdrawals made after the filing of the petition are
deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made before the filing of the
petition, the names of employees supporting the petition are supposed to be held secret to the
opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence of
proof to the contrary. Moreover, it becomes apparent that such employees had not given consent to
the filing of the petition, hence the subscription requirement has not been met.
When the withdrawal or retraction is made after the petition is filed, the employees who are
supporting the petition become known to the opposite party since their names are attached to the
petition at the time of filing. Therefore, it would not be unexpected that the opposite party would use
foul means for the subject employees to withdraw their support.12
In the instant case, the affidavits of recantation were executed after the identities of the union
members became public, i.e., after the union filed a petition for certification election on May 23,
2005, since the names of the members were attached to the petition. The purported withdrawal of
support for the registration of the union was made after the documents were submitted to the DOLE,
Region IV-A. The logical conclusion, therefore, following jurisprudence, is that the employees were
not totally free from the employer’s pressure, and so the voluntariness of the employees’ execution
of the affidavits becomes suspect.
It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were
executed by the individual affiants on different dates from May 26, 2005 until June 3, 2005, but they
were all sworn before a notary public on June 8, 2005.
There was also a second set of standardized affidavits executed on different dates from May 26,
2005 until July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these were
notarized on June 8, 2005, the very same date when the first set of 25 was notarized.
Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it is
surprising why petitioner was able to submit the second set of affidavits only on July 12, 2005.
Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious
circumstances, and which contain allegations unsupported by evidence. At best, these affidavits are
self-serving. They possess no probative value.
A retraction does not necessarily negate an earlier declaration. For this reason, retractions are
looked upon with disfavor and do not automatically exclude the original statement or declaration
based solely on the recantation. It is imperative that a determination be first made as to which
between the original and the new statements should be given weight or accorded belief, applying the
general rules on evidence. In this case, inasmuch as they remain bare allegations, the purported
recantations should not be upheld.13
Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of
respondent as a labor organization must be affirmed. While it is true that the withdrawal of support
may be considered as a resignation from the union, the fact remains that at the time of the union’s
application for registration, the affiants were members of respondent and they comprised more than
the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor
Code merely requires a 20% minimum membership during the application for union registration. It
does not mandate that a union must maintain the 20% minimum membership requirement all
throughout its existence.14 1avvphi1
Respondent asserts that it had a total of 173 union members at the time it applied for registration.
Two names were repeated in respondent’s list and had to be deducted, but the total would still be
171 union members. Further, out of the four names alleged to be no longer connected with
petitioner, only two names should be deleted from the list since Diana Motilla and T.W. Amutan
resigned from petitioner only on May 10, 2005 and May 17, 2005, respectively, or after respondent’s
registration had already been granted. Thus, the total union membership at the time of registration
was 169. Since the total number of rank-and-file employees at that time was 528, 169 employees
would be equivalent to 32% of the total rank-and-file workers complement, still very much above the
minimum required by law.
For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with
the election of officers, the minutes of the election of officers, the list of voters, or failure to submit
these documents together with the list of the newly elected-appointed officers and their postal
addresses to the BLR.15
The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a union’s registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds
for cancellation of union registration under the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union
members.
In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with
mathematical precision the total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while respondent declared that it should only
be 455, it still cannot be denied that the latter would have more than complied with the registration
requirement.
WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the June 6,
2008 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA

Associate Justice
WE CONCUR:
RENATO C. CORONA
Associate Justice
Chairperson
PRESBITERO J. VELASCO, JR. DIOSDADO M. PERALTA

MARIANO C. DEL CASTILLO*

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
Footnotes
* Additional member per Special Order No. 805 dated December 4, 2009.
1
Rollo, pp. 14-34.
Penned by Associate Justice Celia C. Librea-Leagogo, with Associate Justices Regalado E.

2
Maambong and Sixto C. Marella, Jr., concurring; id. at 354-374.

3
Id. at 388-389.
4
Rollo, p. 110.
5
ART. 234. REQUIREMENTS OF REGISTRATION
Any applicant labor organization, association or group of unions or workers shall

acquire legal personality and shall be entitled to the rights and privileges granted by
law to legitimate labor organizations upon issuance of the certificate of registration
based on the following requirements:
xxxx
(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate. (Emphasis supplied.)
6
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION
The following shall constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;
xxxx
(c) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly-elected/appointed officers and their
postal addresses within thirty (30) days from election. (Emphasis supplied.)
7
Rollo, pp. 70-77.
8
Id. at 77.
9
Id. at 67-68.
10
Id. at 22, 26, 29, and 31.
11
G.R. No. L-55674, July 25, 1983, 123 SCRA 679.
12
Id. at 707-708.
Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No. 159701, August
13
17, 2007, 530 SCRA 550.
14
However, this does not prevent another union within the same company from challenging
the status of the union as the legitimate labor organization authorized to represent the
interests of the employees with the management.
Air Philippines Corporation v. Bureau of Labor Relations, G.R. No. 155395, June 22, 2006,
15
492 SCRA 243.
SUPREME COURT
Manila
EN BANC
G.R. No. 122226 March 25, 1998
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES,
INC. respondents.
MENDOZA, J.:
Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union filed a
petition for certification election on behalf of the route managers at Pepsi-Cola Products Philippines,
Inc. However, its petition was denied by the med-arbiter and, on appeal, by the Secretary of Labor
and Employment, on the ground that the route managers are managerial employees and, therefore,
ineligible for union membership under the first sentence of Art. 245 of the Labor Code, which
provides:
Ineligibility of managerial employees to join any labor organization; right of supervisory

employees. — Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
Petitioner brought this suit challenging the validity of the order dated August 31, 1995, as reiterated
in the order dated September 22, 1995, of the Secretary of Labor and Employment. Its petition was
dismissed by the Third Division for lack of showing that respondent committed grave abuse of
discretion. But petitioner filed a motion for reconsideration, pressing for resolution its contention that
the first sentence of Art. 245 of the Labor Code, so far as it declares managerial employees to be
ineligible to form, assist or join unions, contravenes Art. III, §8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
For this reason, the petition was referred to the Court en banc.
The Issues in this Case

Two questions are presented by the petition: (1) whether the route managers at Pepsi-Cola Products
Philippines, Inc. are managerial employees and (2) whether Art. 245, insofar as it prohibits
managerial employees from forming, joining or assisting labor unions, violates Art. III, §8 of the
Constitution.
In resolving these issues it would be useful to begin by defining who are "managerial employees"
and considering the types of "managerial employees."
Types of Managerial Employees
The term "manager" generally refers to "anyone who is responsible for subordinates and other
organizational resources." As a class, managers constitute three levels of a pyramid:
1
Top management
————————
Middle
Management
——————————
First-Line
Management
(also called
Supervisor)
====================
Operatives
or
Operating
Employees
FIRST-LINE MANAGERS — The lowest level in an organization at which individuals

are responsible for the work of others is called first-line or first-level management.
First-line managers direct operating employees only; they do not supervise other
managers. Examples of first-line managers are the "foreman" or production
supervisor in a manufacturing plant, the technical supervisor in a research
department, and the clerical supervisor in a large office. First-level managers are
often called supervisors.
MIDDLE MANAGERS — The term middle management can refer to more than one level
in an organization. Middle managers direct the activities of other managers and
sometimes also those of operating employees. Middle managers' principal
responsibilities are to direct the activities that implement their organizations' policies
and to balance the demands of their superiors with the capacities of their
subordinates. A plant manager in an electronics firm is an example of a middle
manager.
TOP MANAGERS — Composed of a comparatively small group of executives, top

management is responsible for the overall management of the organization. It
establishes operating policies and guides the organization's interactions with its
environment. Typical titles of top managers are "chief executive
officer," "president," and "senior vice-president." Actual titles vary from one
organization to another and are not always a reliable guide to membership in the
highest management classification. 2
As can be seen from this description, a distinction exists between those who have the
authority to devise, implement and control strategic and operational policies (top and middle
managers) and those whose task is simply to ensure that such policies are carried out by the
rank-and-file employees of an organization (first-level managers/supervisors). What
distinguishes them from the rank-and-file employees is that they act in the interest of the
employer in supervising such rank-and-file employees.
"Managerial employees" may therefore be said to fall into two distinct categories: the
"managers" per se, who compose the former group described above, and the "supervisors"
who form the latter group. Whether they belong to the first or the second category,
managers, vis-a-vis employers, are, likewise, employees. 3
The first question is whether route managers are managerial employees or supervisors.
Previous Administrative Determinations of

the Question Whether Route Managers
are Managerial Employees
It appears that this question was the subject of two previous determinations by the Secretary
of Labor and Employment, in accordance with which this case was decided by the med-
arbiter.
In Case No. OS-MA-10-318-91, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola

Products Philippines, Inc., decided on November 13, 1991, the Secretary of Labor found:
We examined carefully the pertinent job descriptions of the subject employees and
other documentary evidence on record vis-a-vis paragraph (m), Article 212 of the
Labor Code, as amended, and we find that only those employees occupying the
position of route manager and accounting manager are managerial employees. The
rest i.e. quality control manager, yard/transport manager and warehouse operations
manager are supervisory employees.
To qualify as managerial employee, there must be a clear showing of the exercise of

managerial attributes under paragraph (m), Article 212 of the Labor Code as amended.
Designations or titles of positions are not controlling. In the instant case, nothing on
record will support the claim that the quality control manager, yard/transport manager
and warehouse operations manager are vested with said attributes. The warehouse
operations manager, for example, merely assists the plant finance manager in
planning, organizing, directing and controlling all activities relative to development
and implementation of an effective management control information system at the
sale offices. The exercise of authority of the quality control manager, on the other
hand, needs the concurrence of the manufacturing manager.
As to the route managers and accounting manager, we are convinced that they are
managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92. entitled In Re: Petition
for Direct Certification and/or Certification Election-Route Managers/Supervisory Employees
of Pepsi-Cola Products Phils. Inc., as follows:
The issue brought before us is not of first impression. At one time, we had the
occasion to rule upon the status of route manager in the same company vis a vis the
issue as to whether or not it is supervisory employee or a managerial employee. In the
case of Workers Alliance Trade Unions (WATU) vs. Pepsi Cola Products, Phils., Inc.
(OS-MA-A-10-318-91 ), 15 November 1991, we ruled that a route manager is a
managerial employee within the context of the definition of the law, and hence,
ineligible to join, form or assist a union. We have once more passed upon the logic of
our Decision aforecited in the light of the issues raised in the instant appeal, as well
as the available documentary evidence on hand, and have come to the view that there
is no cogent reason to depart from our earlier holding. Route Managers are, by the
very nature of their functions and the authority they wield over their subordinates,
managerial employees. The prescription found in Art. 245 of the Labor Code, as
amended therefore, clearly applies to them. 4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations Commission, however,
5
petitioner argues that these previous administrative determinations do not have the effect
of res judicata in this case, because "labor relations proceedings" are "non-litigious and
summary in nature without regard to legal technicalities." Nasipit Lumber Co. involved a
6
clearance to dismiss an employee issued by the Department of Labor. The question was
whether in a subsequent proceeding for illegal dismissal, the clearance was res judicata. In
holding it was not, this Court made it clear that it was referring to labor relations proceedings
of a non-adversary character, thus:
The requirement of a clearance to terminate employment was a creation of the

Department of labor to carry out the Labor Code provisions on security of tenure and
termination of employment. The proceeding subsequent to the filing of an application
for clearance to terminate employment was outlined in Book V, Rule XIV of the Rules
and Regulations Implementing the Labor Code. The fact that said rule allowed a
procedure for the approval of the clearance with or without the opposition of the
employee concerned (Secs. 7 & 8), demonstrates the non-litigious and summary
nature of the proceeding. The clearance requirement was therefore necessary only as
an expeditious shield against arbitrary dismissal without the knowledge and
supervision of the Department of Labor. Hence, a duly approved clearance implied
that the dismissal was legal or for cause (Sec. 2).7
But the doctrine of res judicata certainly applies to adversary administrative proceedings. As

early as 1956, in Brillantes v. Castro, we sustained the dismissal of an action by a trial court
8
on the basis of a prior administrative determination of the same case by the Wage
Administration Service, applying the principle of res judicata. Recently, in Abad v. NLRC we
9
applied the related doctrine of stare decisis in holding that the prior determination that
certain jobs at the Atlantic Gulf and Pacific Co., were project employments was binding in
another case involving another group of employees of the same company. Indeed, in Nasipit
Lumber Co., this Court clarified toward the end of its opinion that "the doctrine of res
judicata applies . . . to judicial or quasi judicial proceedings and not to the exercise of
administrative powers." Now proceedings for certification election, such as those involved
10
in Case No. OS-M-A-10-318-91 and Case No. OS-A-3-71-92, are quasi judicial in nature and,
therefore, decisions rendered in such proceedings can attain finality. 11
Thus, we have in this case an expert's view that the employees concerned are managerial
employees within the purview of Art. 212 which provides:
(m) "managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
At the very least, the principle of finality of administrative determination compels respect for
the finding of the Secretary of Labor that route managers are managerial employees as
defined by law in the absence of anything to show that such determination is without
substantial evidence to support it. Nonetheless, the Court, concerned that employees who
are otherwise supervisors may wittingly or unwittingly be classified as managerial personnel
and thus denied the right of self-organization, has decided to review the record of this case.
DOLE's Finding that Route Managers are

Managerial Employees Supported by
Substantial Evidence in the Record
The Court now finds that the job evaluation made by the Secretary of Labor is indeed
supported by substantial evidence. The nature of the job of route managers is given in a four-
page pamphlet, prepared by the company, called "Route Manager Position Description," the
pertinent parts of which read:
A. BASIC PURPOSE
A Manager achieves objectives through others.
As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful MANAGEMENT OF YOUR
JOB AND THE MANAGEMENT OF YOUR PEOPLE.
These then are your functions as Pepsi-Cola Route Manager. Within

these functions — managing your job and managing your people — you
are accountable to your District Manager for the execution and
completion of various tasks and activities which will make it possible
for you to achieve your sales objectives.
B. PRINCIPAL ACCOUNTABILITIES
1.0 MANAGING YOUR JOB
The Route Manager is accountable for the following:
1.1 SALES DEVELOPMENT
1.1.1 Achieve the sales plan.
1.1.2 Achieve all distribution and new

account objectives.
1.1.3 Develop new business opportunities

thru personal contacts with dealers.
1.1.4 Inspect and ensure that all

merchandizing [sic] objectives are
achieved in all outlets.
1.1.5 maintain and improve productivity of

all cooling equipment and kiosks.
1.1.6 Execute and control all authorized

promotions.
1.1.7 Develop and maintain dealer

goodwill.
1.1.8 Ensure all accounts comply with

company suggested retail pricing.
1.1.9 Study from time to time individual

route coverage and productivity for
possible adjustments to maximize
utilization of resources.
1.2 Administration
1.2.1 Ensure the proper loading of route

trucks before check-out and the proper
sorting of bottles before check-in.
1.2.2 Ensure the upkeep of all route sales

reports and all other related reports and
forms required on an accurate and timely
basis.
1.2.3 Ensure proper implementation of the

various company policies and procedures
incl. but not limited to shakedown; route
shortage; progressive discipline; sorting;
spoilages; credit/collection; accident;
attendance.
1.2.4 Ensure collection of receivables and

delinquent accounts.
2.0 MANAGING YOUR PEOPLE
2.1 Route Sales Team Development
2.1.2 Conduct route rides to train, evaluate

and develop all assigned route salesmen
and helpers at least 3 days a week, to be
supported by required route ride
documents/reports & back check/spot
check at least 2 days a week to be
supported by required documents/reports.
2.1.2 Conduct sales meetings and morning

huddles. Training should focus on the
enhancement of effective sales and
merchandizing [sic] techniques of the
salesmen and helpers. Conduct group
training at least 1 hour each week on a
designated day and of specific topic.
2.2 Code of Conduct
2.2.1 Maintain the company's reputation

through strict adherence to PCPPI's code
of conduct and the universal standards of
unquestioned business
ethics.
12
Earlier in this opinion, reference was made to the distinction between managers per se (top
managers and middle managers) and supervisors (first-line managers). That distinction is
evident in the work of the route managers which sets them apart from supervisors in general.
Unlike supervisors who basically merely direct operating employees in line with set tasks
assigned to them, route managers are responsible for the success of the company's main
line of business through management of their respective sales teams. Such management
necessarily involves the planning, direction, operation and evaluation of their individual
teams and areas which the work of supervisors does not entail.
The route managers cannot thus possibly be classified as mere supervisors because their
work does not only involve, but goes far beyond, the simple direction or supervision of
operating employees to accomplish objectives set by those above them. They are not mere
functionaries with simple oversight functions but business administrators in their own right.
An idea of the role of route managers as managers per se can be gotten from a memo sent by
the director of metro sales operations of respondent company to one of the route managers.
It reads:
13
03 April 1995
To : CESAR T . REOLADA
From : REGGIE M. SANTOS
Subj : SALARY INCREASE
Effective 01 April 1995, your basic monthly salary of P11,710 will be increased
to P12,881 or an increase of 10%. This represents the added managerial
responsibilities you will assume due to the recent restructuring and streamlining of
Metro Sales Operations brought about by the continuous losses for the last nine (9)
months.
Let me remind you that for our operations to be profitable, we have to sustain the
intensity and momentum that your group and yourself have shown last March. You
just have to deliver the desired volume targets, better negotiated concessions,
rationalized sustaining deals, eliminate or reduced overdues, improved collections,
more cash accounts, controlled operating expenses, etc. Also, based on the agreed
set targets, your monthly performance will be closely monitored.
You have proven in the past that your capable of achieving your targets thru better
planning, managing your group as a fighting team, and thru aggressive selling. I am
looking forward to your success and I expect that you just have to exert your doubly
best in turning around our operations from a losing to a profitable one!
Happy Selling!!
(
S
g
d
.
)

R
.
M
.

S
A
N
T
O
S
The plasticized card given to route managers, quoted in the separate opinion of Justice
Vitug, although entitled "RM's Job Description," is only a summary of performance
standards. It does not show whether route managers are managers per se or supervisors.
Obviously, these performance standards have to be related to the specific tasks given to
route managers in the four-page "Route Manager Position Description," and, when this is
done, the managerial nature of their jobs is fully revealed. Indeed, if any, the card indicates
the great latitude and discretion given to route managers — from servicing and enhancing
company goodwill to supervising and auditing accounts, from trade (new business)
development to the discipline, training and monitoring of performance of their respective
sales teams, and so forth, — if they are to fulfill the company's expectations in the "key result
areas."
Article 212(m) says that "supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment."
Thus, their only power is to recommend. Certainly, the route managers in this case more than
merely recommend effective management action. They perform operational, human resource,
financial and marketing functions for the company, all of which involve the laying down of
operating policies for themselves and their teams. For example, with respect to marketing,
route managers, in accordance with B.1.1.1 to B.1.1.9 of the Route Managers Job Description,
are charged, among other things, with expanding the dealership base of their respective
sales areas, maintaining the goodwill of current dealers, and distributing the company's
various promotional items as they see fit. It is difficult to see how supervisors can be given
such responsibility when this involves not just the routine supervision of operating
employees but the protection and expansion of the company's business vis-a-vis its
competitors.
While route managers do not appear to have the power to hire and fire people (the evidence
shows that they only "recommended" or "endorsed" the taking of disciplinary action against
certain employees), this is because this
is a function of the Human Resources or Personnel Department of the company. And 14
neither should it be presumed that just because they are given set benchmarks to observe,
they are ipso facto supervisors. Adequate control methods (as embodied in such concepts
as "Management by Objectives [MBO]" and "performance appraisals") which require a
delineation of the functions and responsibilities of managers by means of ready reference
cards as here, have long been recognized in management as effective tools for keeping
businesses competitive.
This brings us to the second question, whether the first sentence of Art. 245 of the Labor
Code, prohibiting managerial employees from forming, assisting or joining any labor
organization, is constitutional in light of Art. III, §8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be
abridged.
As already stated, whether they belong to the first category (managers per se) or the second
category (supervisors), managers are employees. Nonetheless, in the United States, as
Justice Puno's separate opinion notes, supervisors have no right to form unions. They are
excluded from the definition of the term "employee" in §2(3) of the Labor-Management
Relations Act of 1947. In the Philippines, the question whether managerial employees have
15
a right of self-organization has arisen with respect to first-level managers or supervisors, as
shown by a review of the course of labor legislation in this country.
Right of Self-Organization of Managerial

Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor relations was governed
by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined "supervisor" as follows:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of an employer, to
hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline
other employees, or responsibly to direct them, and to adjust their grievances, or
effectively to recommend such acts, if, in connection with the foregoing, the exercise
of such authority is not of a merely routinary or clerical nature but requires the use of
independent judgment. 16
The right of supervisors to form their own organizations was affirmed:
Sec. 3. Employees' Right to Self-Organization. — Employees shall have the right to

self-organization and to form, join or assist labor organizations of their own choosing
for the purpose of collective bargaining through representatives of their own
choosing and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid and protection. Individuals employed as supervisors
shall not be eligible for membership in a labor organization of employees under their
supervision but may form separate organizations of their own. 17
For its part, the Supreme Court upheld in several of its decisions the right of supervisors to
organize for purposes of labor relations. 18
Although it had a definition of the term "supervisor," the Industrial Peace Act did not define
the term "manager." But, using the commonly-understood concept of "manager," as above
stated, it is apparent that the law used the term "supervisors" to refer to the sub-group of
"managerial employees" known as front-line managers. The other sub-group of "managerial
employees," known as managers per se, was not covered.
However, in Caltex Filipino Managers and Supervisors Association v. Court of Industrial

Relations, the right of all managerial employees to self-organization was upheld as a
19
general proposition, thus:
It would be going too far to dismiss summarily the point raised by respondent
Company — that of the alleged identity of interest between the managerial staff and
the employing firm. That should ordinarily be the case, especially so where the
dispute is between management and the rank and file. It does not necessarily follow
though that what binds the managerial staff to the corporation forecloses the
possibility of conflict between them. There could be a real difference between what
the welfare of such group requires and the concessions the firm is willing to grant.
Their needs might not be attended to then in the absence of any organization of their
own. Nor is this to indulge in empty theorizing. The record of respondent Company,
even the very case cited by it, is proof enough of their uneasy and troubled
relationship. Certainly the impression is difficult to erase that an alien firm failed to
manifest sympathy for the claims of its Filipino executives. To predicate under such
circumstances that agreement inevitably marks their relationship, ignoring that
discord would not be unusual, is to fly in the face of reality.
. . . The basic question is whether the managerial personnel can organize. What
respondent Company failed to take into account is that the right to self-organization is
not merely a statutory creation. It is fortified by our Constitution. All are free to
exercise such right unless their purpose is contrary to law. Certainly it would be to
attach unorthodoxy to, not to say an emasculation of, the concept of law if managers
as such were precluded from organizing. Having done so and having been duly
registered, as did occur in this case, their union is entitled to all the rights under
Republic Act No. 875. Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can be only one
answer to the objection raised that no unfair labor practice could be committed by
respondent Company insofar as managerial personnel is concerned. It is, as is quite
obvious, in the negative. 20
Actually, the case involved front-line managers or supervisors only, as the plantilla of
employees, quoted in the main opinion, clearly indicates:
21
CAFIMSA members holding the following Supervisory Payroll Position Title are
Recognized by the Company
Payroll Position Title
Assistant to Mgr. — National Acct. Sales
Jr. Sales Engineer
Retail Development Asst.
Staff Asst. — 0 Marketing
Sales Supervisor
Supervisory Assistant
Jr. Supervisory Assistant
Credit Assistant
Lab. Supvr. — Pandacan
Jr. Sales Engineer B
Operations Assistant B
Field Engineer
Sr. Opers. Supvr. — MIA A/S
Purchasing Assistant
Jr. Construction Engineer
Sr. Sales Supervisor
Deport Supervisor A
Terminal Accountant B
Merchandiser
Dist. Sales Prom. Supvr.
Instr. — Merchandising
Asst. Dist. Accountant B
Sr. Opers. Supervisor
Jr. Sales Engineer A
Asst. Bulk Ter. Supt.
Sr. Opers. Supvr.
Credit Supervisor A
Asst. Stores Supvr. A
Ref. Supervisory Draftsman
Refinery Shift Supvr. B
Asst. Supvr. A — Operations (Refinery)
Refinery Shift Supvr. B
Asst. Lab. Supvr. A (Refinery)
St. Process Engineer B (Refinery)
Asst. Supvr. A — Maintenance (Refinery)
Asst. Supvr. B — Maintenance (Refinery)
Supervisory Accountant (Refinery)

Communications Supervisor (Refinery)
Finally, also deemed included are all other employees excluded from the rank and file
unions but not classified as managerial or otherwise excludable by law or applicable
judicial precedents.
Right of Self-Organization of Managerial

Employees under the Labor Code
Thus, the dictum in the Caltex case which allowed at least for the theoretical unionization of
top and middle managers by assimilating them with the supervisory group under the broad
phrase "managerial personnel," provided the lynchpin for later laws denying the right of self-
organization not only to top and middle management employees but to front line managers
or supervisors as well. Following the Caltex case, the Labor Code, promulgated in 1974
under martial law, dropped the distinction between the first and second sub-groups of
managerial employees. Instead of treating the terms "supervisor" and "manager" separately,
the law lumped them together and called them "managerial employees," as follows:
Art. 212. Definitions . . . .
(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered
rank and file employees for purposes of this Book. 22
The definition shows that it is actually a combination of the commonly understood

definitions of both groups of managerial employees, grammatically joined by the phrase
"and/or."
This general definition was perhaps legally necessary at that time for two reasons. First, the
1974 Code denied supervisors their right to self-organize as theretofore guaranteed to them
by the Industrial Peace Act. Second, it stood the dictum in the Caltex case on its head by
prohibiting all types of managers from forming unions. The explicit general prohibition was
contained in the then Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made apparent in the Omnibus
Rules Implementing the Labor Code which the Department of Labor promulgated on January
19, 1975. Book V, Rule II, §11 of the Rules provided:
Supervisory unions and unions of security guards to cease operation. — All existing
supervisory unions and unions of security guards shall, upon the effectivity of the
Code, cease to operate as such and their registration certificates shall be deemed
automatically canceled. However, existing collective agreements with such unions,
the life of which extends beyond the date of effectivity of the Code, shall be respected
until their expiry date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file labor organization,
and if none exists, to form or assist in the forming of such rank and file organization.
The determination of who are managerial employees and who are not shall be the
subject of negotiation between representatives of the supervisory union and the
employer. If no agreement is reached between the parties, either or both of them may
bring the issue to the nearest Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions" despite the demise
of the legal definition of "supervisor" apparently because these were the unions of front line
managers which were then allowed as a result of the statutory grant of the right of self-
organization under the Industrial Peace Act. Had the Department of Labor seen fit to similarly
ban unions of top and middle managers which may have been formed following the dictum in
Caltex, it obviously would have done so. Yet it did not, apparently because no such unions of
top and middle managers really then existed.
Real Intent of the 1986 Constitutional Commission
This was the law as it stood at the time the Constitutional Commission considered the draft
of Art. III, §8. Commissioner Lerum sought to amend the draft of what was later to become
Art. III, §8 of the present Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to insert

between the words "people" and "to" the following: WHETHER EMPLOYED BY THE
STATE OR PRIVATE ESTABLISHMENTS. In other words, the section will now read as
follows: "The right of the people WHETHER EMPLOYED BY THE STATE OR PRIVATE
ESTABLISHMENTS to form associations, unions, or societies for purposes not
contrary to law shall not be abridged."23
Explaining his proposed amendment, he stated:
MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is granted to
all persons whether or not they are employed in the government. Under that
provision, we allow unions in the government, in government-owned and controlled
corporations and in other industries in the private sector, such as the Philippine
Government Employees' Association, unions in the GSIS, the SSS, the DBP and other
government-owned and controlled corporations. Also, we have unions of supervisory
employees and of security guards. But what is tragic about this is that after the 1973
Constitution was approved and in spite of an express recognition of the right to
organize in P.D. No. 442, known as the Labor Code, the right of government workers,
supervisory employees and security guards to form unions was abolished.
And we have been fighting against this abolition. In every tripartite conference
attended by the government, management and workers, we have always been
insisting on the return of these rights. However, both the government and employers
opposed our proposal, so nothing came out of this until this week when we approved
a provision which states:
Notwithstanding any provision of this article, the right to self-

organization shall not be denied to government employees.
We are afraid that without any corresponding provision covering the private sector,
the security guards, the supervisory employees or majority employees [sic] will still
be excluded, and that is the purpose of this amendment.
I will be very glad to accept any kind of wording as long as it will amount to absolute
recognition of private sector employees, without exception, to organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit more to
read: "The right of the people WHETHER UNEMPLOYED OR EMPLOYED BY STATE
OR PRIVATE ESTABLISHMENTS.
I want to avoid also the possibility of having this interpreted as applicable only to the
employed.
MR. DE LOS REYES. Will the proponent accept an amendment to the amendment,
Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the employees in the
private sector is recognized. 24
Lerum thus anchored his proposal on the fact that (1) government employees, supervisory
employees, and security guards, who had the right to organize under the Industrial Peace
Act, had been denied this right by the Labor Code, and (2) there was a need to reinstate the
right of these employees. In consonance with his objective to reinstate the right of
government, security, and supervisory employees to organize, Lerum then made his
proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members of this
Commission, my amendment will now read as follows: "The right of the people
INCLUDING THOSE EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to form
associations, unions, or societies for purposes not contrary to law shall not be
abridged. In proposing that amendment I ask to make of record that I want the
following provisions of the Labor Code to be automatically abolished, which read:
Art. 245. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employers shall not be eligible for membership in a labor organization.
Art. 246. Managerial employees are not eligible to join, assist, and form
any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the
amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as amended,
is approved.25
The question is what Commissioner Lerum meant in seeking to "automatically abolish" the
then Art. 246 of the Labor Code. Did he simply want "any kind of wording as long as it will
amount to absolute recognition of private sector employees, without exception, to
organize"? Or, did he instead intend to have his words taken in the context of the cause
26
which moved him to propose the amendment in the first place, namely, the denial of the right
of supervisory employees to organize, because he said, "We are afraid that without any
corresponding provision covering the private sector, security guards, supervisory
employees or majority [of] employees will still be excluded, and that is the purpose of this
amendment"? 27
It would seem that Commissioner Lerum simply meant to restore the right of supervisory
employees to organize. For even though he spoke of the need to "abolish" Art. 246 of the
Labor Code which, as already stated, prohibited "managerial employees" in general from
forming unions, the fact was that in explaining his proposal, he repeatedly referred to
"supervisory employees" whose right under the Industrial Peace Act to organize had been
taken away by Art. 246. It is noteworthy that Commissioner Lerum never referred to the then
definition of "managerial employees" in Art. 212(m) of the Labor Code which put together,
under the broad phrase "managerial employees," top and middle managers and supervisors.
Instead, his repeated use of the term "supervisory employees," when such term then was no
longer in the statute books, suggests a frame of mind that remained grounded in the
language of the Industrial Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all managerial
employees to organize, despite the fact that the Industrial Peace Act did not expressly
provide for the right of top and middle managers to organize. If Lerum was aware of the
Caltex dictum, then his insistence on the use of the term "supervisory employees" could only
mean that he was excluding other managerial employees from his proposal. If, on the other
hand, he was not aware of the Caltex statement sustaining the right to organize to top and
middle managers, then the more should his repeated use of the term "supervisory
employees" be taken at face value, as it had been defined in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to refer solely to
supervisors and not to other managerial employees is clear from the following account of
Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner Eulogio R.
Lerum explained that the modification included three categories of workers: (1)
government employees, (2) supervisory employees, and (3) security guards. Lerum
made of record the explicit intent to repeal provisions of P.D. 442, the Labor Code.
The provisions referred to were:
any labor organization.28
Implications of the Lerum Proposal
In sum, Lerum's proposal to amend Art. III, §8 of the draft Constitution by including labor
unions in the guarantee of organizational right should be taken in the context of statements
that his aim was the removal of the statutory ban against security guards and supervisory
employees joining labor organizations. The approval by the Constitutional Commission of his
proposal can only mean, therefore, that the Commission intended the absolute right to
organize of government workers, supervisory employees, and security guards to be
constitutionally guaranteed. By implication, no similar absolute constitutional right to
organize for labor purposes should be deemed to have been granted to top-level and middle
managers. As to them the right of self-organization may be regulated and even abridged
conformably to Art. III, §8.
Constitutionality of Art. 245
Finally, the question is whether the present ban against managerial employees, as embodied
in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This provision reads:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of

supervisory employees. — Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own. 29
This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715,
otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the
provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate
definitions of the terms "managerial" and "supervisory employees," as follows:
Art. 212. Definitions. . . .
(m) "managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire transfer, suspend, lay off,
who, in the interest of the employer, effectively recommend such managerial actions
if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of the
above definitions are considered rank-and-file employees for purposes of this Book.
Although the definition of "supervisory employees" seems to have been unduly restricted to
the last phrase of the definition in the Industrial Peace Act, the legal significance given to the
phrase "effectively recommends" remains the same. In fact, the distinction between top and
middle managers, who set management policy, and front-line supervisors, who are merely
responsible for ensuring that such policies are carried out by the rank and file, is articulated
in the present definition. When read in relation to this definition in Art. 212(m), it will be seen
30
that Art. 245 faithfully carries out the intent of the Constitutional Commission in framing Art.
III, §8 of the fundamental law.
Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, §8 is subject to the
condition that its exercise should be for purposes "not contrary to law." In the case of Art.
245, there is a rational basis for prohibiting managerial employees from forming or joining
labor organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in
his ponencia in Philips Industrial Development, Inc. v. NLRC: 31
In the first place, all these employees, with the exception of the service engineers and
the sales force personnel, are confidential employees. Their classification as such is
not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and
PEO-FFW explicitly considered them as confidential employees. By the very nature of
their functions, they assist and act in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial functions in the field of
labor relations. As such, the rationale behind the ineligibility of managerial employees
to form, assist or joint a labor union equally applies to them.
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on

this rationale, thus:
. . . The rationale for this inhibition has been stated to be, because if
these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in
view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in
Union membership. 32
To be sure, the Court in Philips Industrial was dealing with the right of confidential
employees to organize. But the same reason for denying them the right to organize justifies
even more the ban on managerial employees from forming unions. After all, those who
qualify as top or middle managers are executives who receive from their employers
information that not only is confidential but also is not generally available to the public, or to
their competitors, or to other employees. It is hardly necessary to point out that to say that
the first sentence of Art. 245 is unconstitutional would be to contradict the decision in that
case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado, Romero, Bellosillo, Martinez and Purisima, JJ., concur.
Separate Opinions
DAVIDE, JR., J., concurring and dissenting;
I concur with the majority that the "route managers" of private respondent Pepsi-Cola
Products Philippines, Inc. are managerial employees. However, I respectfully submit that
contrary to the majority's holding, Article 245 of the Labor Code is unconstitutional, as it
abridges Section 8, Article III of the Constitution.
Section 8, Article III of the 1987 Constitution was taken from Section 7, Article IV of the 1973
Constitution which, in turn, was lifted from Section 6, Article III of the 1935 Constitution.
Section 7 of the 1973 Constitution provided as follows:
Sec. 7. The right to form associations or societies for purpose not contrary to law
shall not be abridged.
This Section was adopted in Section 7 of Proposed Resolution No. 486 of the 1986
Constitutional Commission, entitled Resolution to Incorporate in the New Constitution an
Article on the Bill of Rights, submitted by the Committee on Citizenship, Bill of Rights,
1
Political Rights and Obligations, and Human Rights, with a modification, however, consisting
of the insertion of the word union between the words "associations" and "societies." Thus
the proposed Section 7 provided as follows:
Sec. 7. The right of the people to form associations, unions, or societies for purposes
not contrary to law shall not be abridged (emphasis supplied).
Commissioner Joaquin G. Bernas, in his sponsorship speech on the proposed Article on the
Bill of Rights, expounded on the nature of the proposed provision, in this wise:
Section 7 preserves the old provision not because it is strictly needed but because its
removal might be subject to misinterpretation. It reads:
x x x x x x x x x
It strictly does not prepare the old provision because it adds the word UNION, and in
the explanation we received from Commissioner Lerum, the term envisions not just
unions in private corporations but also in the government. This preserves our link
with the Malolos Constitution as far as the right to form associations or societies for
purposes not contrary to law is concerned. 2
During the period of individual amendments, Commissioner Lerum introduced an

amendment to the proposed section consisting of the insertion of the clause "WHETHER
EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS, which, after consulting other
Commissioners, he modified his proposed amendment to read: "INCLUDING THOSE
EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS." At that time, the section read:
Sec. 7. The right of the people including those employed in the public and private
sectors to form associations, unions or societies for purposes not contrary to law
Pertinently to this dispute Commissioner Lerum's intention that the amendment

"automatically abolish" Articles 245 and 246 of the Labor Code. The Committee accepted the
amendment, and there having been no objection from the floor, the Lerum amendment was
approved, thus:
MR. LERUM: . . . In proposing that amendment I ask to make of record that I want the
THE PRESIDING OFFICER (Mr. Bengzon):
What does the Committee say?
FR. BERNAS: The Committee accepts.
The Committee has accepted the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment,
as amended, is approved. 3
The Committee on Style then recommended that commas be placed after the words people
and sectors, while Commissioner Lerum likewise moved to place the word unions before the
word associations. Section 7, which was subsequently renumbered as Section 8 as
4
presently appearing in the text ratified in the plebiscite of 2 February 1987, then read as
follows:
abridged.
It is then indubitably clear from the foregoing that the intent of the Constitutional
Commission was to abrogate the law prohibiting managerial employees from joining,
assisting, or forming unions or labor organizations. In this regard, there is absolutely no
need to decipher the intent of the framers of the 1987 Constitution vis-a-vis Article 245
(originally 246) of the Labor Code, there being no ambiguity or vagueness in the wording of
the present Section 8, Article III of the 1987 Constitution. The provision is clear and written in
simple language; neither were there any confusing debates thereon. More importantly, the
purpose of Commissioner Lerum's amendments was unequivocal: he did not merely intend
an implied repeal, but an express repeal of the offending article of the Labor Code. The
approval of the amendments left no doubt whatsoever, as faithfully disclosed in the Records
of the Constitutional Commission, that all employees meaning rank-and-file, supervisory and
managerial — whether from the public or the private sectors, have the right to form unions
for purposes not contrary to law.
The Labor Code referred to by Commissioner Lerum was P.D. No. 442, promulgated on 1 May
1974. With the repeal of Article 239 by Executive Order No. 111 issued on 24 December
1986, Article 246 (as mentioned by Commissioner Lerum) became Article 245. Thereafter,
5
R.A. No. 6715 amended the new Article 245 (originally Article 246) to read, as follows:
6
Sec. 245. Ineligibility of managerial employees to join any labor organization; right of

With the abrogation of the former Article 246 of the Labor Code, and the constitutional
8
prohibition against any law prohibiting managerial employees from joining, assisting or
forming unions or labor organizations, the first sentence then of the present Article 245 of
the Labor Code must be struck down as unconstitutional. However, due to an obvious
9
conflict of interest — being closely identified with the interests of management in view of the
inherent nature of their functions, duties and responsibilities — managerial employees may
only be eligible to join, assist or form unions or labor organizations of their own rank, and
not those of the supervisory employees nor the rank-and-file employees.
In the instant case, the petitioner's name — United Pepsi-Cola Supervisory Union (UPSU) —
indubitably attests that it is a union of supervisory employees. In light of the earlier
discussion, the route managers who are managerial employees, cannot join or assist UPSU.
Accordingly, the Med-Arbiter and public respondent Laguesma committed no error in
denying the petition for direct certification or for certification election.
I thus vote to GRANT, IN PART, the instant petition. That portion of the challenged resolution
of public respondent holding that since the route managers of private respondent Pepsi-Cola
Products Philippines, Inc., are managerial employees, they are "not eligible to assist, join or
form a union or any other organization" should be SET ASIDE for being violative of Section 8
of Article III of the Constitution, while that portion thereof denying petitioner's appeal from
the Med-Arbiter's decision dismissing the petition for direct certification or for a certification
election should be AFFIRMED.
PUNO, J., separate concurring;
With due respect, it is my submission that Article 245 of the Labor Code was not repealed by
section 8, Article III of the 1987 Constitution for reasons discussed below.
A. Types of Employees.
For purposes of applying the law on labor relations, the Labor Code in Article 212 (m) defines
three (3) categories of employees. They are managerial, supervisory and rank-and-file, thus:
Art. 212 (m). "Managerial Employee" is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees. "Supervisory employees" are
those who, in the interest of the employer, effectively recommended such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees for purposes of this
Book.
The test of "managerial" or "supervisory" status depends on whether a person possesses

authority to act in the interest of his employer and whether such authority is not routinary or
clerical in nature but requires the use of independent judgment. The rank-and-file employee
1
performs work that is routinary and clerical in nature. The distinction between these
employees is significant because supervisory and rank-and-file employees may form, join or
assist labor organizations. Managerial employees cannot.
B. The Exclusion of Managerial Employees: Its Historical Roots in the United States.
The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by the U.S.
Congress in 1935, was the first law that regulated labor relations in the United States and
embodied its national labor policy. The purpose of the NLRA was to eliminate obstructions
2
to the free flow of commerce through the practice of collective bargaining. The NLRA also
sought to protect the workers' full freedoms of association, self-organization, and
designation of representatives of their own choosing, for the purpose of negotiating the
terms and conditions of their employment or other mutual aid and protection. The NLRA3
established the right of employees to organize, required employers to bargain with

employees collectively through employee-elected representatives, gave employees the right
to engage in concerted activities for collective bargaining purposes or other mutual aid or
protection, and created the National Labor Relations Board (NLRB) as the regulatory agency
in labor-management matters. 4
The NLRA was amended in 1947 by the Labor Management Relations Act (LMRA), also
known as the Taft-Hartley Act. This Act sought to lessen industrial disputes and placed
employers in a more nearly equal position with unions in bargaining and labor relations
procedures. 5
The NLRA did not make any special provision for "managerial employees." The privileges
6
and benefits of the Act were conferred on "employees." Labor organizations thus clamored
for the inclusion of supervisory personnel in the coverage of the Act on the ground that
supervisors were also employees. Although traditionally, supervisors were regarded as part
of management, the NLRB was constrained to recognize supervisors as employees under the
coverage of the law. Supervisors were then granted collective bargaining
rights. Nonetheless, the NLRB refused to consider managers as covered by the law.
7 8
The LMRA took away the collective bargaining rights of supervisors. The sponsors of the
amendment feared that their unionization would break down industrial discipline as it would
blur the traditional distinction between management and labor. They felt it necessary to deny
supervisory personnel the right of collective bargaining to preserve their loyalty to the
interests of their employers. 9
Several amendments were later made on the NLRA but the exclusion of managers and
supervisors from its coverage was preserved. Until now managers and supervisors are
excluded from the law. Their exclusion hinges on the theory that the employer is entitled to
10
the full loyalty of those whom it chooses for positions of responsibility, entailing action on
the employers' behalf. A supervisor's and manager's ability to control the work of others
would be compromised by his sharing of employee status with them. 11
C. Historical Development in the Philippines.
Labor-management relations in the Philippines were first regulated under the Industrial
Peace Act which took effect in 1953. Hailed as the Magna Carta of Labor, it was modelled
12
after the NLRA and LMRA of the United States. Most of the basic principles of the NLRA
13
have been carried over to the Industrial Peace Act and the Labor Code. This is significant
14
because we have ruled that where our labor statutes are based on statutes in foreign
jurisdiction, the decisions of the high courts in those jurisdictions construing and
interpreting the Act are given persuasive effects in the application of Philippine law. 15
The Industrial Peace Act did not carry any provision prohibiting managerial employees from
joining labor organizations. Section 3 of said law merely provided:

supervision but may form separate organizations of their own.
Significantly, the Industrial Peace Act did not define a manager or managerial employee. It
defined a "supervisor" but not a "manager." Thus:
Sec. 2. . . .
independent judgment.
In 1972, we interpreted Section 3 of the Industrial Peace Act to give supervisors the right to
join and form labor organizations of their own. Soon we grappled with the right of managers
16
to organize. In a case involving Caltex managers, we recognized their right to organize, viz:
company, that of the alleged identity of interest between the managerial staff and the
employing firm. That should ordinarily be the case, especially so where the dispute is
between management and the rank-and-file. It does not necessarily follow though that
what binds the managerial staff to the corporation forecloses the possibility of
conflict between them. There could be a real difference between what the welfare of
such group requires and the concessions the firm is willing to grant. Their needs
might not be attended to then in the absence of any organization of their own. Nor is
this to indulge in empty theorizing. The records of respondent company, even the
very case cited by it, is proof enough of their uneasy and troubled relationship.
Certainly the impression is difficult to erase that an alien firm failed to manifest
sympathy for the claims of its Filipino executives. 17
The Industrial Peace Act was repealed in 1975 by P.D. 442, the Labor Code of the Philippines.
The Labor Code changed existing jurisprudence when it prohibited supervisory and
managerial employees from joining labor organizations. Supervisory unions were no longer
recognized nor allowed to exist and operate as such. We affirmed this statutory change
18
in Bulletin Publishing Corp. v. Sanchez. Similarly, Article 246 of the Labor Code expressly
19
prohibited managerial employees from forming, assisting and joining labor organizations, to

wit:
Art. 246. Ineligibility of managerial employees to join any labor organization. —

Managerial employees are not eligible to join, assist or form any labor organization.
In the same Bulletin case, the Court applied Article 246 and held that managerial employees
are the very type of employees who, by the nature of their positions and functions, have been
decreed disqualified from bargaining with management. This prohibition is based on the
rationale that if managerial employees were to belong or be affiliated with a union, the union
might not be assured of their loyalty in view of evident conflict of interest or that the union
can be company-dominated with the presence of managerial employees in the union
membership. In the collective bargaining process, managerial employees are supposed to
20
be on the side of the employer, to act as its representative, and to see to it that its interests
are well protected. The employer is not assured of such protection if these employees
themselves become union members. 21
The prohibition on managerial employees to join, assist or form labor organizations was
retained in the Labor Code despite substantial amendments made in 1989 by R.A. 6715, the
Herrera-Veloso Law. R.A. 6715 was passed after the effectivity of the 1987 Constitution and
this law did not abrogate, much less amend the prohibition on managerial employees to join
labor organizations. The express prohibition in Article 246 remained. However, as an
addendum to this same Article, R.A. 6715 restored to supervisory employees the right to join
labor organizations of their own. Article 246 now reads:
22
assist or form separate labor organizations of their own.
Article 246 became Article 245 after then Article 244 was repealed by E.O. 111. Article 246 is
presently Article 245 of the Labor Code.
Indeed, Article 245 of the Labor Code prohibiting managerial employees from joining labor
organizations has a social and historical significance in our labor relations law. This
significance should be considered in deciphering the intent of the framers of the 1987
Constitution vis-a-vis the said Article.
With due respect, I do not subscribe to the view that section 8, Article III of the Constitution
abrogated Article 245 of the Labor Code. A textual analysis of section 8, Article III of the
Constitution will not justify this conclusion. With due respect, the resort by Mr. Justice
Davide to the deliberations of the Constitutional Commission does not suffice. It is generally
recognized that debates and other proceedings in a constitutional convention are of limited
value and are an unsafe guide to the intent of the people. Judge Cooley has stated that:
23
When the inquiry is directed to ascertaining the mischief designed to be remedied, or

the purpose sought to be accomplished by a particular provision, it may be proper to
examine the proceedings of the convention which framed the instrument. Where the
proceedings clearly point out the purpose of the provision, the aid will be valuable
and satisfactory; but where the question is one of abstract meaning, it will be difficult
to derive from this source much reliable assistance in interpretation. Every member of
such a convention acts upon such motives and reasons as influence him personally,
and the motions and debates do not necessarily indicate the purpose of a majority of
a convention in adopting a particular clause. It is quite possible for a particular clause
to appear so clear and unambiguous to the members of the convention as to require
neither discussion nor illustration; and the few remarks made concerning it in the
convention might have a plain tendency to lead directly away from the meaning in the
minds of the majority. It is equally possible for a part of the members to accept a
clause in one sense and a part in another. And even if we were certain we had
attained to the meaning of the convention, it is by no means to be allowed a
controlling force, especially if that meaning appears not to be the one which the
words would most naturally and obviously convey. For as the constitution does not
derive its force from the convention which framed, but from the people who ratified it,
the intent to be arrived at is that of the people, and it is not to be supposed that they
have looked for any dark and abstruse meaning in the words employed, but rather
that they have accepted them in the sense most obvious to the common
understanding, and ratified the instrument in the belief that was the sense designed to
be conveyed. 24
It is for this reason that proceedings of constitutional conventions are less conclusive of the
proper construction of the instrument than are legislative proceedings of the proper
construction of the statute. In the statutes, it is the intent of the legislature that is being
25
sought, while in constitutions, it is the intent of the people that is being ascertained through
the discussions and deliberations of their representatives. The proper interpretation of
26
constitutional provisions depends more on how it was understood by the people adopting it
than in the framers' understanding thereof. 27
Thus, debates and proceedings of the constitutional convention are never of binding force.
They may be valuable but are not necessarily decisive. They may shed a useful light upon
28
the purpose sought to be accomplished or upon the meaning attached to the words
employed. And the courts are free to avail themselves of any light that may be derived from
such sources, but they are not bound to adopt it as the sole ground of their decision. 29
Clearly then, a statute cannot be declared void on the sole ground that it is repugnant to a
supposed intent or spirit declared in constitutional convention proceedings.
D. Freedom of Association
The right of association flows from freedom of expression. Like the right of expression, the
30
exercise of the right of association is not absolute. It is subject to certain limitations.
Article 243 of the Labor Code reiterates the right of association of people in the labor sector.
Article 243 provides:
Art. 243. Coverage of employees' right to self-organization. — All persons employed

in commercial, industrial and agricultural enterprises and in religious, charitable,
medical, or educational institutions whether operating for profit or not, shall have the
right to self-organization and to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.
Article 243 guarantees the right to self-organization and association to "all persons." This
seemingly all-inclusive coverage of "all persons," however, actually admits of exceptions.
Article 244 of the Labor Code mandates that all employees in the civil service, i.e, those not
31
employed in government corporations established under the Corporation Code, may only
form associations but may not collectively bargain on terms and conditions fixed by law. An
employee of a cooperative who is a member and co-owner thereof cannot invoke the right of
collective bargaining and negotiation vis-a-vis the cooperative. An owner cannot bargain
32
with himself or his co-owners. Employees in foreign embassies or consulates or in foreign

33
international organizations granted international immunities are also excluded from the right
to form labor organizations. International organizations are organized mainly as a means
34
for conducting general international business in which the member-states have an interest
and the immunities granted them shield their affairs from political pressure or control by the
host country and assure the unimpeded performance of their functions. 35
Confidential employees have also been denied the right to form labor-organizations.
Confidential employees do not constitute a distinct category for purposes of organizational
right. Confidentiality may attach to a managerial or non-managerial position. We have,
however, excluded confidential employees from joining labor organizations following the
rationale behind the disqualification of managerial employees in Article 245. In the case
of National Association of Trade Unions-Republic Planters' Bank Supervisors Chapter
v. Torres, we held:
36
In the collective bargaining process, managerial employees are supposed to be on the

side of the employer, to act as its representatives, and to see to it that its interests are
well protected. The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation can become
one-sided. It is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Article 245 as if the
disqualification of confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves, then
they could be governed by their own motives rather than the interest of the
employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals
who are supposed to act "in the interest of" the employers. It is not farfetched that in
the course of collective bargaining, they might jeopardize that interest which they are
duty-bound to protect. 37
E. The disqualification extends only to labor organizations.
It must be noted that Article 245 of the Labor Code deprives managerial employees of their
right to join "labor organizations." A labor organization is defined under the Labor Code as:
Art. 212 (g). "Labor organization" means any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with
the employer concerning terms and conditions of employment.
A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right
given to a labor organization once it registers itself with the Department of Labor and
Employment (DOLE). Dealing with the employer, on the other hand, is a generic description
of interaction between employer and employees concerning grievances, wages, work hours
and other terms and conditions of employment, even if the employees' group is not
registered with the DOLE. Any labor organization which may or may not be a union may
38
deal with the employer. This explains why a workers' Organization does not always have to
be a labor union and why employer-employee collective interactions are not always collective
bargaining. 39
In the instant case, it may be argued that managerial employees' labor organization will
merely "deal with the employer concerning terms and conditions of employment" especially
when top management is composed of aliens, following the circumstances in the Caltex
case.
Although the labor organization may exist wholly for the purpose of dealing with the
employer concerning terms and conditions of employment, there is no prohibition in the
Labor Code for it to become a legitimate labor organization and engage in collective
bargaining. Once a labor organization registers with the DOLE and becomes legitimate, it is
entitled to the rights accorded under Articles 242 and 263 (b) of the Labor Code. And these
include the right to strike and picket.
Notably, however, Article 245 does not absolutely disqualify managerial employees from
exercising their right of association. What it prohibits is merely the right to join labor
organizations. Managerial employees may form associations or organizations so long as they
are not labor organizations. The freedom of association guaranteed under the Constitution
remains and has not been totally abrogated by Article 245.
To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing
industrial life and will open the floodgates to unionization at all levels of the industrial
hierarchy. Such a ruling will wreak havoc on the existing set-up between management and
labor. If all managerial employees will be allowed to unionize, then all who are in the payroll
of the company, starting from the president, vice-president, general managers and everyone,
with the exception of the directors, may go on strike or picket the
employer. Company officers will join forces with the supervisors and rank-and-file.
40
Management and labor will become a solid phalanx with bargaining rights that could be
enforced against the owner of the company. The basic opposing forces in the industry will
41
not be management and labor but the operating group on the one hand and the stockholder
and bondholder group on the other. The industrial problem defined in the Labor Code comes
down to a contest over a fair division of the gross receipts of industry between these two
groups. And this will certainly bring ill-effects on our economy.
42
The framers of the Constitution could not have intended a major upheaval of our labor and
socio-economic systems. Their intent cannot be made to override substantial policy
considerations and create absurd or impossible situations. A constitution must be viewed
43
as a continuously operative charter of government. It must not be interpreted as demanding

the impossible or the impracticable; or as effecting the unreasonable or absurd. Courts
44
should always endeavour to give such interpretation that would make the constitutional
provision and the statute consistent with reason, justice and the public interest. 45
I vote to dismiss the petition.
VITUG, J., separate concurring and dissenting;
The pivotal issues raised in the case at bar, aptly stated by the Office of the Solicitor General,
are:
(1) Whether or not public respondent, Undersecretary of the Department of Labor and
Employment ("DOLE") Bienvenido E. Laguesma, gravely abused his discretion in
categorizing the members of petitioner union to be managerial employees and thus ineligible
to form or join labor organizations; and
(2) Whether or not the provision of Article 245 of the Labor Code, disqualifying managerial
employees from joining, assisting or forming any labor organization, violates Section 8,
Article III, of the 1987 Constitution, which expresses that "(t)he right of the people, including
those employed in public and private sectors to form unions, associations or societies for
purposes not contrary to law shall not be abridged."
The case originated from a petition for direct certification or certification election among
route managers/supervisory employees of Pepsi-Cola Products Phils., Inc. ("Pepsi"), filed by
the United Pepsi-Cola Supervisory Union ("Union"), claiming to be a legitimate labor
organization duly registered with the Department of Labor and Employment under
Registration Certificate No. NCR-UR-3-1421-95. Pepsi opposed the petition on the thesis that
the case was no more than a mere duplication of a previous petition for direct
certification filed by the same route managers through the Pepsi-Cola Employees
1
Association (PCEA-Supervisory) which petition had already been denied by Undersecretary

Laguesma. The holding reiterated a prior decision in Workers Alliance Trade Unions
("WATU") vs. Pepsi-Cola Products Phils., Inc., that route managers were managerial
2
employees.
In its decision, dated 05 May 1995, Med-Arbiter Brigida C. Fadrigon dismissed for lack of
merit the petition of the Union, stating that the issue on the proper classification and status
of route managers had already been ruled with finality in the previous decisions,
aforementioned, rendered by DOLE.
The union appealed the decision. In his resolution of 31 August 1995, Undersecretary
Laguesma dismissed the appeal, saying that there was no compelling reason to abandon the
ruling in the two old cases theretofore decided by DOLE. In his order of 22 September 1995,
Undersecretary Laguesma denied the Union's motion for reconsideration.
The Union went to this Court, via a petition for certiorari, assailing the cancellation of its
certificate of registration. The Court, after considering the petition and the comments thereon
filed by both public and private respondents, as well as the consolidated reply of petitioner,
dismissed the case in its resolution of 08 July 1996 on the premise that no grave abuse of
discretion had been committed by public respondent.
Undaunted, the Union moved, with leave, for the reconsideration of the dismissal of its
petition by the Court En Banc. In its resolution of 16 June 1997, the case was referred to the
Court En Banc en consulta with the movant's invocation of unconstitutionality of Article 245
of the Labor Code vis-a-vis Section 8, Article III, of the 1987 Constitution.
There is merit, in my view, in petitioner's motion for reconsideration but not on constitutional
grounds.
There are, in the hierarchy of management, those who fall below the level of key officers of
an enterprise whose terms and conditions of employment can well be, indeed are not
infrequently, provided for in collective bargaining agreements. To this group belong the
supervisory employees. The "managerial employees," upon the other hand, and relating the
matter particularly to the Labor Code, are those "vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees" as distinguished from the supervisory employees
whose duties in these areas are so designed as to verily be implementary to the policies or
rules and regulations already outstanding and priorly taken up and passed upon by
management. The managerial level is the source, as well as prescribes the compliance, of
broad mandates which, in the field of labor relations, are to be carried out through the next
rank of employees charged with actually seeing to the specific personnel action required. In
fine, the real authority, such as in hiring or firing of employees, comes from management and
exercised by means of instructions, given in general terms, by the "managerial employees;"
the supervisory employees, although ostensibly holding that power, in truth, however, only
act in obedience to the directives handed down to them. The latter unit, unlike the former,
cannot be considered the alter ego of the owner of enterprise.
The duties and responsibilities of the members of petitioner union, shown by their "job
description" below —
PCPPI
RM's JOB DESCRIPTION
A. GENERAL/OVERALL OBJECTIVE OF THIS POSITION
To contribute to the growth and profitability of PCPPI via well-selected,

trained and motivated Route Sales Team who sell, collect and
merchandise, following the Pepsi Way, and consistent with Company
policies and procedures as well as the corporate vision of Customer
Satisfaction.
B. SPECIFIC JOB DESCRIPTION:
KEY RESULT AREAS STANDARD OR PERFORMANCE
SALES VOLUME *100% Vs. NRC Target
_____% NTG
DISTRIBUTION * Product Availability
70% Pepsi
80% Seven-Up
40% Mirinda
65% Mt. Dew
5% Out of Stock
ACCOUNTS RECEIVABLE 65% Current (Incl. Legal & Col.)
MANAGEMENT 80:20 Cash to Credit Ratio
DSO — assigned Std. to Division
by the District
ASSET MANAGEMENT 30 cases for ice-coolers
80 cases for electric coolers
BLOWAGA on Division Vehicles
60 cases on Rolling/Permanent
Kiosks
TRADE DEVELOPMENT 100% Buying Customers Based
on master list that bought once
5 months payback on concessions
4 CED's/Rte.
EXPENSE MANAGEMENT a). 5% Absentism rate Excl. VL
b). 280 cases/route/day
c). 15% cost-to-sales ratio
ROUTE MANAGEMENT 3 Days on RR/Wk
— Days on BC-SC- Financial &
Co. Assets
— Days on TD
75% Load Factor
18 Productive Calls
CUSTOMER SATISFACTION Customer Complaint attended to within the

next working day
HUMAN RESOURCE 5% Absentism Excl. VL
MANAGEMENT (approved) 3 Documented RR/
Week using SLM's Training Log
ADMINISTRATIVE — Complete, timely and accurate
MANAGEMENT reports.
PCPPI
RM's BASIC DAILY ACTIVITIES
A. AT THE SALES OFFICE
1. PRACTICES BLOWAGA ON SERVICE VEHICLE (AT HOME)

2. REPORTS FOR WORK ON OR BEFORE 6:15 A.M.
3. REPORTS IN CLEAN AND NEAT UNIFORM (GOOD GROOMING)
4. DAILY BRIEFING WITH THE DM
5. CONDUCTS SKILLS ENHANCEMENT OR HUDDLES WITH RST's
a). ATTENDANCE/GROOMING
b). OPERATIONAL DIRECTIONS & PRIORITIES
c). ANNOUNCEMENT
6. RM's PRESENCE DURING CHECK-OUT
a). SLM PRACTICES BLOWAGA ON ROUTE TRUCK
b). PRIVATE COUNSELING WITH RST (AM & PM IF

NECESSARY)
c). PROPER HANDLING OF SELLING/MDSG. MATERIALS
d). YESTERDAY's FINAL SETTLEMENT REVIEW
7. UPDATE REPORTS, MONITORS, DOCUMENTS & TELEPHONE

CONMATION
8. ATTENDS TO PRODUCT COMPLAINTS (GFM)
9. CONDUCTS ADMINISTRATIVE INVESTIGATION OR ATTENDS DM's

MEETING (on Saturdays)
B. FIELD WORK
ROUTE RIDE
1. CHECKS SLMS. TRAINING LOG (PROGRESS & DEV'T.)
2. SALESMAN's CPC
3. ROUTE COVERAGE EVALUATION
4. LOAD FACTOR
5. SALESMAN's ROUTING SYSTEM EVALUATION
BC/SC
1. FINANCIAL & ASSET VERIFICATION, CONFIRMATION & AUDIT
2. BACKCHECKS FIRST 5 CUSTOMERS SERVED FOR THE DAY
a). MERCHANDISING
b). SERVICING
c). RM's TERRITORY FAMILIARITY
d). KEY ACCOUNTS GOODWILL
TRADE DEVELOPMENT
1. PREPARATION PRIOR TO CALL
2. ACTUAL CALL
3. POST CALL ANALYSIS
(HOW DID I FARE? WHY? WHAT ACTIONS TO TAKE)
4. FOLLOW-UP ACTION
C. AT CLOSE OF DAY
1. MAINTAINS & UPDATES CORRECT & ACCURATE RECORDS &

REPORTS
2. RM-SLM DEBRIEFING
3. SLR DISCUSSION (BASED ON A.M. SLR)
4. COORDINATES WITH DM ON PLANS & PROGRAMS
5. PREPARATIONS FOR NEXT DAY's ACTIVITIES 3
— convey no more than those that are aptly consigned to the "supervisory" group by the
relatively small unit of "managerial" employees. Certain portions of a pamphlet, the so-called
"Route Manager Position Description" referred to by Mr. Justice Vicente Mendoza, in
his ponencia, hereunder reproduced for easy reference, thus —
A. BASIC PURPOSE
achieve this objective through the skillful management of your job and
the management of your people.
these functions — managing your job and managing your people —
you are accountable to your District Manager for the execution and

account objectives.


merchandising objectives are achieved in
all outlets.
1.1.5 Maintain and improve productivity of


promotions.

goodwill.


1.2 Administration


basis.

include but not limited to shakedown;
route shortage; progressive discipline;
sorting; spoilages; credit/collection;
accident; attendance.



merchandising techniques of the
2.2 Code of Conduct

unquestioned business ethics. —
offer nothing at all that can approximate the authority and functions of those who actually
and genuinely hold the reins of management.
I submit, with due respect, that the members of petitioning union, not really being
"managerial employees" in the true sense of the term, are not disqualified from forming or
joining labor organizations under Article 245 of the Labor Code.
I shall now briefly touch base on the constitutional question raised by the parties on Article
245 of the Labor Code.
The Constitution acknowledges "the right of the people, including those employed in the
public and private sectors, to form unions, associations or societies for purposes not
contrary to law . . . ." Perforce, petitioner claims, that part of Article 245 of the Labor Code
4 5
which states: "Managerial employees are not eligible to join, assist or form any labor
organization," being in direct collision with the Constitutional provision, must now be
declared abrogated in the law.
Frankly, I do not see such a "direct collision." The Constitution did not obviously grant a
limitless right "to form unions, associations or societies" for it has clearly seen it fit to
subject its exercise to possible legislative judgment such as may be appropriate or, to put it
in the language of the Constitution itself, to "purposes not contrary to law."
Freedom of association, like freedom of expression, truly occupies a choice position in the
hierarchy of constitutional values. Even while the Constitution itself recognizes the State's
prerogative to qualify this right, heretofore discussed, any limitation, nevertheless, must still
be predicated on the existence of a substantive evil sought to be addressed. Indeed, in the
6
exercise of police power, the State may, by law, prescribe proscriptions, provided reasonable
and legitimate of course, against even the most basic rights of individuals.
The restriction embodied in Article 245 of the Labor Code is not without proper rationale.
Concededly, the prohibition to form labor organizations on the part of managerial employees
narrows down their freedom of association. The very nature of managerial functions,
however, should preclude those who exercise them from taking a position adverse to the
interest they are bound to serve and protect. The mere opportunity to undermine that interest
can validly be restrained. To say that the right of managerial employees to form a "labor
organization" within the context and ambit of the Labor Code should be deemed totally
separable from the right to bargain collectively is not justified by related provisions of the
Code. For instance —
Art. 212. Definitions. — . . .

7
(g) "Labor organization" means any union or association of employees which exists
in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment.
x x x x x x x x x
(m) "Managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
if the exercise of such authority is not merely routinely or clerical in nature but
Art. 263. . . .
(b) Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of legitimate
labor organizations to strike and picket and of employers to lockout, consistent with
the national interest, shall continue to be recognized and respected.
The maxim "ut res magis quam pereat" requires not merely that a statute should be given
such a consequence as to be deemed whole but that each of its express provisions equally
should be given the intended effect.
I find it hard to believe that the fundamental law could have envisioned the use by managerial
employees of coercive means against their own employers over matters entrusted by the
latter to the former. Whenever trust and confidence is a major aspect of any relationship, a
conflict of interest on the part of the person to whom that trust and confidence is reposed
must be avoided and when, unfortunately, it does still arise its containment can rightly be
decreed.
Article 245 of the Labor Code indeed aligns itself to the Corporation Code, the basic law on
by far the most commonly used business vehicle — the corporation — which prescribes the
tenure of office, as well as the duties and functions, including terms of employment
(governed in most part by the Articles of Incorporation, the By-laws of the Corporation, or
resolutions of the Board of Directors), of corporate officers for both the statutory
officers, i.e., the president, the treasurer and the corporate secretary, and the non-statutory
officers, i.e., those who occupy positions created by the corporate by-laws who are deemed
essential for effective management of the enterprise. I cannot imagine these officers as being
legally and morally capable of associating themselves into a labor organization and asserting
collective bargaining rights against the very entity in whose behalf they act and are
supposed to act.
I submit, accordingly, that, firstly, the members of petitioner union or the so-called route
managers, being no more than supervisory employees, can lawfully organize themselves into
a labor union within the meaning of the Labor Code, and that, secondly, the questioned
provision of Article 245 of the Labor Code has not been revoked by the 1987 Constitution.
WHEREFORE, I vote, given all the foregoing, for the reversal of the resolution of 31 August
1995, and the order of 22 September 1995, of public respondent.
Kapunan, Panganiban and Quisumbing, JJ., concur and dissent.
Separate Opinions
I concur with the majority that the "route managers" of private respondent Pepsi-Cola
Products Philippines, Inc. are managerial employees. However, I respectfully submit that
contrary to the majority's holding, Article 245 of the Labor Code is unconstitutional, as it
abridges Section 8, Article III of the Constitution.
Section 8, Article III of the 1987 Constitution was taken from Section 7, Article IV of the 1973
Constitution which, in turn, was lifted from Section 6, Article III of the 1935 Constitution.
Section 7 of the 1973 Constitution provided as follows:
Sec. 7. The right to form associations or societies for purpose not contrary to law
This Section was adopted in Section 7 of Proposed Resolution No. 486 of the 1986
Constitutional Commission, entitled Resolution to Incorporate in the New Constitution an
Article on the Bill of Rights, submitted by the Committee on Citizenship, Bill of Rights,
1
Political Rights and Obligations, and Human Rights, with a modification, however, consisting
of the insertion of the word union between the words "associations" and "societies." Thus
the proposed Section 7 provided as follows:
Sec. 7. The right of the people to form associations, unions, or societies for purposes
not contrary to law shall not be abridged (emphasis supplied).
Commissioner Joaquin G. Bernas, in his sponsorship speech on the proposed Article on the
Bill of Rights, expounded on the nature of the proposed provision, in this wise:
Section 7 preserves the old provision not because it is strictly needed but because its
removal might be subject to misinterpretation. It reads:
x x x x x x x x x
It strictly does not prepare the old provision because it adds the word UNION, and in
the explanation we received from Commissioner Lerum, the term envisions not just
unions in private corporations but also in the government. This preserves our link
with the Malolos Constitution as far as the right to form associations or societies for
purposes not contrary to law is concerned. 2
During the period of individual amendments, Commissioner Lerum introduced an

amendment to the proposed section consisting of the insertion of the clause "WHETHER
EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS, which, after consulting other
Commissioners, he modified his proposed amendment to read: "INCLUDING THOSE
EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS." At that time, the section read:
Sec. 7. The right of the people including those employed in the public and private
sectors to form associations, unions or societies for purposes not contrary to law
Pertinently to this dispute Commissioner Lerum's intention that the amendment

"automatically abolish" Articles 245 and 246 of the Labor Code. The Committee accepted the
amendment, and there having been no objection from the floor, the Lerum amendment was
approved, thus:
MR. LERUM: . . . In proposing that amendment I ask to make of record that I want the

What does the Committee say?
FR. BERNAS: The Committee accepts.
The Committee has accepted the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment,
as amended, is approved. 3
The Committee on Style then recommended that commas be placed after the words people
and sectors, while Commissioner Lerum likewise moved to place the word unions before the
word associations. Section 7, which was subsequently renumbered as Section 8 as
4
presently appearing in the text ratified in the plebiscite of 2 February 1987, then read as
follows:
abridged.
It is then indubitably clear from the foregoing that the intent of the Constitutional
Commission was to abrogate the law prohibiting managerial employees from joining,
assisting, or forming unions or labor organizations. In this regard, there is absolutely no
need to decipher the intent of the framers of the 1987 Constitution vis-a-vis Article 245
(originally 246) of the Labor Code, there being no ambiguity or vagueness in the wording of
the present Section 8, Article III of the 1987 Constitution. The provision is clear and written in
simple language; neither were there any confusing debates thereon. More importantly, the
purpose of Commissioner Lerum's amendments was unequivocal: he did not merely intend
an implied repeal, but an express repeal of the offending article of the Labor Code. The
approval of the amendments left no doubt whatsoever, as faithfully disclosed in the Records
of the Constitutional Commission, that all employees meaning rank-and-file, supervisory and
managerial — whether from the public or the private sectors, have the right to form unions
for purposes not contrary to law.
The Labor Code referred to by Commissioner Lerum was P.D. No. 442, promulgated on 1 May
1974. With the repeal of Article 239 by Executive Order No. 111 issued on 24 December
1986, Article 246 (as mentioned by Commissioner Lerum) became Article 245. Thereafter,
5
R.A. No. 6715 amended the new Article 245 (originally Article 246) to read, as follows:
6
Sec. 245. Ineligibility of managerial employees to join any labor organization; right of

With the abrogation of the former Article 246 of the Labor Code, and the constitutional
8
prohibition against any law prohibiting managerial employees from joining, assisting or
forming unions or labor organizations, the first sentence then of the present Article 245 of
the Labor Code must be struck down as unconstitutional. However, due to an obvious
9
conflict of interest — being closely identified with the interests of management in view of the
inherent nature of their functions, duties and responsibilities — managerial employees may
only be eligible to join, assist or form unions or labor organizations of their own rank, and
not those of the supervisory employees nor the rank-and-file employees.
In the instant case, the petitioner's name — United Pepsi-Cola Supervisory Union (UPSU) —
indubitably attests that it is a union of supervisory employees. In light of the earlier
discussion, the route managers who are managerial employees, cannot join or assist UPSU.
Accordingly, the Med-Arbiter and public respondent Laguesma committed no error in
denying the petition for direct certification or for certification election.
I thus vote to GRANT, IN PART, the instant petition. That portion of the challenged resolution
of public respondent holding that since the route managers of private respondent Pepsi-Cola
Products Philippines, Inc., are managerial employees, they are "not eligible to assist, join or
form a union or any other organization" should be SET ASIDE for being violative of Section 8
of Article III of the Constitution, while that portion thereof denying petitioner's appeal from
the Med-Arbiter's decision dismissing the petition for direct certification or for a certification
election should be AFFIRMED.
With due respect, it is my submission that Article 245 of the Labor Code was not repealed by
section 8, Article III of the 1987 Constitution for reasons discussed below.
A. Types of Employees.
For purposes of applying the law on labor relations, the Labor Code in Article 212 (m) defines
three (3) categories of employees. They are managerial, supervisory and rank-and-file, thus:
Art. 212 (m). "Managerial Employee" is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees. "Supervisory employees" are
those who, in the interest of the employer, effectively recommended such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees for purposes of this
Book.
The test of "managerial" or "supervisory" status depends on whether a person possesses

authority to act in the interest of his employer and whether such authority is not routinary or
clerical in nature but requires the use of independent judgment. The rank-and-file employee
1
performs work that is routinary and clerical in nature. The distinction between these
employees is significant because supervisory and rank-and-file employees may form, join or
assist labor organizations. Managerial employees cannot.
B. The Exclusion of Managerial Employees: Its Historical Roots in the United States.
The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by the U.S.
Congress in 1935, was the first law that regulated labor relations in the United States and
embodied its national labor policy. The purpose of the NLRA was to eliminate obstructions
2
to the free flow of commerce through the practice of collective bargaining. The NLRA also
sought to protect the workers' full freedoms of association, self-organization, and
designation of representatives of their own choosing, for the purpose of negotiating the
terms and conditions of their employment or other mutual aid and protection. The NLRA3
established the right of employees to organize, required employers to bargain with

employees collectively through employee-elected representatives, gave employees the right
to engage in concerted activities for collective bargaining purposes or other mutual aid or
protection, and created the National Labor Relations Board (NLRB) as the regulatory agency
in labor-management matters. 4
The NLRA was amended in 1947 by the Labor Management Relations Act (LMRA), also
known as the Taft-Hartley Act. This Act sought to lessen industrial disputes and placed
employers in a more nearly equal position with unions in bargaining and labor relations
procedures. 5
The NLRA did not make any special provision for "managerial employees." The privileges
6
and benefits of the Act were conferred on "employees." Labor organizations thus clamored
for the inclusion of supervisory personnel in the coverage of the Act on the ground that
supervisors were also employees. Although traditionally, supervisors were regarded as part
of management, the NLRB was constrained to recognize supervisors as employees under the
coverage of the law. Supervisors were then granted collective bargaining
rights. Nonetheless, the NLRB refused to consider managers as covered by the law.
7 8
The LMRA took away the collective bargaining rights of supervisors. The sponsors of the
amendment feared that their unionization would break down industrial discipline as it would
blur the traditional distinction between management and labor. They felt it necessary to deny
supervisory personnel the right of collective bargaining to preserve their loyalty to the
interests of their employers. 9
Several amendments were later made on the NLRA but the exclusion of managers and
supervisors from its coverage was preserved. Until now managers and supervisors are
excluded from the law. Their exclusion hinges on the theory that the employer is entitled to
10
the full loyalty of those whom it chooses for positions of responsibility, entailing action on
the employers' behalf. A supervisor's and manager's ability to control the work of others
would be compromised by his sharing of employee status with them. 11
C. Historical Development in the Philippines.
Labor-management relations in the Philippines were first regulated under the Industrial
Peace Act which took effect in 1953. Hailed as the Magna Carta of Labor, it was modelled
12
after the NLRA and LMRA of the United States. Most of the basic principles of the NLRA
13
have been carried over to the Industrial Peace Act and the Labor Code. This is significant
14
because we have ruled that where our labor statutes are based on statutes in foreign
jurisdiction, the decisions of the high courts in those jurisdictions construing and
interpreting the Act are given persuasive effects in the application of Philippine law. 15
The Industrial Peace Act did not carry any provision prohibiting managerial employees from
joining labor organizations. Section 3 of said law merely provided:

supervision but may form separate organizations of their own.
Significantly, the Industrial Peace Act did not define a manager or managerial employee. It
defined a "supervisor" but not a "manager." Thus:
Sec. 2. . . .
independent judgment.
In 1972, we interpreted Section 3 of the Industrial Peace Act to give supervisors the right to
join and form labor organizations of their own. Soon we grappled with the right of managers
16
to organize. In a case involving Caltex managers, we recognized their right to organize, viz:
company, that of the alleged identity of interest between the managerial staff and the
employing firm. That should ordinarily be the case, especially so where the dispute is
between management and the rank-and-file. It does not necessarily follow though that
what binds the managerial staff to the corporation forecloses the possibility of
conflict between them. There could be a real difference between what the welfare of
such group requires and the concessions the firm is willing to grant. Their needs
might not be attended to then in the absence of any organization of their own. Nor is
this to indulge in empty theorizing. The records of respondent company, even the
very case cited by it, is proof enough of their uneasy and troubled relationship.
Certainly the impression is difficult to erase that an alien firm failed to manifest
sympathy for the claims of its Filipino executives. 17
The Industrial Peace Act was repealed in 1975 by P.D. 442, the Labor Code of the Philippines.
The Labor Code changed existing jurisprudence when it prohibited supervisory and
managerial employees from joining labor organizations. Supervisory unions were no longer
recognized nor allowed to exist and operate as such. We affirmed this statutory change
18
in Bulletin Publishing Corp. v. Sanchez. Similarly, Article 246 of the Labor Code expressly
19
prohibited managerial employees from forming, assisting and joining labor organizations, to

wit:
Art. 246. Ineligibility of managerial employees to join any labor organization. —

Managerial employees are not eligible to join, assist or form any labor organization.
In the same Bulletin case, the Court applied Article 246 and held that managerial employees
are the very type of employees who, by the nature of their positions and functions, have been
decreed disqualified from bargaining with management. This prohibition is based on the
rationale that if managerial employees were to belong or be affiliated with a union, the union
might not be assured of their loyalty in view of evident conflict of interest or that the union
can be company-dominated with the presence of managerial employees in the union
membership. In the collective bargaining process, managerial employees are supposed to
20
be on the side of the employer, to act as its representative, and to see to it that its interests
are well protected. The employer is not assured of such protection if these employees
themselves become union members. 21
The prohibition on managerial employees to join, assist or form labor organizations was
retained in the Labor Code despite substantial amendments made in 1989 by R.A. 6715, the
Herrera-Veloso Law. R.A. 6715 was passed after the effectivity of the 1987 Constitution and
this law did not abrogate, much less amend the prohibition on managerial employees to join
labor organizations. The express prohibition in Article 246 remained. However, as an
addendum to this same Article, R.A. 6715 restored to supervisory employees the right to join
labor organizations of their own. Article 246 now reads:
22
assist or form separate labor organizations of their own.
Article 246 became Article 245 after then Article 244 was repealed by E.O. 111. Article 246 is
presently Article 245 of the Labor Code.
Indeed, Article 245 of the Labor Code prohibiting managerial employees from joining labor
organizations has a social and historical significance in our labor relations law. This
significance should be considered in deciphering the intent of the framers of the 1987
Constitution vis-a-vis the said Article.
With due respect, I do not subscribe to the view that section 8, Article III of the Constitution
abrogated Article 245 of the Labor Code. A textual analysis of section 8, Article III of the
Constitution will not justify this conclusion. With due respect, the resort by Mr. Justice
Davide to the deliberations of the Constitutional Commission does not suffice. It is generally
recognized that debates and other proceedings in a constitutional convention are of limited
value and are an unsafe guide to the intent of the people. Judge Cooley has stated that:
23
When the inquiry is directed to ascertaining the mischief designed to be remedied, or

the purpose sought to be accomplished by a particular provision, it may be proper to
examine the proceedings of the convention which framed the instrument. Where the
proceedings clearly point out the purpose of the provision, the aid will be valuable
and satisfactory; but where the question is one of abstract meaning, it will be difficult
to derive from this source much reliable assistance in interpretation. Every member of
such a convention acts upon such motives and reasons as influence him personally,
and the motions and debates do not necessarily indicate the purpose of a majority of
a convention in adopting a particular clause. It is quite possible for a particular clause
to appear so clear and unambiguous to the members of the convention as to require
neither discussion nor illustration; and the few remarks made concerning it in the
convention might have a plain tendency to lead directly away from the meaning in the
minds of the majority. It is equally possible for a part of the members to accept a
clause in one sense and a part in another. And even if we were certain we had
attained to the meaning of the convention, it is by no means to be allowed a
controlling force, especially if that meaning appears not to be the one which the
words would most naturally and obviously convey. For as the constitution does not
derive its force from the convention which framed, but from the people who ratified it,
the intent to be arrived at is that of the people, and it is not to be supposed that they
have looked for any dark and abstruse meaning in the words employed, but rather
that they have accepted them in the sense most obvious to the common
understanding, and ratified the instrument in the belief that was the sense designed to
be conveyed. 24
It is for this reason that proceedings of constitutional conventions are less conclusive of the
proper construction of the instrument than are legislative proceedings of the proper
construction of the statute. In the statutes, it is the intent of the legislature that is being
25
sought, while in constitutions, it is the intent of the people that is being ascertained through
the discussions and deliberations of their representatives. The proper interpretation of
26
constitutional provisions depends more on how it was understood by the people adopting it
than in the framers' understanding thereof. 27
Thus, debates and proceedings of the constitutional convention are never of binding force.
They may be valuable but are not necessarily decisive. They may shed a useful light upon
28
the purpose sought to be accomplished or upon the meaning attached to the words
employed. And the courts are free to avail themselves of any light that may be derived from
such sources, but they are not bound to adopt it as the sole ground of their decision. 29
Clearly then, a statute cannot be declared void on the sole ground that it is repugnant to a
supposed intent or spirit declared in constitutional convention proceedings.
D. Freedom of Association
The right of association flows from freedom of expression. Like the right of expression, the
30
exercise of the right of association is not absolute. It is subject to certain limitations.
Article 243 of the Labor Code reiterates the right of association of people in the labor sector.
Article 243 provides:
Art. 243. Coverage of employees' right to self-organization. — All persons employed

in commercial, industrial and agricultural enterprises and in religious, charitable,
medical, or educational institutions whether operating for profit or not, shall have the
right to self-organization and to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.
Article 243 guarantees the right to self-organization and association to "all persons." This
seemingly all-inclusive coverage of "all persons," however, actually admits of exceptions.
Article 244 of the Labor Code mandates that all employees in the civil service, i.e, those not
31
employed in government corporations established under the Corporation Code, may only
form associations but may not collectively bargain on terms and conditions fixed by law. An
employee of a cooperative who is a member and co-owner thereof cannot invoke the right of
collective bargaining and negotiation vis-a-vis the cooperative. An owner cannot bargain
32
with himself or his co-owners. Employees in foreign embassies or consulates or in foreign

33
international organizations granted international immunities are also excluded from the right
to form labor organizations. International organizations are organized mainly as a means
34
for conducting general international business in which the member-states have an interest
and the immunities granted them shield their affairs from political pressure or control by the
host country and assure the unimpeded performance of their functions. 35
Confidential employees have also been denied the right to form labor-organizations.
Confidential employees do not constitute a distinct category for purposes of organizational
right. Confidentiality may attach to a managerial or non-managerial position. We have,
however, excluded confidential employees from joining labor organizations following the
rationale behind the disqualification of managerial employees in Article 245. In the case
of National Association of Trade Unions-Republic Planters' Bank Supervisors Chapter
v. Torres, we held:
36
In the collective bargaining process, managerial employees are supposed to be on the

side of the employer, to act as its representatives, and to see to it that its interests are
well protected. The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation can become
one-sided. It is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Article 245 as if the
disqualification of confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves, then
they could be governed by their own motives rather than the interest of the
employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals
who are supposed to act "in the interest of" the employers. It is not farfetched that in
the course of collective bargaining, they might jeopardize that interest which they are
duty-bound to protect. 37
E. The disqualification extends only to labor organizations.
It must be noted that Article 245 of the Labor Code deprives managerial employees of their
right to join "labor organizations." A labor organization is defined under the Labor Code as:
Art. 212 (g). "Labor organization" means any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with
the employer concerning terms and conditions of employment.
A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right
given to a labor organization once it registers itself with the Department of Labor and
Employment (DOLE). Dealing with the employer, on the other hand, is a generic description
of interaction between employer and employees concerning grievances, wages, work hours
and other terms and conditions of employment, even if the employees' group is not
registered with the DOLE. Any labor organization which may or may not be a union may
38
deal with the employer. This explains why a workers' Organization does not always have to
be a labor union and why employer-employee collective interactions are not always collective
bargaining. 39
In the instant case, it may be argued that managerial employees' labor organization will
merely "deal with the employer concerning terms and conditions of employment" especially
when top management is composed of aliens, following the circumstances in the Caltex
case.
Although the labor organization may exist wholly for the purpose of dealing with the
employer concerning terms and conditions of employment, there is no prohibition in the
Labor Code for it to become a legitimate labor organization and engage in collective
bargaining. Once a labor organization registers with the DOLE and becomes legitimate, it is
entitled to the rights accorded under Articles 242 and 263 (b) of the Labor Code. And these
include the right to strike and picket.
Notably, however, Article 245 does not absolutely disqualify managerial employees from
exercising their right of association. What it prohibits is merely the right to join labor
organizations. Managerial employees may form associations or organizations so long as they
are not labor organizations. The freedom of association guaranteed under the Constitution
remains and has not been totally abrogated by Article 245.
To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing
industrial life and will open the floodgates to unionization at all levels of the industrial
hierarchy. Such a ruling will wreak havoc on the existing set-up between management and
labor. If all managerial employees will be allowed to unionize, then all who are in the payroll
of the company, starting from the president, vice-president, general managers and everyone,
with the exception of the directors, may go on strike or picket the
employer. Company officers will join forces with the supervisors and rank-and-file.
40
Management and labor will become a solid phalanx with bargaining rights that could be
enforced against the owner of the company. The basic opposing forces in the industry will
41
not be management and labor but the operating group on the one hand and the stockholder
and bondholder group on the other. The industrial problem defined in the Labor Code comes
down to a contest over a fair division of the gross receipts of industry between these two
groups. And this will certainly bring ill-effects on our economy.
42
The framers of the Constitution could not have intended a major upheaval of our labor and
socio-economic systems. Their intent cannot be made to override substantial policy
considerations and create absurd or impossible situations. A constitution must be viewed
43
as a continuously operative charter of government. It must not be interpreted as demanding

the impossible or the impracticable; or as effecting the unreasonable or absurd. Courts
44
should always endeavour to give such interpretation that would make the constitutional
provision and the statute consistent with reason, justice and the public interest. 45
I vote to dismiss the petition.
The pivotal issues raised in the case at bar, aptly stated by the Office of the Solicitor General,
are:
(1) Whether or not public respondent, Undersecretary of the Department of Labor and
Employment ("DOLE") Bienvenido E. Laguesma, gravely abused his discretion in
categorizing the members of petitioner union to be managerial employees and thus ineligible
to form or join labor organizations; and
(2) Whether or not the provision of Article 245 of the Labor Code, disqualifying managerial
employees from joining, assisting or forming any labor organization, violates Section 8,
Article III, of the 1987 Constitution, which expresses that "(t)he right of the people, including
those employed in public and private sectors to form unions, associations or societies for
purposes not contrary to law shall not be abridged."
The case originated from a petition for direct certification or certification election among
route managers/supervisory employees of Pepsi-Cola Products Phils., Inc. ("Pepsi"), filed by
the United Pepsi-Cola Supervisory Union ("Union"), claiming to be a legitimate labor
organization duly registered with the Department of Labor and Employment under
Registration Certificate No. NCR-UR-3-1421-95. Pepsi opposed the petition on the thesis that
the case was no more than a mere duplication of a previous petition for direct
certification filed by the same route managers through the Pepsi-Cola Employees
1
Association (PCEA-Supervisory) which petition had already been denied by Undersecretary

Laguesma. The holding reiterated a prior decision in Workers Alliance Trade Unions
("WATU") vs. Pepsi-Cola Products Phils., Inc., that route managers were managerial
2
employees.
In its decision, dated 05 May 1995, Med-Arbiter Brigida C. Fadrigon dismissed for lack of
merit the petition of the Union, stating that the issue on the proper classification and status
of route managers had already been ruled with finality in the previous decisions,
aforementioned, rendered by DOLE.
The union appealed the decision. In his resolution of 31 August 1995, Undersecretary
Laguesma dismissed the appeal, saying that there was no compelling reason to abandon the
ruling in the two old cases theretofore decided by DOLE. In his order of 22 September 1995,
Undersecretary Laguesma denied the Union's motion for reconsideration.
The Union went to this Court, via a petition for certiorari, assailing the cancellation of its
certificate of registration. The Court, after considering the petition and the comments thereon
filed by both public and private respondents, as well as the consolidated reply of petitioner,
dismissed the case in its resolution of 08 July 1996 on the premise that no grave abuse of
discretion had been committed by public respondent.
Undaunted, the Union moved, with leave, for the reconsideration of the dismissal of its
petition by the Court En Banc. In its resolution of 16 June 1997, the case was referred to the
Court En Banc en consulta with the movant's invocation of unconstitutionality of Article 245
of the Labor Code vis-a-vis Section 8, Article III, of the 1987 Constitution.
There is merit, in my view, in petitioner's motion for reconsideration but not on constitutional
grounds.
There are, in the hierarchy of management, those who fall below the level of key officers of
an enterprise whose terms and conditions of employment can well be, indeed are not
infrequently, provided for in collective bargaining agreements. To this group belong the
supervisory employees. The "managerial employees," upon the other hand, and relating the
matter particularly to the Labor Code, are those "vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees" as distinguished from the supervisory employees
whose duties in these areas are so designed as to verily be implementary to the policies or
rules and regulations already outstanding and priorly taken up and passed upon by
management. The managerial level is the source, as well as prescribes the compliance, of
broad mandates which, in the field of labor relations, are to be carried out through the next
rank of employees charged with actually seeing to the specific personnel action required. In
fine, the real authority, such as in hiring or firing of employees, comes from management and
exercised by means of instructions, given in general terms, by the "managerial employees;"
the supervisory employees, although ostensibly holding that power, in truth, however, only
act in obedience to the directives handed down to them. The latter unit, unlike the former,
cannot be considered the alter ego of the owner of enterprise.
The duties and responsibilities of the members of petitioner union, shown by their "job
description" below —
PCPPI
RM's JOB DESCRIPTION
A. GENERAL/OVERALL OBJECTIVE OF THIS POSITION
To contribute to the growth and profitability of PCPPI via well-selected,

trained and motivated Route Sales Team who sell, collect and
merchandise, following the Pepsi Way, and consistent with Company
policies and procedures as well as the corporate vision of Customer
Satisfaction.
B. SPECIFIC JOB DESCRIPTION:
KEY RESULT AREAS STANDARD OR PERFORMANCE
SALES VOLUME *100% Vs. NRC Target
_____% NTG
DISTRIBUTION * Product Availability
70% Pepsi
80% Seven-Up
40% Mirinda
65% Mt. Dew
5% Out of Stock
ACCOUNTS RECEIVABLE 65% Current (Incl. Legal & Col.)
MANAGEMENT 80:20 Cash to Credit Ratio
DSO — assigned Std. to Division
by the District
ASSET MANAGEMENT 30 cases for ice-coolers
80 cases for electric coolers
BLOWAGA on Division Vehicles
60 cases on Rolling/Permanent
Kiosks
TRADE DEVELOPMENT 100% Buying Customers Based
on master list that bought once
5 months payback on concessions
4 CED's/Rte.
EXPENSE MANAGEMENT a). 5% Absentism rate Excl. VL
b). 280 cases/route/day
c). 15% cost-to-sales ratio
ROUTE MANAGEMENT 3 Days on RR/Wk
— Days on BC-SC- Financial &
Co. Assets
— Days on TD
75% Load Factor
18 Productive Calls
CUSTOMER SATISFACTION Customer Complaint attended to within the

next working day
HUMAN RESOURCE 5% Absentism Excl. VL
MANAGEMENT (approved) 3 Documented RR/
Week using SLM's Training Log
ADMINISTRATIVE — Complete, timely and accurate
MANAGEMENT reports.
PCPPI
RM's BASIC DAILY ACTIVITIES
A. AT THE SALES OFFICE
1. PRACTICES BLOWAGA ON SERVICE VEHICLE (AT HOME)

2. REPORTS FOR WORK ON OR BEFORE 6:15 A.M.
3. REPORTS IN CLEAN AND NEAT UNIFORM (GOOD GROOMING)
4. DAILY BRIEFING WITH THE DM
5. CONDUCTS SKILLS ENHANCEMENT OR HUDDLES WITH RST's
a). ATTENDANCE/GROOMING
b). OPERATIONAL DIRECTIONS & PRIORITIES
c). ANNOUNCEMENT
6. RM's PRESENCE DURING CHECK-OUT
a). SLM PRACTICES BLOWAGA ON ROUTE TRUCK
b). PRIVATE COUNSELING WITH RST (AM & PM IF

NECESSARY)
c). PROPER HANDLING OF SELLING/MDSG. MATERIALS
d). YESTERDAY's FINAL SETTLEMENT REVIEW
7. UPDATE REPORTS, MONITORS, DOCUMENTS & TELEPHONE

CONMATION
8. ATTENDS TO PRODUCT COMPLAINTS (GFM)
9. CONDUCTS ADMINISTRATIVE INVESTIGATION OR ATTENDS DM's

MEETING (on Saturdays)
B. FIELD WORK
ROUTE RIDE
1. CHECKS SLMS. TRAINING LOG (PROGRESS & DEV'T.)
2. SALESMAN's CPC
3. ROUTE COVERAGE EVALUATION
4. LOAD FACTOR
5. SALESMAN's ROUTING SYSTEM EVALUATION
BC/SC
1. FINANCIAL & ASSET VERIFICATION, CONFIRMATION & AUDIT
2. BACKCHECKS FIRST 5 CUSTOMERS SERVED FOR THE DAY
a). MERCHANDISING
b). SERVICING
c). RM's TERRITORY FAMILIARITY
d). KEY ACCOUNTS GOODWILL
TRADE DEVELOPMENT
1. PREPARATION PRIOR TO CALL
2. ACTUAL CALL
3. POST CALL ANALYSIS
(HOW DID I FARE? WHY? WHAT ACTIONS TO TAKE)
4. FOLLOW-UP ACTION
C. AT CLOSE OF DAY
1. MAINTAINS & UPDATES CORRECT & ACCURATE RECORDS &

REPORTS
2. RM-SLM DEBRIEFING
3. SLR DISCUSSION (BASED ON A.M. SLR)
4. COORDINATES WITH DM ON PLANS & PROGRAMS
5. PREPARATIONS FOR NEXT DAY's ACTIVITIES 3
— convey no more than those that are aptly consigned to the "supervisory" group by the
relatively small unit of "managerial" employees. Certain portions of a pamphlet, the so-called
"Route Manager Position Description" referred to by Mr. Justice Vicente Mendoza, in
his ponencia, hereunder reproduced for easy reference, thus —
A. BASIC PURPOSE
achieve this objective through the skillful management of your job and
the management of your people.
these functions — managing your job and managing your people —
you are accountable to your District Manager for the execution and

account objectives.


merchandising objectives are achieved in
all outlets.
1.1.5 Maintain and improve productivity of


promotions.

goodwill.


1.2 Administration


basis.

include but not limited to shakedown;
route shortage; progressive discipline;
sorting; spoilages; credit/collection;
accident; attendance.



merchandising techniques of the
2.2 Code of Conduct

unquestioned business ethics. —
offer nothing at all that can approximate the authority and functions of those who actually
and genuinely hold the reins of management.
I submit, with due respect, that the members of petitioning union, not really being
"managerial employees" in the true sense of the term, are not disqualified from forming or
joining labor organizations under Article 245 of the Labor Code.
I shall now briefly touch base on the constitutional question raised by the parties on Article
The Constitution acknowledges "the right of the people, including those employed in the
public and private sectors, to form unions, associations or societies for purposes not
contrary to law . . . ." Perforce, petitioner claims, that part of Article 245 of the Labor Code
4 5
which states: "Managerial employees are not eligible to join, assist or form any labor
organization," being in direct collision with the Constitutional provision, must now be
declared abrogated in the law.
Frankly, I do not see such a "direct collision." The Constitution did not obviously grant a
limitless right "to form unions, associations or societies" for it has clearly seen it fit to
subject its exercise to possible legislative judgment such as may be appropriate or, to put it
in the language of the Constitution itself, to "purposes not contrary to law."
Freedom of association, like freedom of expression, truly occupies a choice position in the
hierarchy of constitutional values. Even while the Constitution itself recognizes the State's
prerogative to qualify this right, heretofore discussed, any limitation, nevertheless, must still
be predicated on the existence of a substantive evil sought to be addressed. Indeed, in the
6
exercise of police power, the State may, by law, prescribe proscriptions, provided reasonable
and legitimate of course, against even the most basic rights of individuals.
The restriction embodied in Article 245 of the Labor Code is not without proper rationale.
Concededly, the prohibition to form labor organizations on the part of managerial employees
narrows down their freedom of association. The very nature of managerial functions,
however, should preclude those who exercise them from taking a position adverse to the
interest they are bound to serve and protect. The mere opportunity to undermine that interest
can validly be restrained. To say that the right of managerial employees to form a "labor
organization" within the context and ambit of the Labor Code should be deemed totally
separable from the right to bargain collectively is not justified by related provisions of the
Code. For instance —
Art. 212. Definitions. — . . .

7
(g) "Labor organization" means any union or association of employees which exists
in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment.
x x x x x x x x x
(m) "Managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
if the exercise of such authority is not merely routinely or clerical in nature but
Art. 263. . . .
(b) Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of legitimate
labor organizations to strike and picket and of employers to lockout, consistent with
the national interest, shall continue to be recognized and respected.
The maxim "ut res magis quam pereat" requires not merely that a statute should be given
such a consequence as to be deemed whole but that each of its express provisions equally
should be given the intended effect.
I find it hard to believe that the fundamental law could have envisioned the use by managerial
employees of coercive means against their own employers over matters entrusted by the
latter to the former. Whenever trust and confidence is a major aspect of any relationship, a
conflict of interest on the part of the person to whom that trust and confidence is reposed
must be avoided and when, unfortunately, it does still arise its containment can rightly be
decreed.
Article 245 of the Labor Code indeed aligns itself to the Corporation Code, the basic law on
by far the most commonly used business vehicle — the corporation — which prescribes the
tenure of office, as well as the duties and functions, including terms of employment
(governed in most part by the Articles of Incorporation, the By-laws of the Corporation, or
resolutions of the Board of Directors), of corporate officers for both the statutory
officers, i.e., the president, the treasurer and the corporate secretary, and the non-statutory
officers, i.e., those who occupy positions created by the corporate by-laws who are deemed
essential for effective management of the enterprise. I cannot imagine these officers as being
legally and morally capable of associating themselves into a labor organization and asserting
collective bargaining rights against the very entity in whose behalf they act and are
supposed to act.
I submit, accordingly, that, firstly, the members of petitioner union or the so-called route
managers, being no more than supervisory employees, can lawfully organize themselves into
a labor union within the meaning of the Labor Code, and that, secondly, the questioned
provision of Article 245 of the Labor Code has not been revoked by the 1987 Constitution.
WHEREFORE, I vote, given all the foregoing, for the reversal of the resolution of 31 August
1995, and the order of 22 September 1995, of public respondent.
Kapunan, Panganiban and Quisumbing, JJ., concur and dissent.
Footnotes
1 JAMES A. F. STONER & CHARLES WANKEL, MANAGEMENT 11 (3rd. ed.,

1987).
2 Id. (emphasis added).
3 Atlantic Gulf & Pac. Co. of Manila v. CIR, 113 Phil. 650 (1961).
4 Record, pp. 53-54.
5 177 SCRA 93 (1989).
6 Id., p. 100.
7 Nasipit Lumber Co. v. National Labor Relations Commission, 177 SCRA 93,
100 (1989).
8 99 Phil. 497 (1956).
9 G.R. No. 108996, Feb. 20, 1998.
10 Nasipit Lumber Co. v. National Labor Relations Commission, supra note 7.
11 B.F. Goodrich Philippines, Inc. v. B.F. Goodrich (Marikina Factory)

Confidential and Salaries Employees Union-NATU, 49 SCRA 532 (1973).
12 DOLE Record, pp. 144-145.
13 Rollo, p. 46 (emphasis in original).
14 Record, pp. 133-141.
15 The rationale for excluding supervisors in the United States is given in the
Report of the Committee on Education and Labor of the U.S. House of
Representatives, quoted in NLRB v. Bell Aerospace Co., 416 U.S. 267, 281, n.
11, 40 L.Ed.2d 134, 147, n. 11 (1974), thus:
Supervisors are management people. They have distinguished themselves in

their work. They have demonstrated their ability to take care of themselves
without depending upon the pressure of collective action. No one forced them
to become supervisors. They abandoned the "collective security" of the rank
and file voluntarily, because they believed the opportunities thus opened to
them to be more valuable to them than such "security." It seems wrong, and it
is wrong, to subject people of this kind, who have demonstrated their initiative,
their ambition and their ability to get ahead, to the leveling processes of
seniority, uniformity and standardization that the Supreme Court recognizes
as being fundamental principles of unionism. (J.I. Case Co. v. National Labor
Relations Board, 321 U.S. 332, 88 L.Ed. 762, 64 S. Ct. 576 (1944).) It is wrong for
the foremen, for it discourages the things in them that made them foremen in
the first place. For the same reason, that it discourages those best qualified to
get ahead, it is wrong for industry, and particularly for the future strength and
productivity of our country.
16 R.A. No. 875 (1953), §2(k).
17 Id., §3.
18 E.g., Filoil Refinery Corp. v. Filoil Supervisory and Confidential Employees

Association, 6 SCRA 522 (1972); Kapisanan ng mga Manggagawa sa Manila
Railroad Co. v. CIR, 106 Phil 607 (1959).
19 47 SCRA 112 (1972) (res. on motion for reconsideration, per Fernando, J.).
20 47 SCRA at 115-117.
21 44 SCRA 350, 363, n. 3 (1972) (per Villamor, J.) (emphasis added).
22 LABOR CODE, ART. 212(m).

23 1 RECORD OF THE CONSTITUTIONAL COMMISSION 761 (Session of July
18, 1986).
24 Id. (emphasis added).
25 Id., p. 762 (emphasis added).
26 Id. at. 761.
27 Ibid.
28 THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A

COMMENTARY 340-341 (1996).
29 LABOR CODE, ART. 245, as amended by R.A. No. 6715, §18.
30 2 CESARIO A. AZUCENA, THE LABOR CODE WITH COMMENTS AND

CASES 172-173 (1996).
31 210 SCRA 339 (1992).
32 Id. at 347-348.
1 I Record of the Constitutional Commission, 672-673.
2 I Record of the Constitutional Commission, 675.
3 I Record of the Constitutional Commission, 762. See also JOAQUIN G.

BERNAS, THE INTENT OF THE 1986 CONSTITUTION WRITERS 188-189 (1995
ed.).
4 V Record of the Constitutional Commission, 717-718.
5 83 O.G. No. 7, 16 February 1987, 577-579.
6 Entitled An Act to Extend Protection to Labor, Strengthen the Constitutional

Rights of Workers to Self-Organization, Collective Bargaining and Peaceful
Concerted Activities, Foster Industrial Peace and Harmony, Promote the
Preferential Use of Voluntary Modes of Setting Labor Disputes, and
Reorganize the National Labor Relations Commission, Amending for These
Purposes Certain Provisions of Presidential Decree No. 442, as Amended,
Otherwise Known as The Labor Code of the Philippines, Appropriating Funds
Therefor, and For Other Purposes.
7 Section 18, R.A. No. 6715.
8 As well as the original Article 245 thereof.

9 The second paragraph, Section 3, Article XIII, Constitution provides, in part:
It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law.
1 Franklin Baker Co. v. Trajano, 157 SCRA 416, 422 [1988].
2 48 Am Jur 2d, "Labor and Labor Relations," Sec. 1 [1994].
3 Id.
4 Id., Sec. 2.
5 Id., Sec. 3.
6 International Ladies' Garment Workers' Union v. N.L.R.B., 339 F. 2d 116, 123

[1964].
7 This was declared by the National Labor Relations Board in 1945 and upheld
by the U.S. Supreme Court in Packard Motor Co. v. N.L.R.B., 330 U.S. 485, 91
L.Ed. 1040 [1947] — See also Footnote 2 in L.A. Young Spring & Wire
Corporation v. N.L.R.B., 163 F.2d 905, 906-907 [1947].
8 International Ladies' Garment Workers' Union v. N.L.R.B., 339 F.2d 116, 123
[1964] citing Ford Motor Co., 66 N.L.R.B. 1317, 1322 [1946] and Palace Laundry
Dry Cleaning Corp., 75 N.L.R.B. 320, 323 [1947]; also cited in 51 C.J.S. "Labor
Relations," Sec. 41.
9 International Ladies' Garment Workers' Union v. N.L.R.B., supra, at 122.
10 48 Am Jur 2d, "Labor and Labor Relations," Secs. 1048, 1113 [1994 ed.].
11 Id., at Sec. 1048.
12 R.A. 873.
13 Azucena, The Labor Code with Comments and Cases, vol. 1, p. 16 [1996];
Pascual, Labor Relations Law, p. 13 [1986].
14 Azucena, supra.
15 Atlantic Gulf & Pacific Co., 33 Phil. 425, 428-429 [1916]; Boy Scouts of the
Philippines v. Araos, 102 Phil. 1080 [1958].
16 Filoil Refinery Corporation v. Filoil Supervisory & Confidential Employees

Association, 46 SCRA 512, 519 [1972].
17 Caltex Filipino Managers and Supervisors Association v. Court of Industrial
Relations, 47 SCRA 112, 115 [1972].
18 Section 11, Rule II, Book V of the Omnibus Rules Implementing the Labor
Code provided:
Sec. 11. All existing supervisory unions and unions of security guards
shall, upon effectivity of the Code, cease to operate as such and their
registration certificates be deemed automatically canceled. . . .
Members of supervisory unions who do not fall within the definition of
managerial employees shall become eligible to join assist the rank-and-
file labor organization, and if none exists, to form or assist in the
forming of such rank-and-file organizations.
19 144 SCRA 628, 634 [1986].
20 Golden Farms, Inc. v. Calleja, 175 SCRA 471, 477 [1989]; Bulletin Publishing
Corp. v. Sanchez, 144 SCRA 628, 635 [1986].
21 National Association of Trade Unions-Republic Planters' Bank Supervisors

Chapter v. Torres, 239 SCRA 546, 559 [1994].
22 Azucena, supra, at 129-132.
23 Gonzales, Philippine Constitutional Law, p. 30 [1969].
24 Cooley, Treatise on Constitutional Limitations, vol. 1, pp. 142-143 [1927];

Also cited in Willoughby, The Constitutional Law of the United States, Sec. 32,
pp. 54-55, vol. 1 [1929].
25 Vera v. Avelino, 77 SCRA 192, 215 [1946].
26 Id.
27 Civil Liberties Union v. Executive Secretary, 194 SCRA 317, 337-338

[1991]; See also J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31
SCRA 413, 425 [1970].
28 J.M. Tuason & Co., Inc. v. Land Tenure Administration, supra; Aglipay v.

Ruiz, 64 Phil. 201 [1937].
29 Debates and proceedings in the constitutional convention.
"are of value as showing the views of the individual members, and as

indicating the reasons for their votes, but they give us no light as to the
views of the large majority who did not talk, much less of the mass of
our fellow citizens whose votes at the polls gave that instrument the
force of the fundamental law. We think it safer to construe the
Constitution from what appears upon its face." (Commonwealth v.
Balph, 111 Pa. 365, 3 Atl. 220, cited in Black, Handbook on the
Construction and Interpretation of the Laws, Sec. 44, p. 122 [1911]).
30 Cruz, Constitutional Law, p. 227 [1991].
31 See also E.O. 180.
32 San Jose Electric Cooperative, Inc. v. Ministry of Labor, 173 SCRA 697, 703
[1989]; Benguet Electric Cooperative, Inc. v. Ferrer-Calleja, 180 SCRA 740, 745
[1989].
Member-employees of a cooperative may, however, withdraw as members of

the cooperative in order to join a labor union (Central Negros Electric Corp. v.
Sec. of Labor, 201 SCRA 584, 591 [1991].
33 Id.
34 International Catholic Migration Commission v. Calleja, 190 SCRA 130, 143

[1990].
35 Id.
36 239 SCRA 546 [1994].
37 at 551.
38 Azucena, The Labor Code with Comments and Cases, vol. 2, p. 127 [1996];
Pascual, Labor Relations Law, pp. 35-36 [1986].
39 Id.
40 Dissenting opinion of Justice Douglas in Packard Motor Co. v. N.L.R.B., 330

U.S. 492, 91 L ed. 1040, 1052 [1946]. This dissent became one of the bases for
the passage of the LMRA (Taft-Hartley Act) which abolished the right of
supervisors to form unions (Footnote 2, L.A. Young Spring & Wire Corp. v.
N.L.R.B., 163 F. 2d 905, 906-907 [1947].
41 Id.
42 Id.
43 Pritchard v. Republic, 81 Phil. 244, 252 [1948].
44 Civil Liberties Union v. Executive Secretary, 194 SCRA 317, 332 [1991].
45 Co Kim Cham v. Valdez Tan Keh, 75 Phil. 113, 132 [1945]; See also Agpalo,
Statutory Construction, pp. 119-120 [1995]; Black, Handbook on the
Construction and Interpretation of the Laws, Sec. 44, p. 122 [1911].

1 In Re: Petition for Direct Certification and/or Certification Election — Route
Managers/Supervisory Employees of the Pepsi-Cola Products Phils., Inc., OS-
A-3-71-92; NCR-OD-A-91-10-055.
2 OS-MA-A-10-318-91; ROX Case No. R-1000-9002-Ru-007.
3 Rollo, pp. 68-69.
4 Article III, Section 8, 1987 Constitution provides:
Sec. 8. The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
5 Art. 245. — Ineligibility of managerial employees to join any labor

organization; right of supervisory employees. — Managerial employees are not
eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate organizations of their own.
6 See People vs. Ferrer, 48 SCRA 382.
7 As amended by Sec. 3, RA 6715.
THIRD DIVISION
September 8, 2015
G.R. No. 193798
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner,

vs.
ILOCOS PROFESSIONAL AND TECHNICAL EMPLOYESS UNION (IPTEU), Respondent.
DECISION
PERALTA, J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure (Rules) seeks to reverse and set aside the March 17, 2010 Decision and September 16,
1
2010 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 104043, which affirmed the May 6,
2
2008 Resolution of the Secretary of Labor and Employment (SOLE) dismissing petitioner's appeal
3
that assailed the Decision (On the Challenged Voters ) and Proclamation of the Winner, both dated
4 5
October 22, 2007, of the Mediator-Arbiter.

Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation duly organized and
operating under the Philippine laws. It is primarily engaged in the beverage business, which includes
the manufacture of carbonated soft drinks. On the other hand, respondent Ilocos Professional and
Technical Employees Union (IPTEU) is a registered independent labor organization with address at
CCBPI Ilocos Plant in Barangay Catuguing, San Nicolas, Ilocos Norte.
On July 9, 2007, IPTEU filed a verified Petition for certification election seeking to represent a
6
bargaining unit consisting of approximately twenty-two (22) rank-and-file professional and technical
employees of CCBPI Ilocos Norte Plant. CCBPI prayed for the denial and dismissal of the petition,
arguing that the Sales Logistics Coordinator and Maintenance Foreman are supervisory employees,
while the eight (8) Financial Analysts, five (5) Quality Assurance Specialists, Maintenance Manager
Secretary, Trade Promotions and Merchandising Assistant (TPMA), Trade Asset Controller and
Maintenance Coordinator (TACMC), Sales Information Analyst (SIA), Sales Logistics Assistant,
Product Supply Coordinator, Buyer, Inventory Planner, and Inventory Analyst are confidential
employees; hence, ineligible for inclusion as members of IPTEU. It also sought to cancel and revoke
7
the registration of IPTEU for failure to comply with the twenty percent (20%) membership
requirement based on all the supposed employees in the bargaining unit it seeks to operate.
A preliminary hearing of the petition was scheduled and held on July 19, 2007. The possibility of
voluntary recognition or consent election was not acceded to by CCBPI.
Convinced that the union members are rank-and-file employees and not occupying positions that are
supervisory or confidential in nature, Mediator-Arbiter Florence Marie A. Gacad-Ulep granted
IPTEU’S petition. The dispositive portion of the August 23, 2007 Decision ordered:
8
WHEREFORE, premises considered, the Petition is GRANTED. The bargaining unit shall be all the
rank-and-file Exempt (Professional and Technical) Workers of CCBPI who are now excluded from
the existing bargaining units of the Coca-Cola Bottlers Philippines, Inc. – Ilocos Plant. The choices in
the election shall be:
ILOCOS PROFESSIONAL AND TECHNICAL

[EMPLOYEES] UNION (IPTEU)
No Union
The Labor Relations Division of this office is hereby directed to conduct the Pre-election
Conference(s) within the periods set by law. The CCBPI is hereby ordered to submit, not later than
the date of the first pre-election conference, its Certified List of Exempt (Professional and Technical)
rankand- file workers, or in its absence, the employee payrolls from May to June 2007. In case
Management fails or refuses to submit the same, the Union’s list shall be allowed, as provided for
under the Rules.
SO ORDERED. 9
On September 3, 2007, CCBPI filed an appeal before the SOLE. The Mediator-Arbiter
10
acknowledged having received the Memorandum of Appeal but informed that, pursuant to the
Implementing Rules and Regulations of the Labor Code, as amended, "[the] order granting
the conduct of a certification election in an unorganized establishment shall not be subject to appeal.
Any issue arising therefrom may be raised by means of protest on the conduct and results of the
certification election." On September 5, 2007, CCBPI then filed an Urgent Motion to Suspend
11
Proceedings, alleging that the notice issued by the Assistant Regional Director for the conduct of
12
pre-election conference is premature since the decision of the Mediator-Arbiter is not yet final and
executory and that the Mediator-Arbiter already lost jurisdiction over the case with the filing of an
appeal. Two days after, CCBPI filed a Manifestation, stating that its participation in the pre-election
13
conference, certification election, and other proceedings is not a waiver, withdrawal or abandonment
of the pending appeal and motion to suspend proceedings.
In the Pre-election Conference held on September 10, 2007, CCBPI and IPTEU mutually agreed to
conduct the certification election on September 21, 2007. On election day, only sixteen (16) of the
twenty-two (22) employees in the IPTEU list voted. However, no votes were canvassed. CCBPI filed
and registered a Protest14 questioning the conduct and mechanics of the election and a Challenge
to Votes15 on the ground that the voters are supervisory and confidential employees.
By agreement, the parties met on September 26, 2007 for the opening and counting of the
challenged votes. On said date, CCBPI filed a motion for inhibition, which the Mediator-Arbiter
verbally denied on the grounds that it was not verified and would cause undue delay on the
proceedings as there are no other Mediators-Arbiters in the Region. The parties were informed that
their agreement to have the ballots opened could not bind the Mediator-Arbiter. Instead, they were
directed to submit additional evidence that would aid in the resolution of the challenged votes.
On October 22, 2007, the Mediator-Arbiter denied CCBPI’s challenge to the 16 votes. She found that
the voters are rank-and-file employees holding positions that are not confidential in nature, and who
are not, or used to be, members of Ilocos Monthlies Union (IMU) due to the reclassification of their
positions by CCBPI and have been excluded from the CBA entered into by IMU and CCBPI from
1997 to 2005. Consequently, the challenged votes were opened and canvassed. After garnering 14
out of the 16 votes cast, IPTEU was proclaimed as the sole and exclusive bargaining agent of the
rank-and-file exempt workers in CCBPI Ilocos Norte Plant.
CCBPI elevated the case to the SOLE, raising the following grounds:
1. The Honorable public [appellee] erred in disregarding the fact that there is already an
existing bargaining representative of the rank-andfile professional and technical employees
at the Ilocos Plant of appellant, namely, the Ilocos Monthlies Union (IMU) [to] which the
sixteen (16) challenged voters should be members as long as they are not disqualified by
law [for] being confidential employees.
2. The Honorable public appellee erred in denying the challenge to the sixteen (16) actual
voters, and subsequently declaring that private appellee is the sole and exclusive
[bargaining] agent of the rank-andfile exempt employees.
3. The Honorable public appellee erred in disregarding the fact that there is a pending earlier
appeal filed by appellant with the Honorable Secretary of Labor, and so the Regional Office
No. 1 of the Department of Labor and Employment lost jurisdiction over the case including
the certification election conducted by the Election Officer.
4. The Honorable public appellee erred in disregarding the fact that there is a pending
Motion to Suspend Proceedings filed by appellant with the Department of Labor and
Employment, Regional Office No. 1, San Fernando City, La Union[,] due to the pendency of
its appeal with the Honorable Secretary of Labor, and the same is not yet resolved.
5. The Honorable public appellee erred in disregarding the fact that there is a need to
suspend the conduct of election and other proceedings to await for the final result of the
earlier appeal made by herein appellant.
6. The Honorable public appellee erred in not declaring the certification election on
September 21, 2007 null and void. 16
On May 6, 2008, the appeal of CCBPI was denied. The SOLE held that, as shown by the
certification of the IMU President and the CBAs forged between CCBPI and IMU from 1997 to 2007,
the 22 employees sought to be represented by IPTEU are not part of IMU and are excluded from its
CBA coverage; that even if the 16 challenged voters may have access to information which are
confidential from the business standpoint, the exercise of their right to self-organization could not be
defeated because their common functions do not show that there exist a confidential relationship
within the realm of labor relations; and that the order granting the certification election and sustaining
its validity despite the pendency of appeal and motion to suspend is proper in view of Section 17,
Rule VIII of Department Order No. 40, Series of 2003, which states that the order granting the
conduct of a certification election in an unorganized establishment is not subject to appeal and that
any issue arising therefrom may be raised by means of protest on the conduct and results of the
certification election.
Confronted with an adverse ruling, CCBPI filed before the CA a petition for certiorari with prayer for
temporary restraining order and writ of preliminary injunction. It reiterated that:
17
a. There is already an existing and incumbent sole and exclusive bargaining agent in the
bargaining unit which respondent IPTEU seeks to represent, namely, the Ilocos Monthlies
Union (IMU). The bargaining unit which IPTEU seeks to represent is rank-and-file
professional and technical employees which the incumbent union, the IMU, presently
represents.
b. Respondent IPTEU never sought to represent the alleged rank-and-file Exempt

employees because it is clearly indicated in its petition for certification election that it seeks
to represent rank-and-file professional and technical employees only. Its Constitution and
bylaws includes solely and only professional and technical employees of CCBPI-ILOCOS
PLANT to its membership, and nothing more.
c. The sixteen (16) voters are not eligible for Union membership because they are
confidential employees occupying confidential positions.
d. The bargaining unit is organized due to the presence of the IMU, the sole and exclusive
bargaining unit of the rank-and-file professional and technical employees at the Ilocos Plant
of petitioner, and so the appeal of the earlier decision of the respondent Med-Arbiter dated
August 23, 2007 is in order, proper, valid and should have been given due course in
accordance with Sec. 17, Rule [VIII] of the Rules Implementing Book V of the Labor Code.
e. The earlier appeal x x x together with the motion for suspension of the proceedings x x x
filed by petitioner on September 5, 2007 remain unresolved to date, and there is a need to
await for their final resolution before any further action including the certification election
could validly proceed. 18
On March 17, 2010, the Court of Appeals denied the petition. CCBPI filed a motion for
reconsideration, which was also denied in the September 16, 2010 Resolution; hence, this petition.
19
CCBPI contends that the CA Decision and Resolution are based on misapprehension of facts
relative to the proceedings before the Mediator- Arbiter and that its pronouncement consists of
inferences which are manifestly mistaken and without factual/legal basis. It is argued that a petition
for certiorari was filed before the CA because the orders of the SOLE and Mediator-Arbiter were
issued in patent disregard of established facts and existing jurisprudence, thus, tainted with grave
abuse of discretion
1) In considering respondent IPTEU as the sole and exclusive bargaining agent of the purported
rank-and-file exempt employees in the Ilocos Plant; 2) In not declaring the certification election held
on September 21, 2007 improper and void; 3) In disregarding the fact that the Ilocos Monthlies
Union (IMU) is the existing sole bargaining agent of the rank-and-[file] professional and technical
employees at the Ilocos Plant, to which the sixteen (16) challenged voters should be members, if
allowed by law[;] and 4) [In] ruling that the concerned employees should not be prohibited by joining
any union. 20
The petition is unmeritorious.
As proven by the certification of the IMU President as well as the CBAs executed between IMU and
CCBPI, the 22 employees sought to be represented by IPTEU are not IMU members and are not
included in the CBAs due to reclassification of their positions. If these documents were false, the
IMU should have manifested its vigorous opposition. In fact, the Mediator-Arbiter noted:
1âwphi1
The most tenacious resistance to the granting of the Petition as well as the holding of the CE has
been Management. On the other hand, the existing unions at CCBPI, especially the IMU of which
most of the IPTEU members were once part (until they were considered outside the ambit of its
existing bargaining unit) never once opposed the Petition and the Certification election, whether
verbally or in written Opposition.
Between Management and IMU, it is the latter which has more to lose, as the creation of a separate
bargaining unit would reduce the scope of IMU’s bargaining unit. Yet through all these proceedings,
we take note of the substantial moral support that has been extended to the Petitioner by the other
Unions of CCBPI, so much so that, until objected to by Management, they were even willing to be
present during the Certification Election of 21 September 2007. 21
As to whether the 16 voters sought to be excluded from the appropriate bargaining unit are
confidential employees, such query is a question of fact, which is not a proper issue in a petition for
22
review under Rule 45 of the Rules. This holds more true in the present case in view of the
23
consistent findings of the Mediator-Arbiter, the SOLE, and the CA.
We reiterate that:
[T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it
shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective fields. Judicial review of labor cases does not go
so far as to evaluate the sufficiency of evidence on which the labor official's findings rest. It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary, adduced
by the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that
function of the Court to the review or revision of errors of law and not to a second analysis of the
evidence. x x x Thus, absent any showing of whimsical or capricious exercise of judgment, and
unless lack of any basis for the conclusions made by the appellate court be amply demonstrated, we
may not disturb such factual findings. 24
The determination of factual issues is vested in the Mediator-Arbiter and the Department of Labor
and Employment. Pursuant to the doctrine of primary jurisdiction, the Court should refrain from
resolving such controversies unless the case falls under recognized and well-established
exceptions. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the
authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative
body of special competence. 25
In this case, organizational charts, detailed job descriptions, and training programs were presented
by CCBPI before the Mediator-Arbiter, the SOLE, and the CA. Despite these, the Mediator-Arbiter
ruled that employees who encounter or handle trade secrets and financial information are not
automatically classified as confidential employees. It was admitted that the subject employees
encounter and handle financial as well as physical production data and other information which are
considered vital and important from the business operations’ standpoint. Nevertheless, it was opined
that such information is not the kind of information that is relevant to collective bargaining
negotiations and settlement of grievances as would classify them as confidential employees. The
SOLE, which the CA affirmed, likewise held that the questioned voters do not have access to
confidential labor relations information.
We defer to the findings of fact of the Mediator-Arbiter, the SOLE, and the CA. Certainly, access to
vital labor information is the imperative consideration. An employee must assist or act in a
confidential capacity and obtain confidential information relating to labor relations policies. Exposure
to internal business operations of the company is not per se a ground for the exclusion in the
bargaining unit.26
The Court sees no need to belabor the effects of the unresolved notice of appeal and motion to
suspend proceedings filed by CCBPI in September 2007. Suffice it to say that the substantial merits
of the issues raised in said pleadings are the same as what were already brought to and passed
upon by the Mediator-Arbiter, the SOLE, and the CA.
WHEREFORE, premises considered, the petition is DENIED. The March 17, 2010 Decision and
September 16, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 104043, which affirmed
the May 6, 2008 Resolution of the Secretary of Labor and Employment, dismissing petitioner's
appeal that assailed the Decision (On the Challenged Voters) and Proclamation of the Winner, both
dated October 22, 2007, of the Mediator-Arbiter, are hereby AFFIRMED.
SO ORDERED.
DIOSDAO M. PERALTA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR
Associate Justice
Chairperson
MARTIN S. VILLARAMA JR. JOSE PORTUGAL PEREZ*

JOSE CATRAL MENDOZA**

Associate Justice
ATTESTATION

Associate Justice
CERTIFICATION

Chief Justice
Footnotes
* Designated Acting member in lieu of Associate Justice Bienvenido L. Reyes, per Special
Order No. 2112 dated July 16, 2015.
** Designated Acting Member in lieu of Associate Justice Francis H. Jardeleza, per Raffle
dated May 25, 2015.
Penned by Associate Justice Franchito N. Diamante, with Associate Justices Amelita G.

1
Tolentino and Priscilla J. Baltazar-Padilla concurring; rollo, pp. 48-65; 471-488.
2
Rollo, pp. 66-67.
3
Id.atll7-122;490-495.
4
Id. at 123-134; 497-510.
5
Id. at 135; 496.
6
Id. at 141.
7
The positions of Inventory Planner and Inventory Analyst were still vacant at the time of the
filing of the petition for certification election (Rollo, p. 172).
8
Rollo, pp. 173-177.
9
Id. at 177. (Emphasis in the original)
10
Id. at 178-218.
Id. at 219.
11
Id. at 220.
12
Id. at 221-222.
13
Id. at 223-226.
14
Id. at 227-229.
15
Id. at 399-400.
16
Id. at 68-116.
17
Id. at 109-110.
18
Id. at 428-453.
19
Id. at 38.
20
Id. at 128-129; 504-505.

21
x x x Confidential employees are defined as those who (1) assist or act in a confidential
22
capacity, in regard (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations. The two criteria are cumulative, and both must be met if
an employee is to be considered a confidential employee – that is, the confidential
relationship must exist between the employee and his supervisor, and the supervisor must
handle the prescribed responsibilities relating to labor relations. The exclusion from
bargaining units of employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to be
accomplished by the "confidential employee rule."
xxxx
Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence has
extended this prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise privy to sensitive and highly
confidential records. Confidential employees are thus excluded from the rank-and-file
bargaining unit. The rationale for their separate category and disqualification to join
any labor organization is similar to the inhibition for managerial employees, because
if allowed to be affiliated with a union, the latter might not be assured of their loyalty
in view of evident conflict of interests and the union can also become
companydenominated with the presence of managerial employees in the union
membership. Having access to confidential information, confidential employees may
also become the source of undue advantage. Said employees may act as a spy or
spies of either party to a collective bargaining agreement. (San Miguel Foods, Inc. v.
San Miguel Corp. Supervisors and Exempt Union, 670 Phil. 421, 432-434 [2011].
Citations omitted)
Standard Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank,
23
et al., 575 Phil. 306, 312 (2008).
Id. at 315.
24
Negros Oriental Electric Cooperative 1 v. The Sec. of DOLE, 409 Phil. 767, 777 (2001).
25
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., 640 Phil.
26
419, 432 (2010).
Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 146206 August 1, 2011
SAN MIGUEL FOODS, INCORPORATED, Petitioner,

vs.
SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION, Respondent.
DECISION
PERALTA, J.:
The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4
and the exempt employees in the proposed bargaining unit, thereby allowing their participation in the
certification election; the application of the "community or mutuality of interests" test; and the
determination of the employees who belong to the category of confidential employees, are not novel.
In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v.
Laguesma,1 the Court held that even if they handle confidential data regarding technical and internal
business operations, supervisory employees 3 and 4 and the exempt employees of petitioner San
Miguel Foods, Inc. (SMFI) are not to be considered confidential employees, because the same do
not pertain to labor relations, particularly, negotiation and settlement of grievances. Consequently,
they were allowed to form an appropriate bargaining unit for the purpose of collective bargaining.
The Court also declared that the employees belonging to the three different plants of San Miguel
Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having
"community or mutuality of interests," constitute a single bargaining unit. They perform work of the
same nature, receive the same wages and compensation, and most importantly, share a common
stake in concerted activities. It was immaterial that the three plants have different locations as they
did not impede the operations of a single bargaining representative.2
Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment –
National Capital Region (DOLE-NCR) conducted pre-election conferences.3 However, there was a
discrepancy in the list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San
Fernando plant and 33 for the Cabuyao plant, while respondent listed 60 and 82, respectively.4
On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order5 directing Election
Officer Cynthia Tolentino to proceed with the conduct of certification election in accordance with
Section 2, Rule XII of Department Order No. 9.
On September 30, 1998, a certification election was conducted and it yielded the following
results,6 thus:
Cabuyao San Fernando Total

Plant Plant
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes Cast 66 58 124
On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and
Challenge to Voters,7 questioning the eligibility to vote by some of its employees on the grounds that
some employees do not belong to the bargaining unit which respondent seeks to represent or that
there is no existence of employer-employee relationship with petitioner. Specifically, it argued that
certain employees should not be allowed to vote as they are: (1) confidential employees; (2)
employees assigned to the live chicken operations, which are not covered by the bargaining unit; (3)
employees whose job grade is level 4, but are performing managerial work and scheduled to be
promoted; (4) employees who belong to the Barrio Ugong plant; (5) non-SMFI employees; and (6)
employees who are members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing
that the employees in the submitted list are covered by the original petition for certification election
and belong to the bargaining unit it seeks to represent and, likewise, directing petitioner to
substantiate the allegations contained in its Omnibus Objections and Challenge to Voters.8
In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original
petition is the Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2)
it covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in
Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted individual and separate
declarations of the employees whose votes were challenged in the election.9
Adding the results to the number of votes canvassed during the September 30, 1998 certification
election, the final tally showed that: number of eligible voters – 149; number of valid votes cast –
121; number of spoiled ballots - 3; total number of votes cast – 124, with 118 (i.e., 46 + 72 = 118 )
"Yes" votes and 3 "No" votes.10
The Med-Arbiter issued the Resolution11 dated February 17, 1999 directing the parties to appear
before the Election Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the
opening of the segregated ballots. Thereafter, on April 12, 1999, the segregated ballots were
opened, showing that out of the 76 segregated
votes, 72 were cast for "Yes" and 3 for "No," with one "spoiled" ballot.12
Based on the results, the Med-Arbiter issued the Order13 dated April 13, 1999, stating that since the
"Yes" vote received 97% of the valid votes cast, respondent is certified to be the exclusive
bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis.
On appeal, the then Acting DOLE Undersecretary, in the Resolution14 dated July 30, 1999, in OS-A-
2-70-91 (NCR-OD-M-9010-017), affirmed the Order dated April 13, 1999, with modification that
George C. Matias, Alma Maria M. Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be
excluded from the bargaining unit which respondent seeks to represent. She opined that the
challenged voters should be excluded from the bargaining unit, because Matias and Lozano are
members of Magnolia Poultry Processing Plants Monthly Employees Union, while Delos Reyes and
Pajaron are employees of San Miguel Corporation, which is a separate and distinct entity from
petitioner.
Petitioner’s Partial Motion for Reconsideration15 dated August 14, 1999 was denied by the then
Acting DOLE Undersecretary in the Order16 dated August 27, 1999.
In the Decision17 dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v.
The Honorable Office of the Secretary of Labor, Bureau of Labor Relations, and San Miguel
Corporation Supervisors and Exempt Union, the Court of Appeals (CA) affirmed with modification the
Resolution dated July 30, 1999 of the DOLE Undersecretary, stating that those holding the positions
of Human Resource Assistant and Personnel Assistant are excluded from the bargaining unit.
Petitioner’s Motion for Partial Reconsideration18 dated May 23, 2000 was denied by the CA in the
Resolution19 dated November 28, 2000.
Hence, petitioner filed this present petition raising the following issues:
I.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT

EXPANDED THE SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S
RULING IN G.R. NO. 110399.
II.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE -

SPECIFICALLY, THIS COURT'S DEFINITION OF A "CONFIDENTIAL EMPLOYEE" -
WHEN IT RULED FOR THE INCLUSION OF THE "PAYROLL MASTER" POSITION IN THE
BARGAINING UNIT.
III.
WHETHER THIS PETITION IS A "REHASH" OR A "RESURRECTION" OF THE ISSUES

RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE RESPONDENT.
Petitioner contends that with the Court's ruling in G.R. No. 11039920 identifying the specific
employees who can participate in the certification election, i.e., the supervisors (levels 1 to 4) and
exempt employees of San Miguel Poultry Products Plants in Cabuyao, San Fernando, and Otis, the
CA erred in expanding the scope of the bargaining unit so as to include employees who do not
belong to or who are not based in its Cabuyao or San Fernando plants. It also alleges that the
employees of the Cabuyao, San Fernando, and Otis plants of petitioner’s predecessor, San Miguel
Corporation, as stated in G.R. No. 110399, were engaged in "dressed" chicken processing, i.e.,
handling and packaging of chicken meat, while the new bargaining unit, as defined by the CA in the
present case, includes employees engaged in "live" chicken operations, i.e., those who breed chicks
and grow chickens.
Respondent counters that petitioner’s proposed exclusion of certain employees from the bargaining
unit was a rehashed issue which was already settled in G.R. No. 110399. It maintains that the issue
of union membership coverage should no longer be raised as a certification election already took
place on September 30, 1998, wherein respondent won with 97% votes.
Petitioner’s contentions are erroneous. In G.R. No. 110399, the Court explained that the employees
of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis
constitute a single bargaining unit, which is not contrary to the one-company, one-union policy. An
appropriate bargaining unit is defined as a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the collective interest of all the employees,
consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law.21
In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers
Union – United Lumber and General Workers of the Phils,22 the Court, taking into account the
"community or mutuality of interests" test, ordered the formation of a single bargaining unit
consisting of the Sawmill Division in Butuan City and the Logging Division in Zapanta Valley,
Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It held that while the
existence of a bargaining history is a factor that may be reckoned with in determining the appropriate
bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interest. This is so because the basic test of an asserted
bargaining unit’s acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights.23 Certainly, there is a
mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their
functions mesh with one another. One group needs the other in the same way that the company
needs them both. There may be differences as to the nature of their individual assignments, but the
distinctions are not enough to warrant the formation of a separate bargaining unit.24
Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there
should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis25 of Magnolia Poultry Products Plant involved in
"dressed" chicken processing and Magnolia Poultry Farms engaged in "live" chicken operations.
Certain factors, such as specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their commonality of interest.
Although they seem separate and distinct from each other, the specific tasks of each division are
actually interrelated and there exists mutuality of interests which warrants the formation of a single
bargaining unit.
Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of
a confidential employee and, thus, prays that the said position and all other positions with access to
salary and compensation data be excluded from the bargaining unit.
This argument must fail. Confidential employees are defined as those who (1) assist or act in a
confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations.26 The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee - that is, the confidential relationship must
exist between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in
the normal course of their duties, become aware of management policies relating to labor relations is
a principal objective sought to be accomplished by the "confidential employee rule."27
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling
or care and protection of the employer’s property.28 Confidential employees, such as accounting
personnel, should be excluded from the bargaining unit, as their access to confidential information
may become the source of undue advantage.29 However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees who, as perceived by petitioner, has access to
salary and compensation data. The CA correctly held that the position of Payroll Master does not
involve dealing with confidential labor relations information in the course of the performance of his
functions. Since the nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.
Corollarily, although Article 24530 of the Labor Code limits the ineligibility to join, form and assist any
labor organization to managerial employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial employees and, hence, are likewise privy to
sensitive and highly confidential records.31 Confidential employees are thus excluded from the rank-
and-file bargaining unit. The rationale for their separate category and disqualification to join any
labor organization is similar to the inhibition for managerial employees, because if allowed to be
affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of
interests and the union can also become company-denominated with the presence of managerial
employees in the union membership.32 Having access to confidential information, confidential
employees may also become the source of undue advantage. Said employees may act as a spy or
spies of either party to a collective bargaining agreement.33 1avvphi1
In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel
Assistant belong to the category of confidential employees and, hence, are excluded from the
bargaining unit, considering their respective positions and job descriptions. As Human Resource
Assistant,34 the scope of one’s work necessarily involves labor relations, recruitment and selection of
employees, access to employees' personal files and compensation package, and human resource
management. As regards a Personnel Assistant,35 one's work includes the recording of minutes for
management during collective bargaining negotiations, assistance to management during grievance
meetings and administrative investigations, and securing legal advice for labor issues from the
petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge
of their functions, both gain access to vital labor relations information which outrightly disqualifies
them from union membership.
The proceedings for certification election are quasi-judicial in nature and, therefore, decisions
rendered in such proceedings can attain finality.36 Applying the doctrine of res judicata, the issue in
the
present case pertaining to the coverage of the employees who would constitute the bargaining unit is
now a foregone conclusion.
It bears stressing that a certification election is the sole concern of the workers; hence, an employer
lacks the personality to dispute the same. The general rule is that an employer has no standing to
question the process of certification election, since this is the sole concern of the workers.37 Law and
policy demand that employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of management.
A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to
no other.38 The only exception is where the employer itself has to file the petition pursuant to Article
25839 of the Labor Code because of a request to bargain collectively.40
With the foregoing disquisition, the Court writes finis to the issues raised so as to forestall future
suits of similar nature.
WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated
November 28, 2000 of the Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with
modification the Resolutions dated July 30, 1999 and August 27, 1999 of the Secretary of Labor,
are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO*
Associate Justice
PRESBITERO J. VELASCO, JR. ROBERTO A. ABAD

MARIA LOURDES P. A. SERENO**

Associate Justice
ATTESTATION

Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I
RENATO C. CORONA
Chief Justice
Footnotes
* Designated as an additional member in lieu of Associate Justice Jose Catral Mendoza, per
Special Order No. 1056a dated July 27, 2011.
** Designated as an a additional member, per Special Order No. 1028 dated June 21, 2011.
1
343 Phil. 143 (1997).
2
Id. at 151, 153-154.
3
Per petitioner’s Reply to Comment dated January 6, 2004, its Otis Plant is no longer
operational.
4
See CA Decision dated April 28, 2000, p. 5; rollo, p. 15.
5
Rollo, pp. 127-130.
6
Supra note 4.
7
Rollo, pp. 131-133.
See Resolution dated July 30, 1999 of then Acting DOLE Undersecretary Rosalinda
8
Dimapilis-Baldoz, id. at 84.
9
Id.
10
Id.
11
Rollo, pp. 142-150.
12
Supra note 8.
13
Rollo, pp. 88-89.
14
Per then Acting DOLE Undersecretary Rosalinda Dimapilis-Baldoz, id. at 83-86.
15
16
Rollo, p. 87.
17
Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Corona
Ibay-Somera and Elvi John S. Asuncion, concurring; id. at 11-26.
18
Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Elvi John
19
S. Asuncion and Eliezer R. Delos Santos, concurring, rollo, pp. 28-29.
San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, supra
20
note 1.
Id. at 153, citing University of the Philippines v. Calleja-Ferrer, 211 SCRA 464 (1992),
21
which cited Rothenberg on Labor Relations, p. 482.
22
G.R. No. 79526, December 21, 1990, 192 SCRA 598.
Id. at 602, citing Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al.,
23
103 Phil 1103 (1958).
24
Id.
25
See note 3.
Sugbuanon Rural Bank, Inc., v. Laguesma, G.R. No. 381 Phil. 414, 424 (2000), citing San
26
Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, supra note 1, at 374,
which cited Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d. 689 (1968), Ladish Co.,
178 NLRB 90 (1969) and B.F. Goodrich Co., 115 NLRB 722 (1956).
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R.

27
162025, August 3, 2010, 626 SCRA 376, 387, citing San Miguel Corp. Supervisors and
Exempt Employees Union v. Laguesma, supra note 1, at 374-375, which cited Westinghouse
Electric Corp. v. NLRB, id., Ladish Co., id., and B.F. Goodrich Co., id.
Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor, G.R. No. 103300, August 10,
28
1999, 312 SCRA 104, 116.
Golden Farms, Inc. v. Ferrer-Calleja, 256 Phil. 903, 909 (1989), cited in Standard
29
Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank, G.R. No.
161933, April 22, 2008, 552 SCRA 284, 291-292 and Philips Industrial Development, Inc. v.
NLRC, G.R. No. 88957, June 25, 1992, 210 SCRA 339, 348.
30
supervisory employees. - Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in the
collective bargaining unit of the rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations of their own. The rank-and-
file union and the supervisor's union operating within the supervisors’ union operating within
the same establishment may join the same federation or national union.
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., supra note
31
27, at 381, citing Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, February
28, 1996, 254 SCRA 182, 197.
Id. at 381-382, citing Bulletin Publishing Corporation v. Sanchez, 228 Phil. 600, 608-609
32
(1986).
33
Id. at 382, citing Golden Farms, Inc. v. Ferrer-Calleja, supra note 29.
Human Resource Assistant: To support the human resources objectives of the MPPP,
34
MPF this position shall provide coordination, advice, information and assistance to the plant
personnel manager in the following duties:
MANPOWER PLANNING (PROCESS[ING] AND LIVE)
1.1. Assists and participates in the studies on manning and manpower

forecasts needed to meet the current and future personnel requirements of
processing, live operations.
1.2. Checks plans for the implementation of staff movements such as

transfers, promotions and separations of both processing [and] live
operations.
1.3 Coordinates with all department[s] for the consolidation of manpower cost

budget and its complement.
1.4 Provides updated organization to the plant management.
COMPENSATION ADMINISTRATION (PROCESSING AND LIVE)
2.1 Initially evaluates and classifies all positions.
2.2 Prepares salary analyses and recommendations for consultation with

compensation dept.
2.3 Develops/updates compensation packages for specific personnel when

the need arises.
2.4 Administers compensation-related benefits, such as extra time worked

allowance, special allowance, supplementary allowance, housing assistance,
per diem, relocation expense reimbursement, etc.
2.5 Provide the Personnel Manager Officer and Compensation Department

with the records related to Compensation such as salary profiles per
classification used negotiations.
RECRUITMENT (PROCESSING, LIVE)
3.1 Conducts preliminary interview of applicants before giving tests.
3.2 Coordinates with Dept. Heads/Managers pertaining to internal

recruitment selection and hiring of qualified applicants.
3.3. Checks all pre-employment papers of the applicants to ensure its

completeness such as the requisition, approved Plantilla, applicant’s SSS
number and TIN, etc. (CA rollo, pp. 66-67) (Emphasis supplied.)
35
Personnel Assistant:
LABOR RELATIONS
1. Records minutes during Labor Management Cooperation dialogues and

CBA negotiations meeting and facilitates the same when requested.
2. Coordinates Grievance Meeting officially submitted by the Union to

Management and feedbacks PPM on schedules and results.
3. Provides support to departments in recording of minutes and schedule of

Administrative Investigations.
4. Consults and coordinates with SMB Legal Group to seek legal clarification
or opinion on certain labor issues and reports to PPM for action.
5. Performs and maintains liaison with union representative on certain issues

to minimize courses of action.
6. Ensures timely preparation and submission of DOLE monthly and quarterly

reportorial requirements.
EMPLOYEE RELATIONS
1. Facilitates timely implementation of Corporate Special Programs in

discussion with the PPM aligned with budgeted costs and Management
thrust.
2. Coordinates with local unions for participation/support in the activities of

program implementation and reports to PPM on results of meetings.
3. Maintains regular dialogues and liaisoning activities with employees on

concern affecting them and provides feedback to PPM. (Id. at 69-70)
(Emphasis supplied.)
United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 351 Phil. 244, 261 (1998)
36
citing B.F. Goodrich Philippines, Inc. v. B.F. Goodrich (Marikina Factory) Confidential &
Salaried Employees Union-NATU, 151 Phil. 585 (1973).
Barbizon Philippines, Inc. v. Nagkakaisang Supervisor ng Barbizon Philippines, Inc. - 330

37
Phil. 472, 493 (1996), citing Golden Farms, Inc. v. Secretary of Labor, G.R. No. 102130, July
26, 1994, 234 SCRA 517, 523; National Association of Trade Unions - Republic Planters
Bank Supervisors Chapter v. Torres, G.R. No. 93468, December 29, 1994, 239 SCRA 546,
551; Philippine Telegraph and Telephone Corp. v. Laguesma, G.R. No. 101730, June 17,
1993, 223 SCRA 452, 456-457.
Barbizon Philippines, Inc. v. Nagkakaisang Supervisor ng Barbizon Philippines, Inc. -

38
NAFLU, supra, citing Golden Farms, Inc. v. Secretary of Labor, supra.
Art. 258. When an employer may file petition. - When requested to bargain collectively, an
39
employer may petition the Bureau for an election. If there is no existing certified collective
bargaining agreement in the unit, the Bureau shall, after hearing, order a certification
election.
All certification election cases shall be decided within twenty (20) days.
The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of Labor.
National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v.

40
Torres, supra note 37.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 162355 August 14, 2009
STA. LUCIA EAST COMMERCIAL CORPORATION, Petitioner,

vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL
CORPORATION WORKERS ASSOCIATION (CLUP LOCAL CHAPTER), Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 assailing the Decision2 promulgated on 14 August 2003 as well as the
Resolution3 promulgated on 24 February 2004 of the Court of Appeals (appellate court) in CA-G.R.
SP No. 77015. The appellate court denied Sta. Lucia East Commercial Corporation’s (SLECC)
petition for certiorari with prayer for writ of preliminary injunction and temporary restraining order.
The appellate court further ruled that the Secretary of Labor and Employment (Secretary) was
correct when she held that the subsequent negotiations and registration of a collective bargaining
agreement (CBA) executed by SLECC with Samahang Manggagawa sa Sta. Lucia East Commercial
(SMSLEC) could not bar Sta. Lucia East Commercial Corporation Workers Association’s
(SLECCWA) petition for direct certification.
The Facts
The Secretary narrated the facts as follows:
On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its
chartered local, instituted a petition for certification election among the regular rank-and-file
employees of Sta. Lucia East Commercial Corporation and its Affiliates, docketed as Case No.
RO400-0202-RU-007. The affiliate companies included in the petition were SLE Commercial, SLE
Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery
and Essentials.
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to
inappropriateness of the bargaining unit. CLUP-Sta. Lucia East Commercial Corporation and its
Affiliates Workers Union appealed the order of dismissal to this Office on 14 September 2001. On 20
November 2001, CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union
[CLUP-SLECC and its Affiliates Workers Union] moved for the withdrawal of the appeal. On 31
January 2002, this Office granted the motion and affirmed the dismissal of the petition.
In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union] reorganized
itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association
(herein appellant CLUP-SLECCWA), limiting its membership to the rank-and-file employees of Sta.
Lucia East Commercial Corporation. It was issued Certificate of Creation of a Local Chapter No.
RO400-0110-CC-004.
On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC] employs
about 115 employees and that more than 20% of employees belonging to the rank-and-file category
are its members. [CLUP-SLECCWA] claimed that no certification election has been held among
them within the last 12 months prior to the filing of the petition, and while there is another union
registered with DOLE-Regional Office No. IV on 22 June 2001 covering the same employees,
namely [SMSLEC], it has not been recognized as the exclusive bargaining agent of [SLECC’s]
employees.
On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it has voluntarily
recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its regular rank-and-file
employees, and that collective bargaining negotiations already commenced between them. SLECC
argued that the petition should be dismissed for violating the one year and negotiation bar rules
under pars. (c) and (d), Section 11, Rule XI, Book V of the Omnibus Rules Implementing the Labor
Code.
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-file
employees and registered with DOLE-Regional Office No. IV on 9 January 2002.
In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and Comment to
[SLECC’S] Motion to Dismiss. It assailed the validity of the voluntary recognition of [SMSLEC] by
[SLECC] and their consequent negotiations and execution of a CBA. According to [CLUP-
SLECCWA], the same were tainted with malice, collusion and conspiracy involving some officials of
the Regional Office. Appellant contended that Chief LEO Raymundo Agravante, DOLE Regional
Office No. IV, Labor Relations Division should have not approved and recorded the voluntary
recognition of [SMSLEC] by [SLECC] because it violated one of the major requirements for voluntary
recognition, i.e., non-existence of another labor organization in the same bargaining unit. It pointed
out that the time of the voluntary recognition on 20 July 2001, appellant’s registration as [CLUP-
SLECC and its Affiliates Workers Union], which covers the same group of employees covered by
Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been
cancelled or abandoned. [CLUP-SLECCWA] also accused Med-Arbiter Bactin of malice, collusion
and conspiracy with appellee company when he dismissed the petition for certification election filed
by [SMSLEC] for being moot and academic because of its voluntary recognition, when he was fully
aware of the pendency of [CLUP-SLECCWA’s] earlier petition for certification election.
Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC] reiterated their respective positions
on the validity and invalidity of the voluntary recognition. On 29 July 2002, Med-Arbiter Bactin issued
the assailed Order.4
The Med-Arbiter’s Ruling
In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-SLECCWA’s
petition for direct certification on the ground of contract bar rule. The prior voluntary recognition of
SMSLEC and the CBA between SLECC and SMSLEC bars the filing of CLUP-SLECCWA’s petition
for direct certification. SMSLEC is entitled to enjoy the rights, privileges, and obligations of an
exclusive bargaining representative from the time of the recording of the voluntary recognition.
Moreover, the duly registered CBA bars the filing of the petition for direct certification.
CLUP-SLECCWA filed a Memorandum of Appeal of the Med-Arbiter’s Order before the

Secretary.
The Ruling of the Secretary of Labor and Employment
In her Decision promulgated on 27 December 2002, the Secretary found merit in CLUP-SLECCWA’s
appeal. The Secretary held that the subsequent negotiations and registration of a CBA executed by
SLECC with SMSLEC could not bar CLUP-SLECCWA’s petition. CLUP-SLECC and its Affiliates
Workers Union constituted a registered labor organization at the time of SLECC’s voluntary
recognition of SMSLEC. The dispositive portion of the Secretary’s Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the Order of the Med-Arbiter dated 29 July
2002 is REVERSED and SET ASIDE. Accordingly, let the entire records of the case be remanded to
the Regional Office of origin for the immediate conduct of a certification election, subject to the usual
pre-election conference, among the regular rank-and-file employees of [SLECC], with the following
choices:
1. Sta. Lucia East Commercial Corporation Workers’ Association – CLUP Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East Commercial; and
3. No Union.
Pursuant to Rule XI, Section II.1 of Department Order No. 9, appellee corporation is hereby directed
to submit to the office of origin, within ten (10) days from receipt hereof, the certified list of its
employees in the bargaining unit or when necessary a copy of its payroll covering the same
employees for the last three (3) months preceding the issuance of this Decision.
Let a copy of this Decision be furnished the Bureau of Labor Relations and Labor Relations Division
of Regional Office No. IV for the cancellation of the recording of voluntary recognition in favor of
Samahang Manggagawa sa Sta. Lucia East Commercial and the appropriate annotation of re-
registration of CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union to Sta.
Lucia East Commercial Corporation Workers Association-CLUP Local Chapter.
SO DECIDED.5
SLECC filed a motion for reconsideration which the Secretary denied for lack of merit in a Resolution
dated 27 March 2003. SLECC then filed a petition for certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary and quoted extensively from the Secretary’s
decision. The appellate court agreed with the Secretary’s finding that the workers sought to be
represented by CLUP-SLECC and its Affiliates Workers Union included the same workers in the
bargaining unit represented by SMSLEC. SMSLEC was not the only legitimate labor organization
operating in the subject bargaining unit at the time of SMSLEC’s voluntary recognition on 20 July
2001. Thus, SMSLEC’s voluntary recognition was void and could not bar CLUP-SLECCWA’s petition
for certification election.
The Issue
SLECC raised only one issue in its petition. SLECC asserted that the appellate court commited a
reversible error when it affirmed the Secretary’s finding that SLECC’s voluntary recognition of
SMSLEC was done while a legitimate labor organization was in existence in the bargaining unit.
The Ruling of the Court
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the
appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor organization as "any union or association of
employees which exists in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment." Upon compliance with all the
documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the roster of legitimate labor
organizations.6 Any applicant labor organization shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration.7
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the
concept of a bargaining unit. We explained the concept of a bargaining unit in San Miguel
Corporation v. Laguesma,8 where we stated that:
A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of
the entire body of employees, consistent with equity to the employer, indicated to be the best suited
to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of
the law."
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of
the employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.
Contrary to petitioner’s assertion, this Court has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor conclusive in the determination of what
constitutes an appropriate bargaining unit.
However, employees in two corporations cannot be treated as a single bargaining unit even if the
businesses of the two corporations are related.9
A Legitimate Labor Organization Representing

An Inappropriate Bargaining Unit
CLUP-SLECC and its Affiliates Workers Union’s initial problem was that they constituted a legitimate
labor organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its
Affiliates Workers Union subsequently re-registered as CLUP-SLECCWA, limiting its members to the
rank-and-file of SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union
was a legitimate labor organization at the time of SLECC’s voluntary recognition of SMSLEC.
SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its Affiliates
Workers Union represented an appropriate bargaining unit. 1avvphi1
The inclusion in the union of disqualified employees is not among the grounds for cancellation of
registration, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code.10 Thus, CLUP-
SLECC and its Affiliates Workers Union, having been validly issued a certificate of registration,
should be considered as having acquired juridical personality which may not be attacked collaterally.
The proper procedure for SLECC is to file a petition for cancellation of certificate of registration11 of
CLUP-SLECC and its Affiliates Workers Union and not to immediately commence voluntary
recognition proceedings with SMSLEC.
SLECC’s Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the representation status of a union in unorganized
establishments.12 SLECC was not an unorganized establishment when it voluntarily recognized
SMSLEC as its exclusive bargaining representative on 20 July 2001. CLUP-SLECC and its Affiliates
Workers Union filed a petition for certification election on 27 February 2001 and this petition
remained pending as of 20 July 2001. Thus, SLECC’s voluntary recognition of SMSLEC on 20 July
2001, the subsequent negotiations and resulting registration of a CBA executed by SLECC and
SMSLEC are void and cannot bar CLUP-SLECCWA’s present petition for certification election.
Employer’s Participation in a Petition for Certification Election
We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWA’s
petition for certification election. In petitions for certification election, the employer is a mere
bystander and cannot oppose the petition or appeal the Med-Arbiter’s decision. The exception to this
rule, which happens when the employer is requested to bargain collectively, is not present in the
case before us.13
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as
well as the Resolution promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No.
77015.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
RENATO C. CORONA MINITA V. CHICO-NAZARIO*

TERESITA J. LEONARDO-DE CASTRO

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court’s Division.
REYNATO S. PUNO
Chief Justice
Footnotes
* Designated additional member per Raffle dated 3 August 2009.
1
Under Rule 45 of the 1997 Rules of Civil Procedure.
Rollo, pp. 27-32. Penned by Associate Justice Eugenio S. Labitoria, with Associate Justices
2
Elvi John S. Asuncion and Lucas P. Bersamin, concurring.
3
Id. at 34.
4
Id. at 51-52.
5
Id. at 54-55.
Section 3, Rule VI, Implementing Rules of Book V of the Labor Code (as amended by
6
Department Order No. 9, 21 June 1997).
7
Art. 234 of the Labor Code states that the following are required for the issuance of a
certificate of registration:
(a) Fifty pesos (₱50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers
who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of
its adoption or ratification and the list of the members who participated in it.
8
G.R. No. 100485, 21 September 1994, 236 SCRA 595, 599 (citations omitted).
9
Diatagon Labor Federation Local 110 of the ULGWP v. Ople, 189 Phil. 396 (1980).
Tagaytay Highlands International Golf Club Inc. v. Tagaytay Highlands Employees Union-
10
PTGWO, 443 Phil. 841 (2003).
Rule VIII, Implementing Rules of Book V of the Labor Code (as amended by Department
11
Order No. 9, 21 June 1997).
Section 1, Rule X, Implementing Rules of Book V of the Labor Code (as amended by
12
Department Order No. 9, 21 June 1997).
Samahang Manggagawa sa Samma-Lakas sa Industriya ng Kapatirang Haligi ng Alyansa

13
(Samma-Likha) v. Samma Corporation, G.R. No. 167141, 13 March 2009.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 157086 February 18, 2013
LEPANTO CONSOLIDATED MINING COMPANY, Petitioner,

vs.
THE LEPANTO CAPATAZ UNION, Respondent.
DECISION
BERSAMIN, J.:
Capatazes are not rank-and-file employees because they perform supervisory functions for the
management; hence, they may form their own union that is separate and distinct from the labor
organization of rank-and-file employees.
The Case-
Lepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on December
18, 2002,1 whereby the Court of Appeals (CA) dismissed its petition for certiorari on the ground of its
failure to first file a motion for reconsideration against the decision rendered by the Secretary of the
Department of Labor and Employment (DOLE); and the resolution promulgated on January 31,
2003,2 whereby the CA denied Lepanto's motion for reconsideration.
Antecedents
As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several

mining claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union
(Union), a labor organization duly registered with DOLE, filed a petition for consent election with the
Industrial Relations Division of the Cordillera Regional Office (CAR) of DOLE, thereby proposing to
represent 139 capatazes of Lepanto.3
In due course, Lepanto opposed the petition,4 contending that the Union was in reality seeking a
certification election, not a consent election, and would be thereby competing with the Lepanto
Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out that
the capatazes were already members of LEU, the exclusive representative of all rank-and-file
employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that
the capatazes could form a separate bargaining unit due to their not being rank-and-file
employees,5 viz:
xxxx
We agree with petitioner that its members perform a function totally different from the rank-and-file
employees. The word capataz is defined in Webster’s Third International Dictionary, 1986 as "a
boss", "foreman" and "an overseer". The employer did not dispute during the hearing that the
capatazes indeed take charge of the implementation of the job orders by supervising and
instructing the miners, mackers and other rank-and-file workers under them, assess and
evaluate their performance, make regular reports and recommends (sic) new systems and
procedure of work, as well as guidelines for the discipline of employees. As testified to by
petitioner’s president, the capatazes are neither rank-and-file nor supervisory and, more or
less, fall in the middle of their rank. In this respect, we can see that indeed the capatazes
differ from the rank-and-file and can by themselves constitute a separate bargaining unit.
While it is claimed by the employer that historically, the capatazes have been considered among the
rank-and-file and that it is only now that they seek a separate bargaining unit such history of
affiliation with the rank-and-file association of LEU cannot totally prevent the capatazes from
disaffiliating and organizing themselves separately. The constitutional right of every worker to self-
organization essentially gives him the freedom to join or not to join an organization of his own
choosing.
The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-file
employees represented by the LEU renders the contract bar rule inapplicable. While the collective
bargaining agreement existing between the LEU and the employer covering the latter’s rank-andfile
employee covers likewise the capatazes, it was testified to and undisputed by the employer that the
capatazes did not anymore participate in the renegotiation and ratification of the new CBA upon
expiration of their old one on 16 November 1998. Their nonparticipation was apparently due to their
formation of the new bargaining unit. Thus, while the instant petition was filed on 27 May 1998, prior
to the freedom period, in the interest of justice and in consonance with the constitutional right of
workers to self-organization, the petition can be deemed to have been filed at the time the 60-day
freedom period set in. After all, the petition was still pending and unresolved during this period.
WHEREFORE, the petition is hereby granted and a certification election among the capataz
employees of the Lepanto Consolidated Mining Company is hereby ordered conducted, subject to
the usual preelection and inclusion/exclusion proceedings, with the following choices:
1.Lepanto Capataz Union; and
2.No Union.
The employer is directed to submit to this office within ten (10) days from receipt hereof a copy of the
certified list of its capataz employees and the payroll covering the said bargaining unit for the last
three (3) months prior to the issuance hereof.
SO DECIDED. 6
Lepanto appealed to the DOLE Secretary.7
On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis- Baldoz (Baldoz), acting by
authority of the DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently stating as
follows:
xxxx
The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that "in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists", the order for the conduct of a certification election is proper.
Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when she directed
the conduct of a certification election when appellee prays for the conduct of a consent election, let it
be stressed that appellee seeks to be recognized as the sole and exclusive bargaining
representative of all capataz employees of appellant. There are two modes by which this can be
achieved, one is by voluntary recognition and two, by consent or certification election. Voluntary
recognition under Rule X, Department Order No. 9 is a mode whereby the employer voluntarily
recognizes the union as the bargaining representative of all the members in the bargaining unit
sought to be represented. Consent and certification election under Rules XI and XII of Department
Order No. 9 is a mode whereby the members of the bargaining unit decide whether they want a
bargaining representative and if so, who they want it to be. The difference between a consent
election and a certification election is that the conduct of a consent election is agreed upon by the
parties to the petition while the conduct of a certification election is ordered by the Med-Arbiter. In
this case, the appellant withdrew its consent and opposed the conduct of the election. Therefore, the
petition necessarily becomes one of a petition for certification election and the Med-Arbiter was
correct in granting the same.9
xxxx
In the ensuing certification election held on November 28, 2000, the Union garnered 109 of the 111
total valid votes cast.10
On the day of the certification election, however, Lepanto presented an opposition/protest.11 Hence,

on February 8, 2001, a hearing was held on Lepanto’s opposition/protest. Although the parties were
required in that hearing to submit their respective position papers, Lepanto later opted not to submit
its position paper,12 and contended that the issues identified during the hearing did not pose any
legal issue to be addressed in a position paper.13
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision
certifying the Union as the sole and exclusive bargaining agent of all capatazes of Lepanto.14
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE
Secretary.
By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas affirmed the
decision dated April 26, 2001, holding and disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction
based on her failure to resolve appellant’s motion to modify order to submit position papers and on
rendering judgment on the basis only of appellee’s position paper.
We deny.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing
Book V of the Labor Code, states that "in all proceedings at all levels, incidental motions shall not be
given due course, but shall remain as part of the records for whatever they may be worth when the
case is decided on the merits".
Further, the motion to modify order to submit position papers filed by appellant is without merit.
Appellant claimed that the issues over which Med-Arbiter Ulep directed the submission of position
papers were: (1) failure to challenge properly; (2) failure (especially of LEU) to participate actively in
the proceedings before the decision calling for the conduct of certification election; and (3) validity of
earlier arguments. According to appellant, the first issue was for appellee LCU to reply to in its
position paper, the second issue was for the LEU and the third issue for appellant company to
explain in their respective position paper. It was the position of appellant company that unless the
parties filed their position paper on each of their respective issues, the other parties cannot discuss
the issues they did not raise in the same position papers and have to await receipt of the others’
position paper for their appropriate reply.
Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of
protests on the conduct of election, states that "the Med-Arbiter shall in the same hearing direct all
concerned parties, including the employer, to simultaneously submit their respective position papers
within a non-extendible period of ten days". The issues as recorded in the minutes of 28 February
2001 hearing before the Med- Arbiter are clear. The parties, including appellant company were
required to submit their respective positions on whether there was proper challenge of the voters,
whether LEU failed to participate in the proceedings, if so, whether it should be allowed to participate
at this belated stage and whether the arguments raised during the pre-election conferences and in
the protests are valid. The parties, including appellant company were apprised of these issues and
they agreed thereto. The minutes of the hearing even contained the statement that "no order will
issue" and that "the parties are informed accordingly". If there is any matter that had to be clarified,
appellant should have clarified the same during the said hearing and refused to file its position paper
simultaneously with LCU and LEU. It appears that appellant did not do so and acquiesced to the
filing of its position paper within fifteen days from the date of said hearing.
Neither is there merit in appellant’s contention that the Med- Arbiter resolved the protest based
solely on appellee LCU’s position paper. Not only did the Med-Arbiter discuss the demerits of
appellant’s motion to modify order to submit position papers but likewise the demerits of its protest.
We do not, however, agree with the Med-Arbiter that the protest should be dismissed due to
appellant’s failure to challenge the individual voters during the election. We take note of the minutes
of the pre-election conference on 10 November 2000, thus:
"It was also agreed upon (by union and management’s legal officer) that all those listed will be
allowed to vote during the certification election subject to challenge by management on ground that
none of them belongs to the bargaining unit". (Underscoring supplied)
It is therefore, not correct to say that there was no proper challenge made by appellant company.
The challenge was already manifested during the pre-election conference, specifying that all listed
voters were being challenged because they do not belong to the bargaining unit of capatazes.
Likewise, the formal protest filed by appellant company on the day of the election showed its protest
to the conduct of the election on the grounds that (1) none of the names submitted and included
(with pay bracket 8 and 9) to vote qualifies as capataz under the five-point characterization made in
02 May 2000 decision calling for the conduct of certification election; (2) the characterization made in
the 02 May 2000 decision pertains to shift bosses who constitutes another union, the Lepanto Local
Staff Union; and (3) the names listed in the voters’ list are members of another union, the Lepanto
Employees Union. This constitutes proper challenge to the eligibility of all the voters named in the list
which includes all those who cast their votes. The election officer should have not canvassed the
ballots and allowed the Med-Arbiter to first determine their eligibility.
Notwithstanding the premature canvass of the votes, we note that appellant company failed to
support its grounds for challenge with sufficient evidence for us to determine the validity of its claim.
No job description of the challenged voters was submitted by appellant from which we can verify
whether the said voters are indeed disqualified from the alleged five-point characterization made in
the 02 May 2000 decision, either before the Med-Arbiter or on appeal. Neither was the job
description of the shift bosses whom appellant company claims pertain to the alleged five-point
characterization submitted for our perusal. The challenge must perforce fail for lack of evidence.
As to the alleged membership of appellee LCU’s member with another union LEU, the issue has
been resolved in the 02 May 200[0] decision of Med-Arbiter Lontoc which we affirmed on 12 July
2000.
WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-Arbiter
dated 26 April 2001, certifying Lepanto Capataz Union as the sole and exclusive bargaining agent of
all capataz workers of Lepanto Consolidated Mining Company, is AFFIRMED.
SO RESOLVED.16
Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for reconsideration, Lepanto
challenged in the CA the foregoing decision of the DOLE Secretary through a petition for certiorari.
On December 18, 2002, the CA dismissed Lepanto’s petition for certiorari, stating in its first assailed
resolution:
Considering that the petitioner failed to file a prior motion for reconsideration of the Decision of the
public respondent before instituting the present petition as mandated by Section 1 of Rule 65 of the
1997 Rules of Civil Procedure, as amended, the instant "Petition for Certiorari Under Rule 65 with
Prayer for Temporary Restraining Order and Injunction" is hereby DISMISSED.
Well-settled is the rule that the "filing of a petition for certiorari under Rule 65 without first moving for
reconsideration of the assailed resolution generally warrants the petition’s outright dismissal. As we
consistently held in numerous cases, a motion for reconsideration by a concerned party is
indispensable for it affords the NLRC an opportunity to rectify errors or mistakes it might have
committed before resort to the courts can be had.
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law against acts of public respondents. Here, the plain and
adequate remedy expressly provided by law was a motion for reconsideration of the impugned
resolution, based on palpable or patent errors, to be made under oath and filed within ten (10) days
from receipt of the questioned resolution of the NLRC, a procedure which is jurisdictional. Further, it
should be stressed that without a motion for reconsideration seasonably filed within the ten-day
reglementary period, the questioned order, resolution or decision of NLRC, becomes final and
executory after ten (10) calendar days from receipt thereof." (Association of Trade Unions (ATU),
Rodolfo Monteclaro and Edgar Juesan vs. Hon. Commissioners Oscar N. Abella, Musib N.
Buat, Leon Gonzaga, Jr., Algon Engineering Construction Corp., Alex Gonzales and Editha
Yap. 323 SCRA 50).
SO ORDERED.17
Lepanto moved to reconsider the dismissal, but the CA denied its motion for reconsideration through
the second assailed resolution.18
Issues
Hence, this appeal by Lepanto based on the following errors, namely:
THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR

CERTIORARI ON THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION
WAS FILED. THE DECISION OF THE SECRETARY BEING FINAL AND EXECUTORY, A
MOTION FOR RECONSIDERATION WAS NOT AN AVAILABLE REMEDY FOR
PETITIONER.
II
ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF

JURISDICTION, [O]R WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN ISSUNG THE DECISION DATED SEPTEMBER 17, 2002,
WHEN SHE DELIBERATELY IGNORED THE FACTS AND RULED IN FAVOR OF THE
RESPONDENT UNION, DESPITE HER OWN FINDING THAT THERE HAD BEEN A
PREMATURE CANVASS OF VOTES. 19
Lepanto argues that a motion for reconsideration was not an available remedy due to the decision of
the DOLE Secretary being already classified as final and executory under Section 15, Rule XI, Book
V of Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, series
of 1997;20 that the Union’s petition for consent election was really a certification election; that the
Union failed to give a definite description of the bargaining unit sought to be represented; and that
the capatazes should be considered as rank-and-file employees.
The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-requisite in the
filing of its petition for certiorari; and, secondly, whether the capatazes could form their own union
independently of the rank-and-file employees.
Ruling
The petition for review has no merit.
I.
The filing of the motion for reconsideration is a pre-requisite to the filing of a petition
for certiorari to assail the decision of the DOLE Secretary
We hold to be untenable and not well taken Lepanto’s submissions that: (1) a motion for
reconsideration was not an available remedy from the decision of the DOLE Secretary because of
Section 15, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code, as amended; and
(2) the ruling in National Federation of Labor v. Laguesma 21 (recognizing the remedy
of certiorari against the decision of the DOLE Secretary to be filed initially in the CA) actually affirms
its position that an immediate recourse to the CA on certiorari is proper even without the prior filing
of a motion for reconsideration.
To start with, the requirement of the timely filing of a motion for reconsideration as a precondition to
the filing of a petition for certiorari accords with the principle of exhausting administrative remedies
as a means to afford every opportunity to the respondent agency to resolve the matter and correct
itself if need be.22
And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin’s Funeral
Home v. National Labor Relations Commission, 23 where the Court has pronounced that the special
civil action of certiorari is the appropriate remedy from the decision of the National Labor Relations
Commission (NLRC) in view of the lack of any appellate remedy provided by the Labor Code to a
party aggrieved by the decision of the NLRC. Accordingly, any decision, resolution or ruling of the
DOLE Secretary from which the Labor Code affords no remedy to the aggrieved party may be
reviewed through a petition for certiorari initiated only in the CA in deference to the principle of the
hierarchy of courts.
Yet, it is also significant to note that National Federation of Labor v. Laguesma also reaffirmed the
dictum issued in St. Martin’s Funeral Homes v. National Labor Relations Commission to the effect
that "the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition
for any further or subsequent remedy, and then seasonably avail of the special civil action
of certiorari under Rule 65 x x x."24
Indeed, the Court has consistently stressed the importance of the seasonable filing of a motion for
reconsideration prior to filing the certiorari petition. In SMC Quarry 2 Workers Union-February Six
Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial Corporation 25 and Manila
Pearl Corporation v. Manila Pearl Independent Workers Union,26 the Court has even warned that a
failure to file the motion for reconsideration would be fatal to the cause of the petitioner.27 Due to its
extraordinary nature as a remedy, certiorari is to be availed of only when there is no appeal, or any
plain, speedy or adequate remedy in the ordinary course of law.28 There is no question that a motion
for reconsideration timely filed by Lepanto was an adequate remedy in the ordinary course of law in
view of the possibility of the Secretary of Justice reconsidering her disposition of the matter, thereby
according the relief Lepanto was seeking. 1âwphi1
Under the circumstances, Lepanto’s failure to timely file a motion for reconsideration prior to filing its
petition for certiorari in the CA rendered the September 17, 2002 resolution of the DOLE Secretary
beyond challenge.
II.
Capatazes are not rank-and-file employees; hence, they could form their own union
Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on May 2,
2000 that the capatazes were performing functions totally different from those performed by the
rank-and-file employees, and that the capatazes were "supervising and instructing the miners,
mackers and other rank-and-file workers under them, assess[ing] and evaluat[ing] their performance,
mak[ing] regular reports and recommend[ing] new systems and procedure of work, as well as
guidelines for the discipline of employees."29 Hence, Med-Arbiter Lontoc concluded,
the capatazes "differ[ed] from the rank-and-file and [could] by themselves constitute a separate
bargaining unit."30
Agreeing with Med-Arbiter Lontoc’s findings, then DOLE Undersecretary Baldoz, acting by authority
of the DOLE Secretary, observed in the resolution dated July 12, 2000, thus:31
The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that "in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists", the order for the conduct of a certification election is proper.32
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in
the DOLE, an office that was undeniably possessed of the requisite expertise on the matter in issue.
In dealing with the matter, her subordinates in the DOLE fairly and objectively resolved whether the
Union could lawfully seek to be the exclusive representative of the bargaining unit of capatazes in
the company. Their factual findings, being supported by substantial evidence, are hereby accorded
great respect and finality. Such findings cannot be made the subject of our judicial review by petition
under Rule 45 of the Rules of Court, because:
x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires
that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective field. Judicial review of labor cases does not go
far as to evaluate the sufficiency of evidence on which the labor official’s findings rest. It is not our
function to assess and evaluate all over again the evidence, testimonial and documentary, adduced
by the parties to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule limits that
function of the Court to review or revision of errors of law and not to a second analysis of the
evidence. Here, petitioners would have us re-calibrate all over again the factual basis and the
probative value of the pieces of evidence submitted by the Company to the DOLE, contrary to the
provisions of Rule 45. Thus, absent any showing of whimsical or capricious exercise of judgment,
and unless lack of any basis for the conclusions made by the appellate court may be amply
demonstrated, we may not disturb such factual findings.33
In any event, we affirm that capatazes or foremen are not rank-andfile employees because they are
an extension of the management, and as such they may influence the rank-and-file workers under
them to engage in slowdowns or similar activities detrimental to the policies, interests or business
objectives of the employers.34
WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the
resolutions the Court of Appeals promulgated on December 18, 2002 and January 31, 2003.
Petitioner to pay the costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:

Chief Justice
TERESITA J. LEONARDO-DE CASTRO MARTIN S. VILLARAMA, JR.

BIENVENIDO L. REYES
Associate Justice
CERTIFICATION
of the Court's Division.

Chief Justice
Footnotes
1
Rollo, pp. 23-24; penned by Associate Justice Amelita G. Tolentino, with Associate Justice
Eubulo G. Verzola (retired/deceased) and Associate Justice Candido V. Rivera
(retired/deceased) concurring.
2
Id. at 25.
3
4
Id. at 27-28.
5
Id. at 37-40.
6
Id. at 39-40 (bold emphasis supplied).
7
Id. at 41-51.
8
Id. at 53-57.
9
Id. at 56.
10
Id. at 18.
11
Id. at 58.
12
Id. at 59-61.
13
Id.
14
Id. at 18.
15
Id. at 18-20.
16
Id. at 19-20.
17
Rollo, pp. 23-24.
18
Id. at 25.
19
Id. at 9.
Section 15. Appeal; finality of decision.—The decision of the Med-Arbiter may be appealed

20
to the Secretary within ten (10) days from receipt by the parties of a copy thereof, only on the
grounds of violation of Section 9 hereof or of serious errors of fact or law in the resolution of
a protest.
The appeal shall be under oath and shall consist of a memorandum of appeal
specifically stating the grounds relied upon by the appellant with the supporting
arguments and evidence. The appeal shall be deemed not filed unless accompanied
by proof of service thereof to appellee. The decision of the Secretary on the appeal
shall be final and executory.
Where no appeal is filed within the ten-day period, the decision shall become final
and executory and the Med-Arbiter shall enter this fact into the records of the case.
21
G.R. No. 123426, March 10, 1999, 304 SCRA 405.
22
Teng v. Pahagac, G.R. No. 169704, November 17, 2010, 635 SCRA 173, 185.
23
G.R. No. 130866, September 16, 1998, 295 SCRA 494, 507-508.
24
Id. at 500-501.
25
G.R. No. 150761, May 19, 2004, 428 SCRA 524.
26
G.R. No. 142960, April 15, 2005, 456 SCRA 258.
SMC Quarry 2 Workers Union-February Six Movement (FSM) Local Chapter No. 1564 v.
27
Titan Megabags Industrial Corporation, supra at 527; Manila Pearl Corporation v. Manila

Pearl Independent Workers Union, id. at 262.
28
Section 1, Rule 65, Rules of Court.
29
30
Id.
31
Id. at 53-57.
32
Id. at 56.
Telefunken Semiconductors Employees Union-FFW v. Court of Appeals, G.R. Nos.

33
143013-14, December 18, 2000, 348 SCRA 565, 579-580.
Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78755, July 19, 1989, 175 SCRA 471, 477-
34
478.

SUPREME COURT
Manila
EN BANC
G.R. No. 179146 July 23, 2013
HOLY CHILD CATHOLIC SCHOOL, Petitioner,

vs.
HON. PATRICIA STO. TOMAS, in her official capacity as Secretary of the Department of Labor
and Employment, and PINAG-ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD
CATHOLIC SCHOOL TEACHERS AND EMPLOYEES LABOR UNION (HCCS-TELU-
PIGLAS), Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are the
April 18, 2007 Decision1 and July 31, 2007 Resolution2 of the Court of Appeals in CA-G.R. SP No.
76175, which affirmed the December 27, 2002 Decision3 and February 13, 2003 Resolution4 of the
Secretary of the Department of Labor and Employment (SOLE) that set aside the August 10, 2002
Decision5 of the Med-Arbiter denying private respondent’s petition for certification election.
The factual antecedents are as follows:
On May 31, 2002, a petition for certification election was filed by private respondent Pinag-Isang
Tinig at Lakas ng Anakpawis – Holy Child Catholic School Teachers and Employees Labor Union
(HCCS-TELUPIGLAS), alleging that: PIGLAS is a legitimate labor organization duly registered with
the Department of Labor and Employment (DOLE) representing HCCS-TELU-PIGLAS; HCCS is a
private educational institution duly registered and operating under Philippine laws; there are
approximately one hundred twenty (120) teachers and employees comprising the proposed
appropriate bargaining unit; and HCCS is unorganized, there is no collective bargaining agreement
or a duly certified bargaining agent or a labor organization certified as the sole and exclusive
bargaining agent of the proposed bargaining unit within one year prior to the filing of the
petition.6 Among the documents attached to the petition were the certificate of affiliation with Pinag-
Isang Tinig at Lakas ng Anakpawis Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-KAMAO)
issued by the Bureau of Labor Relations (BLR), charter certificate issued by PIGLASKAMAO, and
certificate of registration of HCCS-TELU as a legitimate labor organization issued by the DOLE.7
In its Comment8 and Position Paper,9 petitioner HCCS consistently noted that it is a parochial school
with a total of 156 employees as of June 28, 2002, broken down as follows: ninety-eight (98)
teaching personnel, twenty-five (25) non-teaching academic employees, and thirty-three (33) non-
teaching non-academic workers. It averred that of the employees who signed to support the petition,
fourteen (14) already resigned and six (6) signed twice. Petitioner raised that members of private
respondent do not belong to the same class; it is not only a mixture of managerial, supervisory, and
rank-and-file employees – as three (3) are vice-principals, one (1) is a department head/supervisor,
and eleven (11) are coordinators – but also a combination of teaching and non-teaching personnel –
as twenty-seven (27) are non-teaching personnel. It insisted that, for not being in accord with Article
24510 of the Labor Code, private respondent is an illegitimate labor organization lacking in personality
to file a petition for certification election, as held in Toyota Motor Philippines Corporation v. Toyota
Motor Philippines Corporation Labor Union;11 and an inappropriate bargaining unit for want of
community or mutuality of interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor
and Employment12 and De La Salle University Medical Center and College of Medicine v.
Laguesma.13
Private respondent, however, countered that petitioner failed to substantiate its claim that some of
the employees included in the petition for certification election holds managerial and supervisory
positions.14 Assuming it to be true, it argued that Section 11 (II),15 Rule XI of DOLE Department Order
(D.O.) No. 9, Series of 1997, provided for specific instances in which a petition filed by a legitimate
organization shall be dismissed by the Med-Arbiter and that "mixture of employees" is not one of
those enumerated. Private respondent pointed out that questions pertaining to qualifications of
employees may be threshed out in the inclusion-exclusion proceedings prior to the conduct of the
certification election, pursuant to Section 2,16 Rule XII of D.O. No. 9. Lastly, similar to the ruling in In
Re: Globe Machine and Stamping Company,17 it contended that the will of petitioner’s employees
should be respected as they had manifested their desire to be represented by only one bargaining
unit. To back up the formation of a single employer unit, private respondent asserted that even if the
teachers may receive additional pay for an advisory class and for holding additional loads,
petitioner’s academic and non-academic personnel have similar working conditions. It cited Laguna
College v. Court of Industrial Relations,18 as well as the case of a union in West Negros College in
Bacolod City, which allegedly represented both academic and non-academic employees.
On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the petition for certification
election on the ground that the unit which private respondent sought to represent is inappropriate.
She resolved:
A certification election proceeding directly involves two (2) issues namely: (a) the proper composition
and constituency of the bargaining unit; and (b) the validity of majority representation claims. It is
therefore incumbent upon the Med-Arbiter to rule on the appropriateness of the bargaining unit once
its composition and constituency is questioned.
Section 1 (q), Rule I, Book V of the Omnibus Rules defines a "bargaining unit" as a group of
employees sharing mutual interests within a given employer unit comprised of all or less than all of
the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit. This definition has provided the "community or mutuality of
interest" test as the standard in determining the constituency of a collective bargaining unit. This is
so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights. The application of this test may either result in the formation of an employer unit or
in the fragmentation of an employer unit.
In the case at bar, the employees of petitioner, may, as already suggested, quite easily be
categorized into (2) general classes: one, the teaching staff; and two, the non-teaching-staff. Not
much reflection is needed to perceive that the community or mutuality of interest is wanting between
the teaching and the non-teaching staff. It would seem obvious that the teaching staff would find very
little in common with the non-teaching staff as regards responsibilities and function, working
conditions, compensation rates, social life and interests, skills and intellectual pursuits, etc. These
are plain and patent realities which cannot be ignored. These dictate the separation of these two
categories of employees for purposes of collective bargaining. (University of the Philippines vs.
Ferrer-Calleja, 211 SCRA 451)19
Private respondent appealed before the SOLE, who, on December 27, 2002, ruled against the
dismissal of the petition and directed the conduct of two separate certification elections for the
teaching and the non-teaching personnel, thus:
We agree with the Med-Arbiter that there are differences in the nature of work, hours and conditions
of work and salary determination between the teaching and non-teaching personnel of petitioner.
These differences were pointed out by petitioner in its position paper. We do not, however, agree
with the Med-Arbiter that these differences are substantial enough to warrant the dismissal of the
petition. First, as pointed out by private respondent, "inappropriateness of the bargaining unit sought
to be represented is not a ground for the dismissal of the petition." In fact, in the cited case of
University of the Philippines v. Ferrer-Calleja, supra, the Supreme Court did not order the dismissal
of the petition but ordered the conduct of a certification election, limiting the same among the non-
academic personnel of the University of the Philippines.
It will be recalled that in the U.P. case, there were two contending unions, the Organization of Non-
Academic Personnel of U.P. (ONAPUP) and All U.P. Workers Union composed of both academic
and nonacademic personnel of U.P. ONAPUP sought the conduct of certification election among the
rank-and-file non-academic personnel only while the all U.P. Workers Union sought the conduct of
certification election among all of U.P.’s rank-and-file employees covering academic and
nonacademic personnel. While the Supreme Court ordered a separate bargaining unit for the U.P.
academic personnel, the Court, however, did not order them to organize a separate labor
organization among themselves. The All U.P. Workers Union was not directed to divest itself of its
academic personnel members and in fact, we take administrative notice that the All U.P. Workers
Union continue to exist with a combined membership of U.P. academic and non-academic personnel
although separate bargaining agreements is sought for the two bargaining units. Corollary, private
respondent can continue to exist as a legitimate labor organization with the combined teaching and
non-teaching personnel in its membership and representing both classes of employees in separate
bargaining negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby REVERSED and
SET ASIDE. In lieu thereof, a new order is hereby issued directing the conduct of two certification
elections, one among the non-teaching personnel of Holy Child Catholic School, and the other,
among the teaching personnel of the same school, subject to the usual pre-election conferences and
inclusion-exclusion proceedings, with the following choices:
A. Certification Election Among Petitioner’s Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
B. Certification Election Among Petitioner’s Non-Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
Petitioner is hereby directed to submit to the Regional Office of origin within ten (10) days from
receipt of this Decision, a certified separate list of its teaching and non-teaching personnel or when
necessary a separate copy of their payroll for the last three (3) months prior to the issuance of this
Decision.20
Petitioner filed a motion for reconsideration21 which, per Resolution dated February 13, 2003, was
denied. Consequently, petitioner filed before the CA a Petition for Certiorari with Prayer for
Temporary Restraining Order and Preliminary Injunction.22 The CA resolved to defer action on the
prayer for TRO pending the filing of private respondent’s Comment.23 Later, private respondent and
petitioner filed their Comment24 and Reply,25 respectively.
On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging that Hon.
Helen F. Dacanay of the Industrial Relations Division of the DOLE was set to implement the SOLE
Decision when it received a summons and was directed to submit a certified list of teaching and non-
teaching personnel for the last three months prior to the issuance of the assailed Decision.26 Acting
thereon, on August 5, 2003, the CA issued the TRO and ordered private respondent to show cause
why the writ of preliminary injunction should not be granted.27 Subsequently, a Manifestation and
Motion28 was filed by private respondent, stating that it repleads by reference the arguments raised in
its Comment and that it prays for the immediate lifting of the TRO and the denial of the preliminary
injunction. The CA, however, denied the manifestation and motion on November 21, 200329 and,
upon motion of petitioner,30 granted the preliminary injunction on April 21, 2005.31 Thereafter, both
parties filed their respective Memorandum.32
On April 18, 2007, the CA eventually dismissed the petition. As to the purported commingling of
managerial, supervisory, and rank-and-file employees in private respondent’s membership, it held
that the Toyota ruling is inapplicable because the vice-principals, department head, and coordinators
are neither supervisory nor managerial employees. It reasoned:
x x x While it may be true that they wield power over other subordinate employees of the petitioner, it
must be stressed, however, that their functions are not confined with policy-determining such as
hiring, firing, and disciplining of employees, salaries, teaching/working hours, other monetary and
non-monetary benefits, and other terms and conditions of employment. Further, while they may
formulate policies or guidelines, nonetheless, such is merely recommendatory in nature, and still
subject to review and evaluation by the higher executives, i.e., the principals or executive officers of
the petitioner. It cannot also be denied that in institutions like the petitioner, company policies have
already been pre-formulated by the higher executives and all that the mentioned employees have to
do is carry out these company policies and standards. Such being the case, it is crystal clear that
there is no improper commingling of members in the private respondent union as to preclude its
petition for certification of (sic) election.33
Anent the alleged mixture of teaching and non-teaching personnel, the CA agreed with petitioner
that the nature of the former’s work does not coincide with that of the latter. Nevertheless, it ruled
that the SOLE did not commit grave abuse of discretion in not dismissing the petition for certification
election, since it directed the conduct of two separate certification elections based on Our ruling in
University of the Philippines v. Ferrer-Calleja.34
A motion for reconsideration35 was filed by petitioner, but the CA denied the same;36 hence, this
petition assigning the alleged errors as follows:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN THE CASE
OF TOYOTA MOTOR PHILIPPINES CORPORATION VS. TOYOTA MOTOR PHILIPPINES
CORPORATION LABOR UNION (268 SCRA 573) DOES NOT APPLY IN THE CASE AT BAR
DESPITE THE [COMMINGLING] OF BOTH SUPERVISORY OR MANAGERIAL AND RANK-AND-
FILE EMPLOYEES IN THE RESPONDENT UNION;
II
THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING ALLOWING

THE CONDUCT OF CERTIFICATION ELECTION BY UPHOLDING THAT THE RESPONDENT
UNION REPRESENTED A BARGAINING UNIT DESPITE ITS OWN FINDINGS THAT THERE IS
NO MUTUALITY OF INTEREST BETWEEN THE MEMBERS OF RESPONDENT UNION
APPLYING THE TEST LAID DOWN IN THE CASE OF UNIVERSITY OF THE PHILIPPINES VS.
FERRER-CALLEJA (211 SCRA 451).37
We deny.
Petitioner claims that the CA contradicted the very definition of managerial and supervisory
employees under existing law and jurisprudence when it did not classify the vice-principals,
department head, and coordinators as managerial or supervisory employees merely because the
policies and guidelines they formulate are still subject to the review and evaluation of the principal or
executive officers of petitioner. It points out that the duties of the vice-principals, department head,
and coordinators include the evaluation and assessment of the effectiveness and capability of the
teachers under them; that such evaluation and assessment is independently made without the
participation of the higher Administration of petitioner; that the fact that their recommendation
undergoes the approval of the higher Administration does not take away the independent nature of
their judgment; and that it would be difficult for the vice-principals, department head, and
coordinators to objectively assess and evaluate the performances of teachers under them if they
would be allowed to be members of the same labor union.
On the other hand, aside from reiterating its previous submissions, private respondent cites Sections
9 and 1238 of Republic Act (R.A.) No. 9481 to buttress its contention that petitioner has no standing
to oppose the petition for certification election. On the basis of the statutory provisions, it reasons
that an employer is not a party-in-interest in a certification election; thus, petitioner does not have the
requisite right to protect even by way of restraining order or injunction.
First off, We cannot agree with private respondent’s invocation of R.A. No. 9481. Said law took effect
only on June 14, 2007; hence, its applicability is limited to labor representation cases filed on or after
said date.39 Instead, the law and rules in force at the time private respondent filed its petition for
certification election on May 31, 2002 are R.A. No. 6715, which amended Book V of Presidential
Decree (P.D.) No. 442 (the Labor Code), as amended, and the Rules and Regulations Implementing
R.A. No. 6715, as amended by D.O. No. 9, which was dated May 1, 1997 but took effect on June 21,
1997.40
However, note must be taken that even without the express provision of Section 12 of RA No. 9481,
the "Bystander Rule" is already well entrenched in this jurisdiction. It has been consistently held in a
number of cases that a certification election is the sole concern of the workers, except when the
employer itself has to file the petition pursuant to Article 259 of the Labor Code, as amended, but
even after such filing its role in the certification process ceases and becomes merely a
bystander.41 The employer clearly lacks the personality to dispute the election and has no right to
interfere at all therein.42 This is so since any uncalled-for concern on the part of the employer may
give rise to the suspicion that it is batting for a company union.43 Indeed, the demand of the law and
policy for an employer to take a strict, hands-off stance in certification elections is based on the
rationale that the employees’ bargaining representative should be chosen free from any extraneous
influence of the management; that, to be effective, the bargaining representative must owe its loyalty
to the employees alone and to no other.44
Now, going back to petitioner’s contention, the issue of whether a petition for certification election is
dismissible on the ground that the labor organization’s membership allegedly consists of supervisory
and rank-and-file employees is actually not a novel one. In the 2008 case of Republic v. Kawashima
Textile Mfg., Philippines, Inc.,45 wherein the employer-company moved to dismiss the petition for
certification election on the ground inter alia that the union membership is a mixture of rank-and-file
and supervisory employees, this Court had conscientiously discussed the applicability of Toyota and
Dunlop in the context of R.A. No. 6715 and D.O. No. 9, viz.:
It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited, to wit:
Sec. 3. Employees' right to self-organization. - Employees shall have the right to self-organization
and to form, join or assist labor organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of employees under their
supervision but may form separate organizations of their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the legitimacy of
the labor organization. Under Section 15, the only instance when a labor organization loses its
legitimacy is when it violates its duty to bargain collectively; but there is no word on whether such
mingling would also result in loss of legitimacy. Thus, when the issue of whether the membership of
two supervisory employees impairs the legitimacy of a rank-and-file labor organization came before
the Court En Banc in Lopez v. Chronicle Publication Employees Association, the majority
pronounced:
It may be observed that nothing is said of the effect of such ineligibility upon the union itself or on the
status of the other qualified members thereof should such prohibition be disregarded. Considering
that the law is specific where it intends to divest a legitimate labor union of any of the rights and
privileges granted to it by law, the absence of any provision on the effect of the disqualification of
one of its organizers upon the legality of the union, may be construed to confine the effect of such
ineligibility only upon the membership of the supervisor. In other words, the invalidity of membership
of one of the organizers does not make the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The
provision in the Labor Code closest to Sec. 3 is Article 290, which is deafeningly silent on the
prohibition against supervisory employees mingling with rank-and-file employees in one labor
organization. Even the Omnibus Rules Implementing Book V of the Labor Code (Omnibus Rules)
merely provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease operation. - All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code, cease to
operate as such and their registration certificates shall be deemed automatically cancelled.
However, existing collective agreements with such unions, the life of which extends beyond the date
of effectivity of the Code shall be respected until their expiry date insofar as the economic benefits
granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial employees shall
become eligible to join or assist the rank and file organization. The determination of who are
managerial employees and who are not shall be the subject of negotiation between representatives
of supervisory union and the employer. If no agreement s reached between the parties, either or
both of them may bring the issue to the nearest Regional Office for determination. (Emphasis
supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare in
Bulletin v. Sanchez that supervisory employees who do not fall under the category of managerial
employees may join or assist in the formation of a labor organization for rank-and-file employees, but
they may not form their own labor organization.
While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its implementing
rules continued to recognize the right of supervisory employees, who do not fall under the category
of managerial employees, to join a rank- and-file labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor
organization, viz.:
Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. Managerial employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-
file employees but may join, assist or form separate labor organizations of their own (Emphasis
supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any violation
of the prohibition would bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules)
which supplied the deficiency by introducing the following amendment to Rule II (Registration of
Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible
for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own; Provided, that those supervisory employees who are
included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715,
shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz.;
Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which
has jurisdiction over the principal office of the employer. The petition shall be in writing and under
oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit unless circumstances
otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file
employees shall not include supervisory employees and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered
labor organization from exercising its right to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing
Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file
and supervisory employees cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to
inquire into the composition of any labor organization whenever the status of the labor organization
is challenged on the basis of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names of at least twenty-
seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself
of its supervisory employee members, attain the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a petition for certification election. (Emphasis
supplied)
In Dunlop, in which the labor organization that filed a petition for certification election was one for
supervisory employees, but in which the membership included rank-and-file employees, the Court
reiterated that such labor organization had no legal right to file a certification election to represent a
bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its
members.
It should be emphasized that the petitions for certification election involved in Toyota and Dunlop
were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was
applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for certification
election indicate that the bargaining unit of rank-and-file employees has not been mingled with
supervisory employees - was removed. Instead, what the 1997 Amended Omnibus Rules requires is
a plain description of the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall
contain, among others, the following: x x x (c) The description of the bargaining unit."
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997
Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI,
to wit:
Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union
may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2)
copies of the following: a) a charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter; (b) the names of the local/chapter's officers, their
addresses, and the principal office of the local/chapter; and (c) the local/ chapter's constitution and
by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter submit a list of its
members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-
PTGWO in which the core issue was whether mingling affects the legitimacy of a labor organization
and its right to file a petition for certification election. This time, given the altered legal milieu, the
Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that
while there is a prohibition against the mingling of supervisory and rank-and-file employees in one
labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that
after a labor organization has been registered, it may exercise all the rights and privileges of a
legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation of its
registration, unless such mingling was brought about by misrepresentation, false statement or fraud
under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-
San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court
explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to
provide a list of its members, it would be improper for the DOLE to deny recognition to said local or
chapter on account of any question pertaining to its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a
petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file
labor organization on the ground of mixed membership: the Court therein reiterated its ruling in
Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds
for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the
tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the
rules.46
When a similar issue confronted this Court close to three years later, the above ruling was
substantially quoted in Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the
Philippines for Empowerment and Reforms (SMCC-Super) v. Charter Chemical and Coating
Corporation.47 In unequivocal terms, We reiterated that the alleged inclusionof supervisory
employees in a labor organization seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor organization.48
Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the instant case.
The petitions for certification election involved in Toyota and Dunlop were filed on November 26,
1992 and September 15, 1995, respectively; hence, the 1989 Rules and Regulations Implementing
R.A. No. 6715 (1989 Amended Omnibus Rules) was applied. In contrast, D.O. No. 9 is applicable in
the petition for certification election of private respondent as it was filed on May 31, 2002.
Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed that petitioner
cannot collaterally attack the legitimacy of private respondent by praying for the dismissal of the
petition for certification election:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition
for certification election; such proceeding is non-adversarial and merely investigative, for the
purpose thereof is to determine which organization will represent the employees in their collective
bargaining with the employer. The choice of their representative is the exclusive concern of the
employees; the employer cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere
allegation that some employees participating in a petition for certification election are actually
managerial employees will lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed thereof.
The amendments to the Labor Code and its implementing rules have buttressed that policy even
more.49
Further, the determination of whether union membership comprises managerial and/or supervisory
employees is a factual issue that is best left for resolution in the inclusion-exclusion proceedings,
which has not yet happened in this case so still premature to pass upon. We could only emphasize
the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters
within their jurisdiction, are generally accorded not only with respect but even finality by the courts
when supported by substantial evidence.50 Also, the jurisdiction of this Court in cases brought before
it from the CA via Rule 45 is generally limited to reviewing errors of law or jurisdiction. The findings
of fact of the CA are conclusive and binding. Except in certain recognized instances,51 We do not
entertain factual issues as it is not Our function to analyze or weigh evidence all over again; the
evaluation of facts is best left to the lower courts and administrative agencies/quasi-judicial bodies
which are better equipped for the task.52
Turning now to the second and last issue, petitioner argues that, in view of the improper mixture of
teaching and non-teaching personnel in private respondent due to the absence of mutuality of
interest among its members, the petition for certification election should have been dismissed on the
ground that private respondent is not qualified to file such petition for its failure to qualify as a
legitimate labor organization, the basic qualification of which is the representation of an appropriate
bargaining unit.
We disagree.
The concepts of a union and of a legitimate labor organization are different from, but related to, the
concept of a bargaining unit:
Article 212(g) of the Labor Code defines a labor organization as "any union or association of
employees which exists in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment." Upon compliance with all the
documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included in the roster of legitimate labor organizations.
Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration.53
In case of alleged inclusion of disqualified employees in a union, the proper procedure for an
employer like petitioner is to directly file a petition for cancellation of the union’s certificate of
registration due to misrepresentation, false statement or fraud under the circumstances enumerated
in Article 239 of the Labor Code, as amended.54 To reiterate, private respondent, having been validly
issued a certificate of registration, should be considered as having acquired juridical personality
which may not be attacked collaterally.
On the other hand, a bargaining unit has been defined as a "group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the collective
interests of all the employees, consistent with equity to the employer, indicated to be best suited to
serve reciprocal rights and duties of the parties under the collective bargaining provisions of the
law."55 In determining the proper collective bargaining unit and what unit would be appropriate to be
the collective bargaining agency, the Court, in the seminal case of Democratic Labor Association v.
Cebu Stevedoring Company, Inc.,56 mentioned several factors that should be considered, to wit: (1)
will of employees (Globe Doctrine); (2) affinity and unity of employees' interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as temporary, seasonal and probationary
employees. We stressed, however, that the test of the grouping is community or mutuality of interest,
because "the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights."57
As the SOLE correctly observed, petitioner failed to comprehend the full import of Our ruling in U.P.
It suffices to quote with approval the apt disposition of the SOLE when she denied petitioner’s
motion for reconsideration:
Petitioner likewise claimed that we erred in interpreting the decision of the Supreme Court in U.P. v.
Ferrer-Calleja, supra. According to petitioner, the Supreme Court stated that the non-academic rank-
andfile employees of the University of the Philippines shall constitute a bargaining unit to the
exclusion of the academic employees of the institution. Hence, petitioner argues, it sought the
creation of separate bargaining units, namely: (1) petitioner’s teaching personnel to the exclusion of
non-teaching personnel; and (2) petitioner’s non-teaching personnel to the exclusion of teaching
personnel.
Petitioner appears to have confused the concepts of membership in a bargaining unit and
membership in a union. In emphasizing the phrase "to the exclusion of academic employees" stated
in U.P. v. Ferrer-Calleja, petitioner believed that the petitioning union could not admit academic
employees of the university to its membership. But such was not the intention of the Supreme Court.
A bargaining unit is a group of employees sought to be represented by a petitioning union. Such

employees need not be members of a union seeking the conduct of a certification election. A union
certified as an exclusive bargaining agent represents not only its members but also other employees
who are not union members. As pointed out in our assailed Decision, there were two contending
unions in the U.P. case, namely, the Organization of Non-Academic Personnel of U.P. (ONAPUP)
and the All U.P. Worker’s Union composed of both U.P. academic and non-academic personnel.
ONAPUP sought the conduct of a certification election among the rank-and-file non-academic
personnel only, while the All U.P. Workers Union intended to cover all U.P. rank-and-file employees,
involving both academic and non-academic personnel.
The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to constitute a
bargaining unit to the exclusion of the academic employees of the institution", but did not order them
to organize a separate labor organization. In the U.P. case, the Supreme Court did not dismiss the
petition and affirmed the order for the conduct of a certification election among the non-academic
personnel of U.P., without prejudice to the right of the academic personnel to constitute a separate
bargaining unit for themselves and for the All U.P. Workers Union to institute a petition for
certification election.
In the same manner, the teaching and non-teaching personnel of petitioner school must form
separate bargaining units. Thus, the order for the conduct of two separate certification elections,
1âwphi1
one involving teaching personnel and the other involving non-teaching personnel. It should be
stressed that in the subject petition, private respondent union sought the conduct of a certification
election among all the rank-and-file personnel of petitioner school. Since the decision of the
Supreme Court in the U.P. case prohibits us from commingling teaching and non-teaching personnel
in one bargaining unit, they have to be separated into two separate bargaining units with two
separate certification elections to determine whether the employees in the respective bargaining
units desired to be represented by private respondent. In the U.P. case, only one certification
election among the non-academic personnel was ordered, because ONAPUP sought to represent
that bargaining unit only. No petition for certification election among the academic personnel was
instituted by All U.P. Workers Union in the said case; thus, no certification election pertaining to its
intended bargaining unit was ordered by the Court.58
Indeed, the purpose of a certification election is precisely to ascertain the majority of the employees’
choice of an appropriate bargaining unit – to be or not to be represented by a labor organization and,
if in the affirmative case, by which one.59
At this point, it is not amiss to stress once more that, as a rule, only questions of law may be raised
in a Rule 45 petition. In Montoya v. Transmed Manila Corporation,60 the Court discussed the
particular parameters of a Rule 45 appeal from the CA’s Rule 65 decision on a labor case, as
follows:
x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with
the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to
the review of questions of law raised against the assailed CA decision. In ruling for legal correctness,
we have to view the CA decision in the same context that the petition for certiorari it ruled upon was
presented to it; we have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not
on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the
NLRC decision challenged before it. This is the approach that should be basic in a Rule 45 review of
a CA ruling in a labor case. In question form, the question to ask is: Did the CA correctly determine
whether the NLRC committed grave abuse of discretion in ruling on the case?61
Our review is, therefore, limited to the determination of whether the CA correctly resolved the
presence or absence of grave abuse of discretion in the decision of the SOLE, not on the basis of
whether the latter's decision on the merits of the case was strictly correct. Whether the CA
committed grave abuse of discretion is not what is ruled upon but whether it correctly determined the
existence or want of grave abuse of discretion on the part of the SOLE.
WHEREFORE, the pet1t1on is DENIED. The April 18, 2007 Decision and July 31, 2007, Resolution
of the Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December 27, 2002 Decision
of the Secretary of the Department of Labor and Employment that set aside the
August 10, 2002 Decision of the Med-Arbiter denying private respondent's petition for certification
election are hereby AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
Chief Justice
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Concurring Opinion
ARTURO D. BRION
Associate Justice
Associate Justice
LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

I join J. Brion's concurring opinion.

MARTIN S. VILLARAMA, JR.
ROBERTO A. ABAD
Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

(no part)
ESTELA M. PERLAS-BERNABE
BIENVENIDO L. REYES*
Associate Justice
Associate Justice
MARVIC MARIO VICTOR F. LEONEN

Associate Justice
CERTIFICATION
of the Court.

Chief Justice
Footnotes
* No part.
1
Penned by Associate Justice Bienvenido L. Reyes (now a member of this Court), with
Associate Justices Portia Aliño Hormachuelos and Rosalinda Asuncion Vicente concurring;
rollo, pp. 11-19.
2
Id. at 9-10.
3
Id. at 116-119.
4
Id. at 140-142.
5
Id. at 101-104.
6
Id. at 76-77.
7
Id. at 78-80.
8
Id. at 81-85.
9
Id. at 86-92.
As amended by Section 18 of Republic Act No. 6715, Article 245 of the Labor Code now
10
provides:
supervisory employees. Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.
11
335 Phil. 1045 (1997).
12
360 Phil. 304 (1998).
13
355 Phil. 571 (1998).
14
See Comment to Petitioner’s Position Paper, rollo, pp. 93-100.
15
Section 11. Action on the petition. x x x
xxxx
II. The Med-Arbiter shall dismiss the petition on any of the following grounds:
(a) The petitioner is not listed by the Regional Office or Bureau in its registry
of legitimate labor organizations, or that its legal personality has been
revoked or cancelled with finality in accordance with Rule VIII of these Rules;
(b) The petition was filed before or after the freedom period of a duly
registered collective bargaining agreement; provided, that the sixty-day
freedom period based on the original collective bargaining agreement shall
not be affected by any amendment, extension or renewal of the collective
bargaining agreement;
(c) The petition was filed within one (1) year from a valid certification, consent
or run-off election and no appeal on the results is pending thereon, or from
recording of the fact of voluntary recognition with the Regional Office;
(d) A duly recognized or certified union has commenced negotiations with the
employer in accordance with Article 250 of the Code within the one-year
period referred to in Section 3, Rule XI of these Rules, or there exists a
bargaining deadlock which had been submitted to conciliation or arbitration or
had become the subject of a valid notice of strike or lockout to which an
incumbent or certified bargaining agent is a party;
(e) In case of an organized establishment, failure to submit the twenty-five

percent (25%) support requirement upon the filing of the petition; or
(f) Lack of interest or withdrawal on the part of the petitioner; provided, that
where a motion for intervention has been filed during the freedom period,
said motion shall be deemed and disposed of as an independent petition for
certification election if it complies with all the requisites for the filing of a
petition for certification election as prescribed in Section 4 of these Rules.
16
Section 2. Qualification of voters; inclusion-exclusion proceedings. - All employees who are
members of the appropriate bargaining unit sought to be represented by the petitioner at the
time of the certification or consent election shall be qualified to vote. A dismissed employee
whose dismissal is being contested in a pending case shall be allowed to vote in the
election.
In case of disagreement over the voters’ list or over the eligibility of voters, all
contested voters shall be allowed to vote. However, their votes shall be segregated
and sealed in individual envelopes in accordance with Section 9 of these Rules.
17
3 NLRB 294 (1937).
18
134 Phil. 168 (1968).
19
Rollo, pp. 103-104. (Emphasis in the original).
20
Id. at 118-119. (Emphasis in the original)
21
Id. at 120-139.
22
CA rollo, pp. 2-32.
23
Id. at 111.
24
Id. at 112-122.
25
Id. at 128-141.
26
Id. at 142-153.
27
Id. at 155-156.
28
Id. at 176-178.
29
Id. at 180-181.
30
Id. at 182-197.
31
Id. at 199.
32
Id. at 209-241.
33
Id. at 249-250.
34
G.R. No. 96189, July 14, 1992, 211 SCRA 451.
35
36
Id. at 286-287
37
Rollo, p. 37.
Sections 9 and 12 of Republic Act No. 9481 ("An Act Strengthening the Workers'
38
Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No.
442, As Amended, Otherwise Known as the Labor Code of the Philippines") provide:
SEC. 9. A new provision, Article 245-A is inserted into the Labor Code to read as
follows:
ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining

Unit. - The inclusion as union members of employees outside the bargaining unit
shall not be a ground for the cancellation of the registration of the union. Said
employees are automatically deemed removed from the list of membership of said
union.
SEC. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to
read as follows:
ART. 258-A. Employer as Bystander. - In all cases, whether the petition for
certification election is filed by an employer or a legitimate labor organization, the
employer shall not be considered a party thereto with a concomitant right to oppose a
petition for certification election. The employer's participation in such proceedings
shall be limited to: (1) being notified or informed of petitions of such nature; and (2)
submitting the list of employees during the pre-election conference should the Med-
Arbiter act favorably on the petition.
Republic v. Kawashima Textile Mfg., Philippines, Inc., G.R. No. 160352, July 23, 2008, 559
39
SCRA 386, 396.
40
See Republic v. Kawashima Textile Mfg., Philippines, Inc., supra, at 397.
Divine Word University of Tacloban v. Secretary of Labor and Employment, G.R. No.
41
91915, September 11, 1992, 213 SCRA 759, 770 and Trade Unions of the Philippines and
Allied Services v. Trajano, 205 Phil. 41, 43 (1983), as cited in Belyca Corporation v. Ferrer-
Calleja, 250 Phil. 193, 204 (1988).
Barbizon Philippines, Inc. v. Nagkakaisang Supervisor ng Barbizon Philippines, Inc.-
42
NAFLU, 330 Phil. 472, 492 (1996) and Philippine Fruits and Vegetable Industries, Inc. v.
Torres, G.R. No. 92391, July 3, 1992, 211 SCRA 95, 103.
Divine Word University of Tacloban v. Secretary of Labor and Employment, supra note 41,
43
at 770-771.
San Miguel Foods, Incorporated v. San Miguel Corporation Supervisors and Exempt
44
Union, G.R. No. 146206, August 1, 2011, 655 SCRA 1.
45
Supra note 39.
Republic v. Kawashima Textile Mfg., Philippines, Inc., supra note 39, at 399-407.
46
(Emphasis supplied; citations omitted)
47
G.R. No. 169717, March 16, 2011, 645 SCRA 538.
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for

48
Empowerment and Reforms (SMCC-Super) v. Charter Chemical and Coating Corporation,

supra, at 540.
Republic v. Kawashima Textile Mfg., Philippines, Inc., supra note 39, at 408 and
49
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for

Empowerment and Reforms (SMCC-Super) v. Charter Chemical and Coating Corporation,
supra note 47, at 557-558. (Citations omitted)
Julie's Bakeshop v. Arnaiz, G.R. No. 173882, February 15, 2012, 666 SCRA 101, 113-114;
50
Philippine Veterans Bank v. NLRC, G.R. No.188882, March 30, 2010, 617 SCRA 204, 212;
and Merck Sharp and Dohme (Philippines) v. Robles, G.R. No. 176506, November 25, 2009,
605 SCRA 488, 494.
See Galang v. Malasugui, G.R. No. 174173, March 7, 2012, 667 SCRA 622, 631-632;
51
Pharmacia and Upjohn, Inc. v. Albayda, Jr., G.R. No. 172724, August 23, 2010, 628 SCRA
544, 557; and Merck Sharp and Dohme (Philippines) v. Robles, supra.
See Dimagan v. Dacworks United, Incorporated, G.R. No. 191053, November 28, 2011,
52
661 SCRA 438, 445 and Pharmacia and Upjohn, Inc. v. Albayda, Jr., supra.
Sta. Lucia East Commercial Corporation, v. Secretary of Labor and Employment, G.R. No.
53
162355, August 14, 2009, 596 SCRA 92, 100.
54
Id. at 102.
Belyca Corporation v. Ferrer- Calleja, supra note 41, at 199, citing Rothenberg in Labor
55
Relations, p. 482.
56
103 Phil. 1103, 1104 (1958), citing Rothenberg in Labor Relations, pp. 482-510.
57
Id.
58
Rollo, p. 141.
DHL Philippines Corporation United Rank and File Asso.-Federation of Free Workers
59
(DHLURFA-FFW) v. Buklod ng Manggagawa ng DHL Philippines Corporation; 478 Phil. 842,

858 (2004), and UST Faculty Union v. Bitonio Jr., 376 Phil. 294, 307 (1999).
G.R. No. 183329, August 27, 2009, 597 SCRA 334. See also Career Philippines
60
Shipmanagement, Inc. v. Serna, G.R. No. 172086, December 3, 2012, 686 SCRA 676, 684;
Gonzales v.Solid Cement Corporation, G.R. No. 198423, October 23, 2012, 684 SCRA 344,
359-360; Niña Jewelry Manufacturing of Metal Arts, Inc. v. Montecillo, G.R. No. 188169,
November 28, 2011, 661 SCRA 416, 430; and Phimco Industries, Inc. v. Phimco Industries
Labor Association (PILA), G.R. No. 170830, August 11, 2010, 628 SCRA 119, 132.
61
Montoya v. Transmed Manila Corporation, supra, at 342-343. (Citations omitted; emphasis
in the original).

SUPREME COURT
Manila
G.R. No. 181531 July 31, 2009
NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES-

MANILA PAVILION HOTEL CHAPTER, Petitioner,
vs.
SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY
INN MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL
CORPORATION, Respondents.
DECISION
CARPIO MORALES, J.:
National Union of Workers in Hotels, Restaurants and Allied Industries – Manila Pavilion Hotel
Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of Appeals
November 8, 2007 Decision1 and of the Secretary of Labor and Employment’s January 25, 2008
Resolution2 in OS-A-9-52-05 which affirmed the Med-Arbiter’s Resolutions dated January 22,
20073 and March 22, 2007.4
A certification election was conducted on June 16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS’ LIST = 353

TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-
MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the
case back to Med-Arbiter Ma. Simonette Calabocal to decide which among those votes would be
opened and tallied. Eleven (11) votes were initially segregated because they were cast
by dismissed employees, albeit the legality of their dismissal was still pending before the Court of
Appeals. Six other votes were segregated because the employees who cast them were already
occupying supervisory positions at the time of the election. Still five other votes were segregated on
the ground that they were cast by probationary employees and, pursuant to the existing Collective
Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on, however, that
the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the 22
segregated votes, specially those cast by the 11 dismissed employees and those cast by the six
supposedly supervisory employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE),
arguing that the votes of the probationary employees should have been opened considering that
probationary employee Gatbonton’s vote was tallied. And petitioner averred that respondent
HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent,
as the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 +
169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote short of the
majority which would then become 169.
By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE),
through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiter’s Order. It held that
pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion and
inclusion of voters in a certification election, the probationary employees cannot vote, as at the time
the Med-Arbiter issued on August 9, 2005 the Order granting the petition for the conduct of the
certification election, the six probationary employees were not yet hired, hence, they could not vote.
The SOLE further held that, with respect to the votes cast by the 11 dismissed employees, they
could be considered since their dismissal was still pending appeal.
As to the votes cast by the six alleged supervisory employees, the SOLE held that their votes should
be counted since their promotion took effect months after the issuance of the above-said August 9,
2005 Order of the Med-Arbiter, hence, they were still considered as rank-and-file.
Respecting Gatbonton’s vote, the SOLE ruled that the same could be the basis to include the votes
of the other probationary employees, as the records show that during the pre-election conferences,
there was no disagreement as to his inclusion in the voters’ list, and neither was it timely challenged
when he voted on election day, hence, the Election Officer could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the dismissed and supervisory employees were
to be counted and presumed to be in favor of petitioner, still, the same would not suffice to overturn
the 169 votes garnered by HIMPHLU.
In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was
proper.
Petitioner’s motion for reconsideration having been denied by the SOLE by Resolution of March 22,
2007, it appealed to the Court of Appeals.
By the assailed Decision promulgated on November 8, 2007, the appellate court affirmed the ruling
of the SOLE. It held that, contrary to petitioner’s assertion, the ruling in Airtime Specialist, Inc. v.
Ferrer Calleja5 stating that in a certification election, all rank-and-file employees in the appropriate
bargaining unit, whether probationary or permanent, are entitled to vote, is inapplicable to the case
at bar. For, the appellate court continued, the six probationary employees were not yet employed by
the Hotel at the time the August 9, 2005 Order granting the certification election was issued. It thus
held that Airtime Specialist applies only to situations wherein the probationary employees
were already employed as of the date of filing of the petition for certification election.
Respecting Gatbonton’s vote, the appellate court upheld the SOLE’s finding that since it was not
properly challenged, its inclusion could no longer be questioned, nor could it be made the basis to
include the votes of the six probationary employees.
The appellate court brushed aside petitioner’s contention that the opening of the 17 segregated
votes would materially affect the results of the election as there would be the likelihood of a run-off
election in the event none of the contending unions receive a majority of the valid votes cast. It held
that the "majority" contemplated in deciding which of the unions in a certification election is the
winner refers to the majority of valid votes cast, not the simple majority of votes cast, hence, the
SOLE was correct in ruling that even if the 17 votes were in favor of petitioner, it would still be
insufficient to overturn the results of the certification election.
Petitioner’s motion for reconsideration having been denied by Resolution of January 25, 2008, the
present recourse was filed.
Petitioner’s contentions may be summarized as follows:
1. Inclusion of Jose Gatbonton’s vote but excluding the vote of the six other probationary
employees violated the principle of equal protection and is not in accord with the ruling in
Airtime Specialists, Inc. v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when the probationary employees can
be allowed to vote is not August 9, 2005 – the date of issuance by Med-Arbiter Calabocal of
the Order granting the conduct of certification elections, but March 10, 2006 – the date the
SOLE Order affirmed the Med-Arbiter’s Order.
3. Even if the votes of the six probationary employees were included, still, HIMPHLU could
not be considered as having obtained a majority of the valid votes cast as the opening of the
17 ballots would increase the number of valid votes from 321 to 338, hence, for HIMPHLU to
be certified as the exclusive bargaining agent, it should have garnered at least 170, not 169,
votes.
Petitioner justifies its not challenging Gatbonton’s vote because it was precisely its position that
probationary employees should be allowed to vote. It thus avers that justice and equity dictate that
since Gatbonton’s vote was counted, then the votes of the 6 other probationary employees should
likewise be included in the tally.
Petitioner goes on to posit that the word "order" in Section 5, Rule 9 of Department Order No. 40-03
reading "[A]ll employees who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the issuance of the order granting the conduct of
certification election shall be allowed to vote" refers to an order which has already become final and
executory, in this case the March 10, 2002 Order of the SOLE.
Petitioner thus concludes that if March 10, 2006 is the reckoning date for the determination of the
eligibility of workers, then all the segregated votes cast by the probationary employees should be
opened and counted, they having already been working at the Hotel on such date.
Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner argues that
the same was not proper for if the 17 votes would be counted as valid, then the total number of votes
cast would have been 338, not 321, hence, the majority would be 170; as such, the votes garnered
by HIMPHLU is one vote short of the majority for it to be certified as the exclusive bargaining agent.
The relevant issues for resolution then are first, whether employees on probationary status at the
time of the certification elections should be allowed to vote, and second, whether HIMPHLU was
able to obtain the required majority for it to be certified as the exclusive bargaining agent.
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbonton’s vote was proper not because it was not questioned but because
probationary employees have the right to vote in a certification election. The votes of the six other
probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-
Calleja holds:
In a certification election, all rank and file employees in the appropriate bargaining unit, whether
probationary or permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor
Code which states that the "labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the exclusive representative of the employees
in such unit for purposes of collective bargaining." Collective bargaining covers all aspects of the
employment relation and the resultant CBA negotiated by the certified union binds all employees in
the bargaining unit. Hence, all rank and file employees, probationary or permanent, have a
substantial interest in the selection of the bargaining representative. The Code makes no distinction
as to their employment status as basis for eligibility in supporting the petition for certification election.
The law refers to "all" the employees in the bargaining unit. All they need to be eligible to support the
petition is to belong to the "bargaining unit." (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the
Omnibus Rules Implementing the Labor Code, provides:
Rule II
Section 2. Who may join labor unions and workers' associations. - All persons employed in
commercial, industrial and agricultural enterprises, including employees of government owned or
controlled corporations without original charters established under the Corporation Code, as well as
employees of religious, charitable, medical or educational institutions whether operating for profit or
not, shall have the right to self-organization and to form, join or assist labor unions for purposes of
collective bargaining: provided, however, that supervisory employees shall not be eligible for
membership in a labor union of the rank-and-file employees but may form, join or assist separate
labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor
unions for purposes of collective bargaining. Alien employees with valid working permits issued by
the Department may exercise the right to self-organization and join or assist labor unions for
purposes of collective bargaining if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite period or not, shall
beginning on the first day of his/her service, be eligible for membership in any labor organization.
All other workers, including ambulant, intermittent and other workers, the self-employed, rural
workers and those without any definite employers may form labor organizations for their mutual aid
and protection and other legitimate purposes except collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot override the
Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor
Code and its Implementing Rules on certification elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or public policy.6
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support their
position that probationary employees hired after the issuance of the Order granting the petition for
the conduct of certification election must be excluded, should not be read in isolation and must be
harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-03, viz:
Rule XI
xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members of the
appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of
the order granting the conduct of a certification election shall be eligible to vote. An employee who
has been dismissed from work but has contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification
election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final
judgment at the time of the conduct of the certification election. (Emphasis supplied)
xxxx
Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last hearing,
the Med-Arbiter shall issue a formal order granting the petition or a decision denying the same. In
organized establishments, however, no order or decision shall be issued by the Med-Arbiter during
the freedom period.
The order granting the conduct of a certification election shall state the following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for dismissal enumerated in the succeeding
paragraph exists;
(d) the names of contending labor unions which shall appear as follows: petitioner union/s in
the order in which their petitions were filed, forced intervenor, and no union; and
(e) a directive upon the employer and the contending union(s) to submit within ten (10) days
from receipt of the order, the certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit for the last three (3)
months prior to the issuance of the order. (Emphasis supplied)
xxxx
Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from receipt of the
entire records of the petition within which to decide the appeal. The filing of the memorandum of
appeal from the order or decision of the Med-Arbiter stays the holding of any certification election.
The decision of the Secretary shall become final and executory after ten (10) days from receipt
thereof by the parties. No motion for reconsideration of the decision shall be entertained. (Emphasis
supplied)
In light of the immediately-quoted provisions, and prescinding from the principle that all employees
are, from the first day of their employment, eligible for membership in a labor organization, it is
evident that the period of reckoning in determining who shall be included in the list of eligible voters
is, in cases where a timely appeal has been filed from the Order of the Med-
Arbiter, the date when the Order of the Secretary of Labor and Employment,
whether affirming or denying the appeal, becomes final and executory.
The filing of an appeal to the SOLE from the Med-Arbiter’s Order stays its execution, in accordance
with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the
list of eligible voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire additional employees. To exclude the
employees hired after the issuance of the Med-Arbiter’s Order but before the appeal has been
resolved would violate the guarantee that every employee has the right to be part of a labor
organization from the first day of their service.
In the present case, records show that the probationary employees, including Gatbonton, were
included in the list of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in
compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for
reconsideration have been denied by the SOLE, rendering the Med-Arbiter’s August 22, 2005 Order
final and executory 10 days after the March 22, 2007 Resolution (denying the motion for
reconsideration of the January 22 Order denying the appeal), and rightly so. Because, for purposes
of self-organization, those employees are, in light of the discussion above, deemed eligible to vote.
A certification election is the process of determining the sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit for purposes of collective bargaining. Collective
bargaining, refers to the negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and conditions of employment in a
bargaining unit.7
The significance of an employee’s right to vote in a certification election cannot thus be

overemphasized. For he has considerable interest in the determination of who shall represent him in
negotiating the terms and conditions of his employment.
Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the
Med-Arbiter, experience shows that it sometimes takes months to be resolved. To rule then that only
those employees hired as of the date of the issuance of the Med-Arbiter’s Order are qualified to vote
would effectively disenfranchise employees hired during the pendency of the appeal. More
importantly, reckoning the date of the issuance of the Med-Arbiter’s Order as the cut-off date would
render inutile the remedy of appeal to the SOLE. 1avvph!1
But while the Court rules that the votes of all the probationary employees should be included, under
the particular circumstances of this case and the period of time which it took for the appeal to be
decided, the votes of the six supervisory employees must be excluded because at the time the
certification elections was conducted, they had ceased to be part of the rank and file, their promotion
having taken effect two months before the election.
As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the
negative. It is well-settled that under the so-called "double majority rule," for there to be a valid
certification election, majority of the bargaining unit must have voted AND the winning union must
have garnered majority of the valid votes cast.
Prescinding from the Court’s ruling that all the probationary employees’ votes should be deemed
valid votes while that of the supervisory employees should be excluded, it follows that the number of
valid votes cast would increase – from 321 to 337. Under Art. 256 of the Labor Code, the union
obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole and
exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50%
+ 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to
obtain a majority vote. The position of both the SOLE and the appellate court that the opening of the
17 segregated ballots will not materially affect the outcome of the certification election as for, so they
contend, even if such member were all in favor of petitioner, still, HIMPHLU would win, is thus
untenable.
It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to
serve as basis for computing the required majority, and not just to determine which union won the
elections. The opening of the segregated but valid votes has thus become material. To be sure, the
conduct of a certification election has a two-fold objective: to determine the appropriate bargaining
unit and to ascertain the majority representation of the bargaining representative, if the employees
desire to be represented at all by anyone. It is not simply the determination of who between two or
more contending unions won, but whether it effectively ascertains the will of the members of the
bargaining unit as to whether they want to be represented and which union they want to represent
them.
Having declared that no choice in the certification election conducted obtained the required majority,
it follows that a run-off election must be held to determine which between HIMPHLU and petitioner
should represent the rank-and-file employees.
A run-off election refers to an election between the labor unions receiving the two (2) highest number
of votes in a certification or consent election with three (3) or more choices, where such a certified or
consent election results in none of the three (3) or more choices receiving the majority of the valid
votes cast; provided that the total number of votes for all contending unions is at least fifty percent
(50%) of the number of votes cast.8 With 346 votes cast, 337 of which are now deemed valid and
HIMPHLU having only garnered 169 and petitioner having obtained 151 and the choice "NO UNION"
receiving 1 vote, then the holding of a run-off election between HIMPHLU and petitioner is in order.
WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution
dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007
and March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are
ANNULLED and SET ASIDE.
The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the
holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants
and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn
Manila Pavilion Hotel Labor Union (HIMPHLU).
SO ORDERED.
CONCHITA CARPIO MORALES

Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
MINITA V. CHICO NAZARIO* TERESITA J. LEONARDO-DE CASTRO**

DIOSDADO M. PERALTA***
Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I
certify that the conclusions in the above decision had been reached in consultation before the case
REYNATO S. PUNO
Chief Justice
Footnotes
* Additional member per Special Order No. 658.
** Additional member per Special Order No. 635.
*** Additional member per Special Order No. 664.
1
CA rollo, pp. 194-203. Penned by Associate Justice Remedios A. Salazar Fernando and
concurred in by Associate Justices Rosalinda Asuncion Vicente and Enrico A. Lanzanas..
2
Id. at 237-238. Penned by Associate Justice Remedios A. Salazar Fernando and concurred
in by Associate Justices Rosalinda Asuncion Vicente and Enrico A. Lanzanas.
3
Id. at 19-23.
4
Id. at 24-25.
5
180 SCRA 749
6
Civil Code, Art. 1306.
7
Honda Phils, Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561,
June 15, 2005, 460 SCRA 186.
8
Department Order No. 40-03, series of 2003.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 85333 February 26, 1990
CARMELITO L. PALACOL, ET AL., petitioners,

vs.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES
FORCE UNION, and COCA-COLA BOTTLERS (PHILIPPINES), INC., respondents.
Wellington B. Lachica for petitioners.
Adolpho M. Guerzon for respondent Union.
GANCAYCO, J.:
Can a special assessment be validly deducted by a labor union from the lump-sum pay of its
members, granted under a collective bargaining agreement (CBA), notwithstanding a subsequent
disauthorization of the same by a majority of the union members? This is the main issue for
resolution in the instant petition for certiorari.
As gleaned from the records of the case, the pertinent facts are as follows:
On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as
the Union), as the collective bargaining agent of all regular salesmen, regular helpers, and relief
helpers of the Manila Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers
(Philippines), Inc. (hereinafter referred to as the Company) concluded a new collective bargaining
agreement with the latter. Among the compensation benefits granted to the employees was a
1
general salary increase to be given in lump sum including recomputation of actual commissions
earned based on the new rates of increase.
On the same day, the president of the Union submitted to the Company the ratification by the union
members of the new CBA and authorization for the Company to deduct union dues equivalent to
P10.00 every payday or P20.00 every month and, in addition, 10% by way of special assessment,
from the CBA lump-sum pay granted to the union members. The last one among the aforementioned
is the subject of the instant petition.
As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the
special assessment sought to be levied is "to put up a cooperative and credit union; purchase
vehicles and other items needed for the benefit of the officers and the general membership; and for
the payment for services rendered by union officers, consultants and others." There was also an
2
additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent
Union President."
This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum
held in separate local membership meetings on various dates. The total membership of the Union
3
was about 800. Of this number, 672 members originally authorized the 10% special assessment,
while 173 opposed the same. 4
Subsequently however, one hundred seventy (170) members of the Union submitted documents to
the Company stating that although they have ratified the new CBA, they are withdrawing or
disauthorizing the deduction of any amount from their CBA lump sum. Later, 185 other union
members submitted similar documents expressing the same intent. These members, numbering 355
in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of disauthorization
for the special assessment, with a total of 528 objectors and a remainder of 272 supporters. 5
On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom

to remit the payment of the questioned amount, filed an action for interpleader with the Bureau of
Labor Relations in order to resolve the conflicting claims of the parties concerned. Petitioners, who
are regular rank-and-file employees of the Company and bona fide members of the Union, filed a
motion/complaint for intervention therein in two groups of 161 and 94, respectively. They claimed to
be among those union members who either did not sign any individual written authorization, or
having signed one, subsequently withdrew or retracted their signatures therefrom.
Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article
222(b) of the Labor Code. Article 222(b) provides as follows:
ART. 222. Appearances and Fees. —

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

arising from any collective bargaining negotiations or conclusion of
the collective agreement shall be imposed on any individual member
of the contracting union; Provided, however, that attorney's fees may
be charged against union funds in an amount to be agreed upon by
the parties. Any contract, agreement or arrangement of any sort to
the contrary shall be null and void.
On the other hand, Article 241(o) mandates that:
ART. 241. Rights and conditions of membership in a labor organization. —
xxx xxx xxx
(o) Other than for mandatory activities under the Code, no special
assessments, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed by
the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction;
As authority for their contention, petitioners cited Galvadores v. Trajano, wherein it was ruled that
6
no check-offs from any amount due employees may be effected without individual written
authorizations duly signed by the employees specifically stating the amount, purpose, and
beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have the popular indorsement and
approval of the general membership, but likewise complied with the legal requirements of Article 241
(n) and (o) of the Labor Code in that the board resolution of the Union imposing the questioned
special assessment had been duly approved in a general membership meeting and that the
collection of a special fund for labor education and research is mandated.
Article 241(n) of the Labor Code states that —
ART. 241. Rights and conditions of membership in a labor organization. —
xxx xxx xxx
(n) No special assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written resolution of a
majority of all the members at a general membership meeting duly called for the
purpose. The secretary of the organization shall record the minutes of the meeting
including the list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessments or fees. The record shall
be attested to by the president;
Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988
whereby he directed the Company to remit the amount it had kept in trust directly to the rank-and-file
personnel without delay.
On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed
and set aside by the respondent-Director in a resolution dated August 19, 1988 upholding the claim
of the Union that the special assessment is authorized under Article 241 (n) of the Labor Code, and
that the Union has complied with the requirements therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to
lack or excess of jurisdiction when she held Article 241 (n) of the Labor Code to be the applicable
provision instead of Article 222(b) in relation to Article 241(o) of the same law.
According to petitioners, a cursory examination and comparison of the two provisions of Article 241
reveals that paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a special
assessment is not a matter of major policy affecting the entire union membership but is one which
concerns the individual rights of union members.
Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph
(o), the Union has nevertheless failed to comply with the procedure to legitimize the questioned
special assessment by: (1) presenting mere minutes of local membership meetings instead of a
written resolution; (2) failing to call a general membership meeting; (3) having the minutes of three
(3) local membership meetings recorded by a union director, and not by the union secretary as
required; (4) failing to have the list of members present included in the minutes of the meetings; and
(5) failing to present a record of the votes cast. Petitioners concluded their argument by
7
citing Galvadores.
After a careful review of the records of this case, We are convinced that the deduction of the 10%
special assessment by the Union was not made in accordance with the requirements provided by
law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the
instant case. The principle "that employees are protected by law from unwarranted practices that
diminish their compensation without their known edge and consent" is in accord with the
8
constitutional principle of the State affording full protection to labor.

9
The respondent-Union brushed aside the defects pointed out by petitioners in the manner of
compliance with the legal requirements as "insignificant technicalities." On the contrary, the failure of
the Union to comply strictly with the requirements set out by the law invalidates the questioned
special assessment. Substantial compliance is not enough in view of the fact that the special
assessment will diminish the compensation of the union members. Their express consent is
required, and this consent must be obtained in accordance with the steps outlined by law, which
must be followed to the letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of
Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special
assessment. Both provisions must be complied with. Under paragraph (n), the Union must submit to
the Company a written resolution of a majority of all the members at a general membership meeting
duly called for the purpose. In addition, the secretary of the organization must record the minutes of
the meeting which, in turn, must include, among others, the list of all the members present as well as
the votes cast.
As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of
paragraph (n). It held local membership meetings on separate occasions, on different dates and at
various venues, contrary to the express requirement that there must be a general membership
meeting. The contention of the Union that "the local membership meetings are precisely the very
general meetings required by law" is untenable because the law would not have specified a
10
general membership meeting had the legislative intent been to allow local meetings in lieu of the
latter.
It submitted only minutes of the local membership meetings when what is required is a written
resolution adopted at the general meeting. Worse still, the minutes of three of those local meetings
held were recorded by a union director and not by the union secretary. The minutes submitted to the
Company contained no list of the members present and no record of the votes cast. Since it is quite
evident that the Union did not comply with the law at every turn, the only conclusion that may be
made therefrom is that there was no valid levy of the special assessment pursuant to paragraph (n)
of Article 241 of the Labor Code.
Paragraph (o) on the other hand requires an individual written authorization duly signed by every
employee in order that a special assessment may be validly checked-off. Even assuming that the
special assessment was validly levied pursuant to paragraph (n), and granting that individual written
authorizations were obtained by the Union, nevertheless there can be no valid check-off considering
that the majority of the union members had already withdrawn their individual authorizations. A
withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the ruling
in Galvadores that "no check-offs from any amounts due employees may be effected without an
individual written authorization signed by the employees ... " is applicable.
The Union points out, however, that said disauthorizations are not valid for being collective in form,
as they are "mere bunches of randomly procured signatures, under loose sheets of paper." The 11
contention deserves no merit for the simple reason that the documents containing the
disauthorizations have the signatures of the union members. The Court finds these retractions to be
valid. There is nothing in the law which requires that the disauthorization must be in individual form.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions
of the Labor Code ... shall be resolved in favor of labor." And as previously stated, labor in this case
12
refers to the union members, as employees of the Company. Their mere desire to establish a
separate bargaining unit, albeit unproven, cannot be construed against them in relation to the legality
of the questioned special assessment. On the contrary, the same may even be taken to reflect their
dissatisfaction with their bargaining representative, the respondent-Union, as shown by the
circumstances of the instant petition, and with good reason.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected considering they
are the ones directly affected and the realities of the high standards of survival
nowadays. To ignore the mandate of the rank and file would enure to destabilizing
industrial peace and harmony within the rank and file and the employer's fold, which
we cannot countenance.
Moreover, it will be recalled that precisely union dues are collected from the union
members to be spent for the purposes alluded to by respondent. There is no reason
shown that the regular union dues being now implemented is not sufficient for the
alleged expenses. Furthermore, the rank and file have spoken in withdrawing their
consent to the special assessment, believing that their regular union dues are
adequate for the purposes stated by the respondent. Thus, the rank and file having
spoken and, as we have earlier mentioned, their sentiments should be respected.
Of the stated purposes of the special assessment, as embodied in the board resolution of the Union,
only the collection of a special fund for labor and education research is mandated, as correctly
pointed out by the Union. The two other purposes, namely, the purchase of vehicles and other items
for the benefit of the union officers and the general membership, and the payment of services
rendered by union officers, consultants and others, should be supported by the regular union dues,
there being no showing that the latter are not sufficient to cover the same.
The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of
the Labor Code. The contention is impressed with merit. Article 222 (b) prohibits attorney's fees,
negotiations fees and similar charges arising out of the conclusion of a collective bargaining
agreement from being imposed on any individual union member. The collection of the special
assessment partly for the payment for services rendered by union officers, consultants and others
may not be in the category of "attorney's fees or negotiations fees." But there is no question that it is
an exaction which falls within the category of a "similar charge," and, therefore, within the coverage
of the prohibition in the aforementioned article. There is an additional proviso giving the Union
President unlimited discretion to allocate the proceeds of the special assessment. Such a proviso
may open the door to abuse by the officers of the Union considering that the total amount of the
special assessment is quite considerable — P1,027,694.33 collected from those union members
who originally authorized the deduction, and P1,267,863.39 from those who did not authorize the
same, or subsequently retracted their authorizations. The former amount had already been
13
remitted to the Union, while the latter is being held in trust by the Company.
The Court, therefore, stakes down the questioned special assessment for being a violation of Article
241, paragraphs (n) and (o), and Article 222 (b) of the Labor Code.
WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of
Labor Relations dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order of
the Med-Arbiter dated February 17, 1988 is reinstated, and the respondent Coca-Cola Bottlers
(Philippines), Inc. is hereby ordered to immediately remit the amount of P1,267,863.39 to the
respective union members from whom the said amount was withheld. No pronouncement as to
costs. This decision is immediately executory.
SO ORDERED.
Narvasa, Griño-Aquino and Medialdea, JJ., concur.
Cruz, J., took no part.
Footnotes
1 Page 4, Rollo.
2 Page 10, Rollo.
3 Page 96, Rollo.
4 Page 34, Rollo.
5 Page 35, Rollo.

6 144 SCRA 138 (1986).
7 Page 12, Rollo.
8 Emphasis supplied.
9 Section 3, Article XIII, 1987 Constitution.
10 Page 105, Rollo.
11 Pages 108-109, Rollo.
12 Article 4, Labor Code.
13 Page 5, Rollo.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 170112 April 30, 2008
DEL PILAR ACADEMY, EDUARDO ESPEJO and ELISEO OCAMPO, JR., petitioners,

vs.
DEL PILAR ACADEMY EMPLOYEES UNION, respondents.
DECISION
NACHURA, J.:
Before this Court is a petition for review on certiorari assailing the July 19, 2005 Decision1 of the
Court of Appeals (CA) in CA-G.R. SP. No. 86868, and its September 28, 2005 Resolution2 denying
the motion for reconsideration.
Following are the factual antecedents.
Respondent Del Pilar Academy Employees Union (the UNION) is the certified collective bargaining
representative of teaching and non-teaching personnel of petitioner Del Pilar Academy (DEL PILAR),
an educational institution operating in Imus, Cavite.
On September 15, 1994, the UNION and DEL PILAR entered into a Collective Bargaining
Agreement (CBA)3 granting salary increase and other benefits to the teaching and non-teaching
staff. Among the salient provisions of the CBA are:
ARTICLE V
SALARY INCREASE
SECTION 1. Basic Pay – the ACADEMY and the UNION agreed to maintain the wage
increase in absolute amount as programmed in the computation prepared by the ACADEMY
and dated 30 June 1994 initialed by the members of the bargaining panel of both parties,
taking into account increases in tuition fees, if any.
SECTION 2. The teaching load of teachers shall only be Twenty-Three (23) hours per week
effective this school year and any excess thereon shall be considered as overload with pay.
SECTION 3. Overloadpay (sic) will be based on the Teachers’ Basic Monthly Rate.
SECTION 4. The ACADEMY agrees to grant longevity pay as follows: P100.00 for every 5
years of continuous service. The longevity shall be integrated in the basic salary within three
(3) years from the effectivity of this agreement.
ARTICLE VI
VACATION LEAVE WITH PAY
SECTION 1. Every faculty member who has rendered at least six (6) consecutive academic
semester of service shall be entitled to the 11th month and 12th month pay as summer
vacation leave with pay. They may, however, be required to report [and] undergo briefings or
seminars in connection with their teaching assignments for the ensuing school year.
SECTION 2. Non-teaching employees who shall have rendered at least one (1) year of
service shall be entitled to fifteen days leave with pay.
The UNION then assessed agency fees from non-union employees, and requested DEL PILAR to
deduct said assessment from the employees’ salaries and wages. DEL PILAR, however, refused to
effect deductions claiming that the non-union employees were not amenable to it.
In September 1997, the UNION negotiated for the renewal of the CBA. DEL PILAR, however,
refused to renew the same unless the provision regarding entitlement to two (2) months summer
vacation leave with pay will be amended by limiting the same to teachers, who have rendered at
least three (3) consecutive academic years of satisfactory service. The UNION objected to the
proposal claiming diminution of benefits. DEL PILAR refused to sign the CBA, resulting in a
deadlock. The UNION requested DEL PILAR to submit the case for voluntary arbitration, but the
latter allegedly refused, prompting the UNION to file a case for unfair labor practice with the Labor
Arbiter against DEL PILAR; Eduardo Espejo, its president; and Eliseo Ocampo, Jr., chairman of the
Board of Trustees.
Traversing the complaint, DEL PILAR denied committing unfair labor practices against the UNION. It
justified the non-deduction of the agency fees by the absence of individual check off authorization
from the non-union employees. As regards the proposal to amend the provision on summer vacation
leave with pay, DEL PILAR alleged that the proposal cannot be considered unfair for it was done to
make the provision of the CBA conformable to the DECS’ Manual of Regulations for Private
Schools.4
On October 2, 1998, Labor Arbiter Nieves V. De Castro rendered a Decision, viz.:

Reviewing the records of this case and the law relative to the issues at hand, we came to the
conclusion that it was an error on [the] part of [DEL PILAR] not to have collected agency fee
due other workers who are non-union members but are included in the bargaining unit being
represented by [the UNION]. True enough as was correctly quoted by [the UNION] Art. 248,
to wit:
Employees of an appropriate collective bargaining unit who are not members of the
recognized collective bargaining agency may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of the recognized collective
bargaining agreement: Provided, that the individual authorization required under
Article [241], paragraph (o) of this Code shall not apply to the non-members of the
recognized collective bargaining agent.
As it is, [DEL PILAR’s] unwarranted fear re-individual dues [without] authorization for non-
union members has no basis in fact or in law. For receipt of CBA benefits brought about by
the CBA negotiated with [petitioners], they are duty bound to pay agency fees which may
lawfully be deducted sans individual check-off authorization. Being [recipients] of said
benefits, they should share and be made to pay the same considerations imposed upon the
union members. [DEL PILAR], therefore, was in error in refusing to deduct corresponding
agency fees which lawfully belongs to the union.
Anent the proposal to decrease the coverage of the 11th and 12th month vacation with pay, we
do not believe that such was done in bad faith but rather in an honest attempt to make
perfect procession following the DECS’ Manuals. Moreso, it is of judicial notice that in the
course of negotiation, almost all provisions are up for grabs, amendments or change. This is
something normal in the course of a negotiation and does not necessarily connote bad faith
as each every one (sic) has the right to negotiate reward or totally amend the provisions of
the contract/agreement.
All told while there was error on [the] part of [DEL PILAR] for the first issue, [it] came through
in the second. But as it is, we do not believe that a finding of unfair labor practice can be had
considering the lack of evidence on record that said acts were done to undermine the union
or stifle the member’s right to self organization or that the [petitioners] were in bad faith. If at
all, it’s (sic) error may have been the result of a mistaken notion that individual check-off
authorization is needed for it to be able to validly and legally deduct assessment especially
after individual[s] concerned registered their objection. On the other hand, it is not error to
negotiate for a better term in the CBA. So long as [the] parties will agree. It must be noted
that a CBA is a contract between labor and management and is not simply a litany of
benefits for labor. Moreso, for unfair labor practice to prosper, there must be a clear showing
of acts aimed at stifling the worker’s right to self-organization. Mere allegations and mistake
notions would not suffice.
ACCORDINGLY, premises considered, the charge of unfair labor practice is hereby

Dismissed for want of basis.
SO ORDERED.5
On appeal, the National Labor Relations Commission (NLRC) affirmed the Arbiter’s ruling. In gist, it
upheld the UNION’s right to agency fee, but did not consider DEL PILAR’s failure to deduct the
same an unfair labor practice.6
The UNION’s motion for reconsideration having been denied,7 it then went to the CA via certiorari.
On July 19, 2005, the CA rendered the assailed decision, affirming with modification the resolutions
of the NLRC. Like the Arbiter and the NLRC, the CA upheld the UNION’s right to collect agency fees
from non-union employees, but did not adjudge DEL PILAR liable for unfair labor practice. However,
it ordered DEL PILAR to deduct agency fees from the salaries of non-union employees.
The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The assailed

resolution of the NLRC dated April 30, 2004 is hereby MODIFIED. Private respondent Del
Pilar Academy is ordered to deduct the agency fees from non-union members who are
recipients of the collective bargaining agreement benefits. The agency fees shall be
equivalent to the dues and other fees paid by the union members.
SO ORDERED.8
DEL PILAR filed a motion for reconsideration of the decision, but the CA denied the same on
September 28, 2005.9
Before us, DEL PILAR impugns the CA Decision on the following grounds:
I. IN PROMULGATING THE CHALLENGED DECISION AND RESOLUTION, THE HON.

COURT OF APPEALS DISREGARDED THE FACT THAT THE ANNUAL INCREASE IN
THE SALARIES OF THE EMPLOYEES WAS NOT A BENEFIT ARISING FROM A
COLLECTIVE BARGAINING AGREEMENT, BUT WAS MANDATED BY THE DIRECTIVE
OF A GOVERNMENTAL DEPARTMENT; and
II. CONSIDERING THE ANNUAL SALARY INCREASE OF NON-UNION MEMBERS WAS

NOT A BENEFIT ARISING FROM THE CBA, THEIR INDIVIDUAL WRITTEN
AUTHORIZATIONS ARE STILL REQUIRED TO ALLOW PETITIONER ACADEMY TO
LEGALLY DEDUCT THE SAME FROM THEIR RESPECTIVE SALARY.10
The issue here boils down to whether or not the UNION is entitled to collect agency fees from non-
union members, and if so, whether an individual written authorization is necessary for a valid check
off.
The collection of agency fees in an amount equivalent to union dues and fees, from employees who
are not union members, is recognized by Article 248(e) of the Labor Code, thus:
recognized collective bargaining agent may be assessed reasonable fees equivalent to the
dues and other fees paid by the recognized collective bargaining agent, if such non-union
members accept the benefits under the collective bargaining agreement. Provided, That the
individual authorization required under Article 241, paragraph (o) of this Code shall not apply
to the non-members of recognized collective bargaining agent.
When so stipulated in a collective bargaining agreement or authorized in writing by the employees

concerned, the Labor Code and its Implementing Rules recognize it to be the duty of the employer to
deduct the sum equivalent to the amount of union dues, as agency fees, from the employees' wages
for direct remittance to the union. The system is referred to as check off.11 No requirement of written
authorization from the non-union employees is necessary if the non-union employees accept the
benefits resulting from the CBA.12
DEL PILAR admitted its failure to deduct the agency fees from the salaries of non-union employees,
but justifies the non-deduction by the absence of individual written authorization. It posits that Article
248(e) is inapplicable considering that its employees derived no benefits from the CBA. The annual
salary increase of its employee is a benefit mandated by law, and not derived from the CBA.
According to DEL PILAR, the Department of Education, Culture and Sports (DECS) required all
educational institutions to allocate at least 70% of tuition fee increases for the salaries and other
benefits of teaching and non-teaching personnel; that even prior to the execution of the CBA in
September 1994, DEL PILAR was already granting annual salary increases to its employees.
Besides, the non-union employees objected to the deduction; hence, a written authorization is
indispensable to effect a valid check off. DEL PILAR urges this Court to reverse the CA ruling insofar
as it ordered the deduction of agency fees from the salaries of non-union employees, arguing that
such conclusion proceeds from a misplaced premise that the salary increase arose from the CBA.
The argument cannot be sustained.
Contrary to what DEL PILAR wants to portray, the grant of annual salary increase is not the only
provision in the CBA that benefited the non-union employees. The UNION negotiated for other
benefits, namely, limitations on teaching assignments to 23 hours per week, additional
compensation for overload units or teaching assignments in excess of the 23 hour per week limit,
and payment of longevity pay. It also negotiated for entitlement to summer vacation leave with pay
for two (2) months for teaching staff who have rendered six (6) consecutive semesters of service.
For the non-teaching personnel, the UNION worked for their entitlement to fifteen (15) days leave
with pay.13 These provisions in the CBA surely benefited the non-union employees, justifying the
collection of, and the UNION’s entitlement to, agency fees.
Accordingly, no requirement of written authorization from the non-union employees is needed to

effect a valid check off. Article 248(e) makes it explicit that Article 241, paragraph (o),14 requiring
written authorization is inapplicable to non-union members, especially in this case where the non-
union employees receive several benefits under the CBA.
As explained by this Court in Holy Cross of Davao College, Inc. v. Hon. Joaquin15 viz.:
The employee's acceptance of benefits resulting from a collective bargaining agreement

justifies the deduction of agency fees from his pay and the union's entitlement thereto. In this
aspect, the legal basis of the union's right to agency fees is neither contractual nor statutory,
but quasi-contractual, deriving from the established principle that non-union employees may
not unjustly enrich themselves by benefiting from employment conditions negotiated by the
bargaining union.
By this jurisprudential yardstick, this Court finds that the CA did not err in upholding the UNION’s
right to collect agency fees.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 86868, are AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO
RUBEN T. REYES
Associate Justice
ATTESTATION
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
Footnotes
1
Penned by Associate Justice Eliezer R. De Los Santos (deceased), with Associate Justices
Eugenio S. Labitoria (retired) and Arturo D. Brion (now a member of this Court), concurring;
rollo, pp. 33-38.
2
Id. at 39.
3
4
Id. at 128-131.
5
Id. at 144-146.
6
Id. at 16-19.
7
Id. at 20-21.
8
Rollo, pp. 37-38.
9
Id. at 39.
10
Id. at 132.
11
See Gabriel v. Secretary of Labor and Employment, 384 Phil. 797, 804 (2000).
12
See Holy Cross of Davao College, Inc. v. Joaquin, 331 Phil. 680, 692 (1996).
13
14
Art. 241. RIGHTS AND CONDITIONS OF MEMBERSHIP IN A LABOR ORGANIZATION.
The following are the rights and conditions of membership in a labor organization:
xxxx
(o) Other than for mandatory activities under the Code, no special assessments,
attorney’s fees, negotiation fees or any other extraordinary fees may be checked off
from any amount due to employee without an individual written authorization duly
signed by the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction; x x x.
15
Supra note 12, at 692.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG
PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision of the National Labor Relations Commission (NLRC)
1
dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for
unjustified refusal to bargain, in violation of par. (g) of Article 249 of the New Labor Code, and
2 3
declared the draft proposal of the Union for a collective bargaining agreement as the governing
collective bargaining agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for
short), a legitimate late labor federation, won and was subsequently certified in a resolution dated
November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of
the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's
motion for reconsideration of the said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished the Company with two
4
copies of its proposed collective bargaining agreement. At the same time, it requested the Company
for its counter proposals. Eliciting no response to the aforesaid request, the Union again wrote the
Company reiterating its request for collective bargaining negotiations and for the Company to furnish
them with its counter proposals. Both requests were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union,
on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground
of unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all
attempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify
the case to the National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to
Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was
assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their
respective position papers as required, the said hearing was cancelled and reset to another date.
Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for
a resetting which was granted. The Company was directed anew to submit its financial statements
for the years 1976, 1977, and 1978.
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 May 24, 1978, Atty. Fortunato Panganiban formally entered his
appearance as counsel for the Company only to request for another postponement allegedly for the
purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper
on May 28, 1979.
When the case was called for hearing on June 4, 1979 as 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 denied. He also ruled that the Company has waived
its right to present further evidence and, therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations
Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of

unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249),
of P.D. 442, as amended. Further, the draft proposal for a collective bargaining
agreement (Exh. "E ") hereto attached and made an integral part of this decision,
sent by the Union (Private respondent) to the respondent (petitioner herein) and
which is hereby found to be reasonable under the premises, is hereby declared to be
the collective agreement which should govern the relationship between the parties
herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor
Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court
dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of
dismissal was reconsidered and the petition was given due course in a Resolution dated April 1,
1981.
Petitioner Company now maintains that its right to procedural due process has been violated when it
was precluded from presenting further evidence in support of its stand and when its request for
further postponement was denied. Petitioner further contends that the National Labor Relations
Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the
evidence considering that it was only on May 24, 1979 when the Union furnished them with a copy of
the proposed Collective Bargaining Agreement and it was only then that they came to know of the
Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by
the National Labor Relations Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
6
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 industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work, and all other terms and conditions of
employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal
duty to initiate contract negotiation. The mechanics of collective bargaining is set in motion only
7
when the following jurisdictional preconditions are present, namely, (1) possession of the status of
majority representation of the employees' representative in accordance with any of the means of
selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3)
a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions
are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no
doubt that the Union has a valid cause to complain against its (Company's) attitude, the totality of
which is indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor
Code — to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is
GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Union was a
duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of
the proposed Collective Bargaining Agreement, to the Company not only once but twice which were
left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all
of which conclusively indicate lack of a sincere desire to negotiate. A Company's refusal to make
8
counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and
this is specially true where the Union's request for a counter proposal is left unanswered. Even
9
during the period of compulsory arbitration before the NLRC, petitioner Company's approach and
attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing
conducted, and undue delay in submitting its financial statements, lead to no other conclusion
except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at
any instance, evinced good faith or willingness to discuss freely and fully the claims and demands
set forth by the Union much less justify its opposition thereto.
10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU)
vs. Herald Publications the rule had been laid down that "unfair labor practice is committed when it
11
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 wherein it was further
12
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
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner

capitalizes on the issue of due process claiming, that it was denied the right to be heard and present
its side when the Labor Arbiter denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted
in its behalf, the claimed denial of due process appeared totally bereft of any legal and factual
support. As herein earlier stated, petitioner had not even honored respondent Union with any reply to
the latter's successive letters, all geared towards bringing the Company to the bargaining table. It did
not even bother to furnish or serve the Union with its counter proposal despite persistent requests
made therefor. Certainly, the moves and overall behavior of petitioner-company were in total
derogation of the policy enshrined in the New Labor Code which is aimed towards expediting
settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an
illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement
which was approved and adopted by the NLRC is a total nullity for it lacks the company's consent,
much less its argument that once the Collective Bargaining Agreement is implemented, the
Company will face the prospect of closing down because it has to pay a staggering amount of
economic benefits to the Union that will equal if not exceed its capital. Such a stand and the
evidence in support thereof should have been presented before the Labor Arbiter which is the proper
forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated
and allowed with impunity to resort to schemes feigning negotiations by going through empty
gestures. More so, as in the instant case, where the intervention of the National Labor Relations
13
Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The
instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D.
873, as amended, which authorizes the said body to determine the reasonableness of the terms and
conditions of employment embodied in any Collective Bargaining Agreement. To that extent, utmost
deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing
agreement by the employees and management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August
27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.
Footnotes
1 Pages 23-26, Rollo.
2 Previously Article 248 renumbered as Article 249 by Batas Pambansa Blg. 70, May
1, 1980.
3 P.D. 442, as amended.
4 Thru a letter attached thereto to BLR Resolution.
5 BLR-S-2-692-79.
6 Pampanga Bus Co. vs. Pambusco Employees, 68 Phil. 541.
7 National Labor Relations Board vs. Columbian Enameling & Stamping Co., 306
U.S. 292 '83 L. Ed. 660,59 Ct 501 (1939).
8 National Labor Relations Board vs. George Piling & Sons Co., 119 F. (2nd) 32.
9 Teller, II Labor Disputes & Collective Bargaining 889, citing Glove Cotton Mills vs.
NLRB 103 F. (2nd) 91.
10 Herald Delivery Carriers Union (PAFLU) vs. Herald Publications, Inc., 55 SCRA
713 (1974), citing NLRB vs. Piling & Sons, Co., 119 F. (2nd) 32 (1941).
11 55 SCRA 713 (1974).
12 78 SCRA 10 (1977), citing Prof. Archibald Cox, "The Duty to Bargain in Good
Faith", 71 Harv. Law Rev. 1401, 1405 (1934).
13 Rothenberg on Labor Relations, p. 435m citing NLRB vs. Boss Mfg. Co., 107 F.
(2nd) 574; NLRB vs. Sunshine Mining Co., 110 F (2nd) 780; NLRB vs. Condenser
Corp., 128 F. (2nd) 67.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 177524 July 23, 2014
NATIONAL UNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED INDUSTRIES

(NUWHRAIN-APL-IUF), PHILIPPINE PLAZA CHAPTER, Petitioner,
vs.
PHILIPPINE PLAZA HOLDINGS, INC., Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari, challenging the January 31, 2007 decision and the
1 2
April 20, 2007 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 93698.
3
This CA decision reversed the July 4, 2005 decision of the National Labor Relations Commission
4
(NLRC) in NLRC NCR CA No. 031977-02 (NLRC NCR-30-05-02011-01) that in tum, reversed and
set aside the April 30, 2002 decision of the Labor Arbiter (LA).
5
The LA dismissed the complaint for non-payment of service charges filed by petitioner National
Union of Workers in Hotel Restaurant and Allied Industries (NUWHRAIN-APL-IUF), Philippine Plaza
Chapter (Union).
The Factual Antecedents
The Union is the collective bargaining agent of the rank-and-file employees of respondent Philippine
Plaza Holdings, Inc. (PPHI).
On November 24, 1998, the PPHI and the Union executed the "Third Rank-and-File Collective
Bargaining Agreement as Amended" (CBA). The CBA provided, among others, for the collection, by
6
the PPHI, of a ten percent (10%) service charge on the saleof food, beverage, transportation,
laundry and rooms. The pertinent CBA provisions read:
SECTION 68. COLLECTION. The HOTEL shall continue to collect ten percent (10%) service charge
on the sale of food, beverage, transportation, laundry and rooms except on negotiated contracts and
special rates. [Emphasis supplied]
SECTION 69. DISTRIBUTION. The service charge to be distributed shall consist of the following:
Effective Food & Room, Transportation & valet

Beverage
1998 95% 100%
1997 95% 100%
The distributable amount will beshared equally by all HOTEL employees, including managerial
employees but excluding expatriates, with three shares to be given to PPHI Staff and three shares to
the UNION (one for the national and two for the local funds) that may be utilized by them for
purposes for which the UNION may decide.
These provisions merely reiterated similar provisions found in the PPHIUnion’s earlier collective
bargaining agreement executed on August 29, 1995. 7
On February 25, 1999, the Union’s Service Charge Committee informed the Union President,
through an audit report (1st audit report), of uncollected service charges for the last quarter of 1998
8
amounting to ₱2,952,467.61. Specifically, the audit report referred to the service charges from the
following items: (1) "Journal Vouchers;" (2) "Banquet Other Revenue;" and (3) "Staff and Promo."
The Union presented this audit report to the PPHI’s management during the February 26, 1999
Labor Management Cooperation Meeting (LMCM). The PPHI’s management responded that the
9
Hotel Financial Controller would need to verify the audit report.
Through a letter dated June 9, 1999, the PPHI admitted liability for ₱80,063.88 out of the
10
₱2,952,467.61 thatthe Union claimed as uncollected service charges. The PPHI denied the rest of
the Union’s claims because: (1) they were exempted from the service charge being revenues from
"special promotions" (revenue from the Westin Gold Card sales) or "negotiated contracts" (alleged
revenue from the Maxi-Media contract); (2) the revenues did not belong to the PPHI but to third-party
suppliers; and (3) no revenue was realized from these transactions as they were actually expenses
incurred for the benefit of executives or by way of good-will to clients and government officials.
During the July 12, 1999 LMCM, the Union maintained its position on uncollected service charges
11
so that a deadlock on the issue ensued. The parties agreed to refer the matter to a third party for the
solution. They considered two options – voluntary arbitration or court action – and promised to get
back to each other on their chosen option.
In its formal reply (to the PPHI’sJune 9, 1999 letter) dated July 21, 1999 (2nd audit report), the
12
Union modified its claims. It claimed uncollected service charges from: (1) "Journal Vouchers -
Westin Gold Revenue and Maxi-Media" (F&B and Rooms Barter); (2) "Banquet and Other Revenue;"
and (3) "Staff and Promo."
On August 10, 2000, the Union’s Service Charge Committee made another service charge audit
report for the years 1997, 1998 and 1999 (3rd audit report). This 3rd audit report reflected total
13
uncollected service charges of ₱5,566,007.62 from the following entries: (1) "Journal Vouchers;" (2)
"Guaranteed No Show;" (3) "Promotions;" and (4) "F & B Revenue." The Union President presented
the 3rd audit report to the PPHI on August 29, 2000.
When the parties failed to reachan agreement, the Union, on May 3, 2001, filed before the LA
(Regional Arbitration Branch of the NLRC) a complaint for non-payment of specified service
14
charges. The Union additionally charged the PPHI with unfair labor practice (ULP) under Article 248
of the Labor Code, i.e., for violation of their collective bargaining agreement.
In its decision dated April 30, 2002, the LA dismissed the Union’s complaint for lack of merit. The
15
LA declared that the Union failed to show, by law, contract and practice, its entitlement to the
payment of service charges from the entries specified in its audit reports (specified
entries/transactions).
The LA pointed out that Section 68 of the CBA explicitly requires, as a precondition for the
distribution of service charges in favor of the covered employees, the collection of the 10% service
charge on the "sale of food, beverage, transportation, laundry and rooms;" at the same time, the
provision exempts from its coverage "negotiated contracts" and "special rates" that the LA deemed
as non-revenue generating transactions involving "food, beverage, transportation, laundry and
rooms." The Union failed to prove that the PPHI collected 10% service charges on the specified
entries/transactions that could have triggered the PPHI’s obligation under this provision.
Particularly, the LA pointed out that, first, the only evidence on record that could have formed the
basis of the Union’s claim for service charges was the PPHI’s admission that, as a matter of policy, it
has been charging, collecting and distributing to the covered employees 10% service charge on the
fifty percent (50%) of the total selling price of the "Maxi-Media F & B" and on the "Average House"
rate of the "Maxi-Media Rooms." And it did so, notwithstanding the fact that the "Maxi-Media F & B
and Rooms Barter" is a "negotiated contract" and/or "special rate" that Section 68 explicitly excludes
from the service charge coverage.
Second,while the PPHI derived revenues from the sale of the Westin Gold Cards (Westin Gold
Revenue), the PPHI did not and could not have collected a 10% service charge as these
transactions could not be considered as sale of food, beverage, transportation, laundry and rooms
that Section 68 contemplates.
Third, the "Staff and Business Promotion and Banquet" entry refers to the expenses incurred by the
PPHI’s Marketing Department and Department Heads and Hotel executives either as part of their
perks or the PPHI’s marketing tool/public relations. These are special rates that are essentially non-
revenue generating items.
Fourth, the "Backdrop" entry refers to services undertaken by third parties payment for which were
made of course to them; hence, this entry/transaction could not likewise be considered as sale of
services by PPHI for which collection of the 10% service charge was warranted.
Lastly, the LA equally brushed aside the Union’s claim of ULP declaring that the PPHI was well
within its legal and contractual right to refuse payment of service charges for entries from which it did
not collect any service charge pursuant tothe provision of their CBA.
The NLRC’s ruling

In its decision of July 4, 2005, the NLRC reversed the LA’s decision and considered the specified
16
entries/transactions as "service chargeable." As the PPHI failed to prove that it paid or remitted the
required service charges, the NLRC held the PPHI liable to pay the Union ₱5,566,007.62
representing the claimed uncollected service charges for the years 1997, 1998 and 1999 per the 3rd
audit report.
The PHHI went to the CA on a petition for certiorari after the NLRC denied its motion for
17
reconsideration. 18
The CA’s ruling
The CA granted the PPHI’s petition in its January 31, 2007 decision. It affirmed the LA’s decision
19
but ordered the PPHI to pay the Union the amount of ₱80,063.88 as service charges that it found
was due under the circumstances. The CA declared that no service charges were due from the
specified entries/transactions; either these constituted "negotiated contracts" and "special rates" that
Section 68 of the CBA explicitly excludes from the coverage of service charges, or they were cited
bases that the Union failed to sufficiently prove.
The CA pointed out that: one, the "Westin Gold Card Revenues" entry involved the sale, not of food,
beverage, transportation, laundry and rooms, but of a "contractual right" to be charged a lesser rate
for the products and services that the Hotel and the stores within it provide. At any rate, the PPHI
charges, collects and distributes to the covered employees the CBAagreed service charges
whenever any Westin Gold Card member purchases food, beverage, etc. Two, the "Maxi-Media F &
B and Rooms and Barter" entry did not involve any sale transaction that Section 68 contemplates.
The CA pointed out that the arrangement between the PPHI and Maxi-Media International, Inc. was
20
not one of sale but an innominate contract of facio ut des, i.e., in exchange for the professional
entertainment services provided by Maxi-Media, the Hotel agreed to give the former ₱2,800,000.00
worth of products and services.The CA added that this agreement falls under "negotiated contracts"
that Section 68 explicitly exempts. Three, the sale of "Gift Certificates" does not involve the CBA-
contemplated "sale of food, beverage, etc." Four, the Union failed to show the source of its
computations for its "Guaranteed No Show" and "F & B Revenue" claims. Five, the "Business
Promotions" entry likewise did not involve any sale; these were part of the PPHI’s business
expenses in the form of either signing benefits for the PPHI’s executives or asmarketing tool used by
the PPHI’s marketing personnel to generate goodwill. And six, the Union’s claims for service charges
that the PPHI allegedly collected prior to May 3, 1998 or three years before the Union filed
itscomplaint on May 3, 2001 had already prescribed per Article 291 of the Labor Code.
The Union filed the present petition after the CA denied its motion for Reconsideration 21
in the CA’s April 20, 2007 resolution. 22
The Petition
The Union argues that the CA clearly misapprehended and misappreciated, with grave abuse of
discretion, the facts and evidence on record. It maintains that the specified entries/transactions are
revenue based transactions which, per Section 68 and 69 of the CBA, clearly called for the collection
and distribution of a 10% service charge in favor of the covered employees. Particularly, the Union
argues that: (1) the "Westin Gold Cards" serve not only as a discount card but also as a "pre-paid"
card that provide its purchasing members complimentary amenities for which the Hotel employees
rendered services and should, therefore, had been subjected to the 10% service charge; (2) the
PPHI failed to prove that it had paid and distributed to the covered employees the service charge
due on the actual discounted sales of food, beverage, etc., generated by the "Westin Gold Cards;"
(3) the Hotel employees likewise rendered services whenever the Maxi-Media International, Inc.
consumed or availed part of the 2,800,000.00 worth of goods and services pursuant to its agreement
with the PPHI; (4) the "Maxi-Media" discounts should be charged to the PPHI as part of its expenses
and not the Union’s share in the service charges; (5) the PPHI has a separate budget for
promotions, hence the "Business Promotions" entry should likewise had been subjected to the 10%
service charge; (6) the sale of "Gift Certificates," recorded in the PPHI’s "Journal Vouchers" as
"other revenue/income," constituted a revenue transaction for which service charges were due; (7)
the PPHI admitted that service charges from "Guaranteed No Show" were due; and (8) it properly
identified through reference numbers the uncollected service charges from "Food and Beverage
Revenue."
The Union contends that inrefusing to collect and remit the CBA-mandated service charges that the
PPHI insists were non-revenue transactions falling under "Negotiated Contracts" and/or "Special
Rates," the PPHI, in effect, contravened the employees’ rights to service charges under the law and
the CBA. The Union also contends that the term "Negotiated Contracts" should be applied to "airline
contracts" only that they (the Union and the PPHI) intended when they executed the CBA. It points
out that at the time the CBA was executed, the PPHI had an existing agreement with Northwest
Airlines to which the term "Negotiated Contracts" clearly referred to. Further, the Union argues that
its claim for unpaid services charges for the year 1997 and part of 1998 had not yet prescribed.
Applying Article 1155 of the Civil Code in relation toArticle 291 of the Labor Code, the Union points
out that the running of the prescriptive period for the filing of its claim was interrupted when it
presented to the PPHI its 1st audit report during the February 26, 1999 LMCMand when the PPHI
admitted the service charges due to the Union inthe PPHI’s June 9, 1999 letter.
The Union additionally argues that the PPHI failed to conform to the generally accepted accounting
standards when it reclassified the revenue items as expense items.
Finally, the Union contends that the PPHI’s refusal, despite repeated demands, to distribute the
unremitted service charges and recognize its right to service charges on the specified entries; the
PPHI’s deliberate failure to disclose its financial transactions and audit reports; and the PPHI’s
reclassification of the revenues into expense items constitute gross violation of the CBA that
amounts to whatthe law considers as ULP.
The Case for the Respondent
The PPHI primarily counters, in its comment, that the Union’s call for the Court to thoroughly re-
23
examinethe records violates the Rule 45 proscription against questions of facts.The PPHI points out
that Rule 45 of the Rules of Court under which the petition is filed requires that only questions of law
be raised. In addition, the factual findings of the LA that had been affirmed by the CA deserve not
only respect but even finality.
On the petition’s merits, the PPHI argues that the specified entries/transactions for which the Union
claims service charges: (1) were not revenue generating transactions; (2) that did not involve a sale
of food, beverage, rooms, transportation or laundry; and/or (3) were in the nature of negotiated
contracts and special rates that Section 68 of the CBA specifically excepts from the collection of
service charges. Correlatively, Article 96 of the Labor Code requires the collection of service charges
as a condition precedent to its distribution or payment. Thus, as no service charges were collected
on the specified entries/transactions that the CBA expressly excepts, the Union’s claim for unpaid
service charges clearly had no basis.
To be precise, the PPHI points out that, first, the sale per se of the "Westin Gold Cards" did not
involve a sale of food, beverage, etc. that Section 68 of the CBA contemplates. The discounted
sales of food, beverage, etc. to Westin Gold Card holders, on the other hand, had already been
subjected to service charges inclusive of the discount, i.e., computed on the gross sales of food,
beverage, etc. to the card holders, and which service charges it had already distributed to the
covered employees. Second, its agreement with Maxi-Media involved an exchange or barter
transaction, i.e., its food and Hotel services in exchange for Maxi-Media’s entertainment services
that did not generate income. This agreement likewise falls under "Negotiated Contracts" that
Section 68 clearly excepts. And, in any case, it had already collected, and distributed to the covered
employees, the service charges on the food, beverage, etc. that Maxi-Media consumed based on
the monthly average rate of the rooms and on the 50% rate of the price of the consumed food and
beverage. Third, the Union failed to prove its claims for uncollected service charges from
"Guaranteed No Show" and "Business Promotions." Fourth, the "Food and Beverage other
Revenue" entry refers to the PPHI’s transactions with external service providers the payment for
whose services could not be considered as the PPHI’s revenue. Fifth, the sale per se of the "Gift
Certificates" also did not involve the Section 68-contemplated sale of food, beverage, etc. and the
Union failed to prove that the presented Gift Certificateshad actually been consumed, i.e., used
within the Hotel premises for food, beverage, etc. And sixth, it had never been its practice to collect
service charges on the specified entries/transactions that could have otherwise resulted in what the
Union considers as "partial abolition of service charges" when it refused to collect service charges
from them.
The PPHI also disputes what it considers as the Union’s strained interpretation of the CBA exception
of "Negotiated Contracts" as applicable to airline contracts only. It points out that the clear wordings
of Section 68 of the CBA plainly show the intent to except, in a general and broad sense,
"Negotiated Contracts" and "Special Rates" as to include the "Westin Gold Cards" and "Maxi-Media"
barter agreement. The PPHI additionally argues that the CBA’s exception of "Negotiated Contracts"
and "Special Rates" from the collection of service charges does not violate Article 96 of the Labor
Code. It points out that Article 96 merely provides for the minimum percentage distribution, between
it (the PPHI) as the employer and the Hotel’s covered employees, of the collected service charges
which their CBA more than satisfied. It also points out that Article 96 does not prohibit the exception
of certain transactions from the coverage and/or collection of service charges that it (as the
employer) and the Union (in behalf of the covered Hotel employees) had voluntarily and mutually
agreed on in their CBA. And in fact, the Union’s refusal to recognize these clear and express
1âwphi1
exceptions constituted a violation of their agreement.
Further, the PPHI maintains that the Union’s claim for the alleged uncollected service charges for the
year 1997 and the early months of 1998 had already prescribed per Article 291 of the Labor Code.
Finally, the PPHI points out that the issue in this case is not whether service charges had been paid.
Rather, the clear issue is whether or not service charges should have been collected (and distributed
to the covered employees) for the specified entries/transactions that the LA and the CA correctly
addressed and which the NLRC clearly missed as it rendered a decision without any factual or legal
basis.
The Court's Ruling
We find the petition unmeritorious.
Preliminary considerations: jurisdictional limitations of the Court’s Rule 45 review of the CA’s Rule 65
decision in labor cases; the Montoya ruling and factual-issue-bar-rule
In a petition for review on certiorari under Rule 45 of the Rules of Court, we review the legal errors
that the CA may have committed in the assailed decision, in contrastwith the review for jurisdictional
errors that we undertake in an original certiorari action. In reviewing the legal correctness of the CA
decision in a labor case taken under Rule 65 of the Rules of Court, we examine the CA decision in
the context that it determined the presence or the absence of grave abuse of discretion in the NLRC
decision before it and not on the basis of whether the NLRC decision, on the merits of the case, was
correct. In other words, we proceed from the premise that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it. Within this limited scope of our Rule 45
review, the question that we ask is: Did the CA correctly determine whether the NLRC committed
grave abuse of discretion in ruling on the case? 24
In addition, the Court’s jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving
only questions of law. A question of law arises when the doubt or controversy exists as to what law
pertains to a particular set of facts; and a question of fact arises when the doubt or controversy
pertains to the truth or falsity of the alleged facts. 25
The present petition essentially raises the question – whether the Union may collect from the PPHI,
under the terms of the CBA, its share of the service charges. This is a clear question of law that falls
well within the Court’s power in a Rule 45 petition.
Resolution of this question of law, however, is inextricably linked with the largely factual issue of
whether the specified entries/transactions fall within the generally covered sale of food, beverage,
transportation, etc. from which service charges are due or within the CBA excepted "Negotiated
Contracts" and "Special Rates." It also unavoidably requires resolution of another factual issue, i.e.,
whether the Union’s claim for service charges collected for the year 1997 and the early months of
1998 had already prescribed. As questions of fact, they are proscribed by our Rule 45 jurisdiction;
we generally cannot address these factual issues except to the extent necessary to determine
whether the CA correctly found the NLRC in grave abuse of discretion in granting the Union’s claim
for service charges from the specified entries/transactions.
The jurisdictional limitations of our Rule 45 review of the CA’s Rule 65 decision in labor cases
constrain us to deny the present petition for clear lack of legal error in the CA’s decision.Our
consideration of the facts taken within this limited scope of our factual review power, convinces us
that grave abuse of discretion attended the NLRC’s decision. At what point and to what extent the
NLRC gravely abusedits discretion is the matter we shall discuss below.
The NLRC’s patently erroneous appreciation of the real issue in the present controversy, along with
the facts and the evidence, amounted to grave abuse of discretion
In granting the Union’s claim, the NLRC simply declared that the PPHI "has not shown any proof that
it paid or remitted what is due to the Union and its members" and concluded that the specified
entries/transactions were "service chargeable." This NLRC conclusion plainly failed to appreciate
that it involved only the alleged uncollected service charges from the specified entries/transactions.
The NLRC likewise, in the course of its ruling, did not point to any evidence supporting its
conclusion.
In deciding as it did, the NLRC patently proceeded from the wrong premise, i.e., that the PPHI did
not at all distribute to the Hotel’s covered employees their share in the collected service charges. It
likewise erroneously assumed that all the specified entries/transactions were subject to service
charges and that the PPHI collected service charges from them as its ruling was patently silent on
this point. The NLRC also erroneously assumed that each and every transaction that the PPHI
entered into was subject to a service charge.
What the NLRC clearly and conveniently overlooked was the underlying issue of whether service
charges are due from the specified entries/transactions, i.e., whether the specified
entries/transactions are covered by the CBA’s general-rule provisions on the collection of service
charges or whether they are excepted because they fall within the excepted "Negotiated Contracts"
and "Special Rates" or simply did not involve a "sale of food, beverage, etc." from which service
charges are due. This understanding of this case’s real issue is an indispensable requisite in the
proper resolution of the controversy and a task that the NLRC, as a tribunal exercising quasi-judicial
power, mustperform with circumspection and utmost diligence. The patent failure led to its manifestly
flawed conclusions that were belied by the underlying facts. By so doing, the NLRC acted outside
the clear contemplation of the law. 26
Accordingly, we affirm the CA’s decision to be legally correct as it correctly reversed the NLRC
decision for grave abuse of discretion.
Nature of a CBA; rules inthe interpretation of CBA provisions
A collective bargaining agreement, as used in Article 252 (now Article 262) of the Labor Code, is a
27
contract executed at the request of either the employer or the employees’ exclusive bargaining
representative with respect to wages, hours of work and all other terms and conditions of
employment, including proposals for adjusting any grievances or questions under such
agreement. Jurisprudence settles that a CBA is the law between the contracting parties who are
28
obliged under the law to comply with its provisions. 29
As a contract and the governing law between the parties, the general rules of statutory construction
apply in the interpretation of its provisions. Thus, if the terms of the CBA are plain, clear and leave
no doubt on the intention of the contracting parties, the literal meaning of its stipulations, as they
appear on the face of the contract, shall prevail. Only when the words used are ambiguous and
30
doubtful or leading to several interpretations of the parties’ agreement that a resort to interpretation
and construction is called for.
31
No service charges were due from the specified entries/transactions; they either fall within the CBA-
excepted "Negotiated Contracts" and "Special Rates" or did not involve "a sale of food, beverage,
etc."
The Union anchors its claim for services charges on Sections 68 and 69 of the CBA, in relation with
Article96 of the Labor Code. Section 68 states that the sale of food, beverage, transportation,
laundry and rooms are subject to service charge at the rate often percent (10%). Excepted from the
coverage of the 10% service charge are the so-called "negotiated contracts" and "special rates."
Following the wordings of Section 68 of the CBA, three requisites must be present for the provisions
on service charges to operate: (1) the transaction from which service charge is sought to be
collected is a sale; (2) the sale transaction covers food, beverage, transportation, laundry and
rooms; and (3) the sale does not result from negotiated contracts and/or at special rates.
In plain terms, all transactions involving a "sale of food, beverage, transportation, laundry and
rooms" are generally covered. Excepted from the coverage are, first, non-sale transactions or
transactions that do not involve any sale even though they involve "food, beverage, etc." Second,
transactions that involve a sale but do not involve "food, beverage, etc." And third, transactions
involving "negotiated contracts" and "special rates" i.e., a "sale of food, beverage, etc." resulting from
"negotiated contracts" or at "special rates;" non-sale transactions involving "food, beverage, etc."
resulting from "negotiated contracts" and/or "special rates;" and sale transactions, but not involving
"food, beverage, etc.," resulting from "negotiated contracts" and "special rates." Notably, the CBA
does not specifically define the terms "negotiated contracts" and "special rates." Nonetheless, the
CBA likewise does not explicitly limit the use of these terms to specified transactions. With particular
reference to "negotiated contracts," the CBA does not confine its application to "airline contracts" as
argued by the Union. Thus, as correctly declared by the CA, the term "negotiated contracts" should
be read as applying to all types of negotiated contracts and not to "airlines contracts" only. This is in
line with the basic rule of construction that when the terms are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations shall prevail. A constricted
interpretation of this term, i.e., as applicable to "airlines contracts" only, must be positively shown
either by the wordings of the CBA or by sufficient evidence of the parties’ intention to limit its
application. The Union completely failed to provide support for its constricted reading of the term
"negotiated contracts," either from the wordings of the CBA or from the evidence.
In reversing the NLRC’s ruling and denying the Union’s claim, the CA found the specified
entries/transactions as either falling under the excepted negotiated contracts and/or special rates or
not involving a sale of food, beverage, etc. Specifically, it considered the entries "Westin Gold
Cards Revenue" and "Maxi Media Barter" to be negotiated contracts or contracts under special
rates, and the entries "Business Promotions" and "Gift Certificates" as contracts that did not involve
a sale of food, beverage, etc. The CA also found no factual and evidentiary basis to support the
Union’s claim for service charges on the entries "Guaranteed No show" and "F & B Revenue."
Our consideration of the records taken under our limited factual review power convinces us that
these specified entries/transactions are indeed not subject to a 10% service charge. We thus see no
reason to disturb the CA’s findings on these points.
The PPHI did not violate Article 96 of the Labor Code when they refused the Union’s claim for
service charges on the specified entries/transactions
Article 96 of the Labor Code provides for the minimum percentage distribution between the employer
and the employees of the collected service charges, and its integration inthe covered employees’
wages in the event the employer terminates its policy of providing for its collection. It pertinently
reads:
Art. 96. Service Charges.
x x x In case the service charge is abolished, the share of the covered employees shall be
considered integrated in their wages.
This last paragraph of Article 96 of the Labor Code presumes the practice of collecting service
charges and the employer’s termination of this practice. When this happens, Article 96 requires the
employer to incorporate the amount that the employees had been receiving as share of the collected
service charges into their wages. Incases where no service charges had previously been collected
(as where the employer never had any policy providing for collection of service charges or had never
imposed the collection of service charges on certain specified transactions), Article 96 will not
operate.
In this case, the CA found that the PPHI had not in fact been collecting services charges on the
specified entries/transactions that we pointed out as either falling under "negotiated contracts"
and/or "special rates" or did not involve a "sale of food, beverage, etc." Accordingly, Article 96 of the
Labor Code finds no application in this case; the PPHI did not abolish or terminate the
implementation of any company policy providing for the collection of service charges on specified
entries/transactions that could have otherwise rendered it liable to pay an amount representing the
covered employees’ share in the alleged abolished service charges.
The Union’s claim for service charges for the year 1997 and the early months of 1998 could not have
yet prescribed at the time it filed its complaint on May 3, 2001; Article 1155 of the Civil Code applies
suppletorily to Article 291 of the Labor Code
Article 291 (now Article 305) of the Labor Code states that "all money claims arising from employer-
32
employee relations x x x shall be filed within three (3) years from the time the cause of action
accrued; otherwise, they shall forever be barred." [Emphasis supplied]
Like other causes of action, the prescriptive period for money claims under Article 291 of the Labor
Code is subject to interruption. And, in the absence of an equivalent Labor Codeprovision for
determining whether Article 291’s three-year prescriptive period may be interrupted, Article 1155 of
the Civil Code may be applied. Thus, the period of prescription of money claims under Article 291 is
33
interrupted by: (1) the filing of an action; (2) a written extrajudicial demand by the creditor; and (3) a
written acknowledgment of the debt by the debtor.
In the present petition, the facts indisputably showed that as early as 1998, the Union demanded, via
the 1st audit report, from the PPHI the payment and/or distribution of the alleged uncollected service
charges for the year 1997. From thereon, the parties went through negotiations (LCMC) to settle and
reconcile on their respective positions and claims.
Under these facts – the Union’s written extrajudicial demand through its 1st audit report and the
successive negotiation meetings between the Union and the PPHI – the running of the three-year
prescriptive period under Article 291 of the Labor Code could have effectively been interrupted.
Consequently, the Union’s claims for the alleged uncollected service charges for the year 1997 could
not have yet prescribed at the time it filed its complaint on May 3, 2001.
This non-barring effect of prescription, notwithstanding (i.e., that the running of the three-year
prescriptive period had effectively been interrupted – by the Union's written extrajudicial demand on
the PPHI), the CA, as it affirmed the LA, still correctly denied the Union's claims for the alleged
uncollected and/or undistributed service charges on the specified entries/transactions for the year
1997 and the early part of 1998. As the CA found and discussed in its decision, and with which we
agree as amply supported by factual and legal bases, the nature of these specified
entries/transactions as either excepted from the collection of service charges or not constituting a
"sale of food, beverage, etc.," and the Union's failure to support its claims by sufficient evidence
warranted, without doubt, the denial of the Union's action.
In sum, we find the CA's denial of the Union's claim for service charges from the specified
entries/transactions legally correct and to be well supported by the facts and the law. The CA
correctly reversed for grave abuse of discretion the NLRC's decision.
WHEREFORE, in light of these considerations, we hereby DENY the petition. We AFFIRM the
decision dated January 31, 2007 and resolution dated April 20, 2007 of the Court of Appeals in CA-
G.R. Sp No. 93698.
SO ORDERED.
ARTURO D. BRION
Associate Justice
Chairperson
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
MARIANO C. DEL CASTILLO JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I

Chief Justice
Footnotes
1
Rollo, pp. 14-89.
Penned by Associate Justice Vicente Q. Roxas and concurred in by Associate Justices

2
Josefina Guevarra-Salonga and Ramon R. Garcia, id. at 91-106.
3
Id. at 108.
4
Penned by Commissioner Angelita A. Gacutan, id. at 525-538.
5
Penned by Labor Arbiter Renaldo 0. Hernandez, id. at 728-749.
6
Id. at 896-898.
7
Id. at 898.
8
Id. at 565.
9
Id. at 566-567.
10
Id. at 568-570.
11
Id. at 549-552.
12
Id. at 575-576.
13
Id. at 790.
14
Id. at 553-554.
15
Supra note 5.
16
Supra note 4.
17
Id. at 473-519.
18
Rollo, pp. 879-895.
19
Supra note 2.
20
Memorandum of Agreement dated June 17, 1998, rollo, pp. 616-624.
21
Rollo, pp. 109-171.
22
Supra note 3.
23
Rollo, pp. 995-1080.
Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA
24
334, 342-343.
25
See Baguio Central University v. Gallente, G.R. No. 188267, December 2, 2013.
Gonzales v. Solid Cement Corporation,G.R. No. 198423, October 23, 2012, 684 SCRA
26
344. See also Aldovino, Jr. v. Commission on Elections,G.R. No. 184836, December 23,
2009, 609 SCRA 234; and Pecson v. Commission on Elections, G.R. No. 182865, December
24, 2008, 575 SCRA 634.
As directed by Republic Act No. 10151, entitled "An Act Allowing the Employment of Night
27
Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four
Hundred Forty-Two, as Amended, Otherwise known as The Labor Code of the Philippines,"
approved on June 21, 2011, the Labor Code articles beginning with Article 130 are
renumbered.
Article 252 (256) of the Labor Code reads: Art. 252. MEANING OF THE DUTY TO
BARGAIN COLLECTIVELY
The duty to bargain collectively means the performance of a mutual obligation to

meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work and all other terms
and conditions of employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to
agree to a proposal or to make any concession.
Davao Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132, March 19,
28
1993, 220 SCRA 197, 204.
Goya, Inc. v. Goya, Inc. Employees Union-FFW, G.R. No. 170054, January 21, 2013, 689
29
SCRA 1, 15-16, citing TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No.
163419, February 13, 2008, 545 SCRA 215, 225.
PNCC Skyway Traffic Management and Security Division Workers Organization

30
(PSTMSDWO) v. PNCC Skyway Corporation, G.R. No.171231, February 17, 2010, 613
SCRA 28, 45; Goya, Inc. v. Goya, Inc. Employees Union-FFW, supra, note 29, at 16.
United Kimberly-Clark Employees Union-Philippine Transport General Workers’

31
Organization (UKCEU-PTGWO) v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March

6, 2006, 519 Phil. 176, 191; Honda Philippines, Inc. v. Samahan ng Malayang Manggagawa
sa Honda, G.R. No. 145561, June 15, 2005, 499 Phil. 174, 180.
As directed by Republic Act No. 10151, entitled "An Act Allowing the Employment of Night
32
Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four
Hundred Forty-Two, as Amended, Otherwise known as The Labor Code of the Philippines,"
approved on June 21, 2011, the Labor Code articles beginning with Article 130 are
renumbered.
Article 1155 of the Civil Code reads:

33
ART. 1155. The prescription of actionsis interrupted when they are filed before the
Court, when there is a written extrajudicial demand by the creditors, and when there
is any written acknowledgment of the debt by the debtor.

SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 185556 March 28, 2011

SUPREME STEEL CORPORATION, Petitioner,
vs.
NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT UNION (NMS-IND-
APL), Respondent.
DECISION
NACHURA, J.:
This petition for review on certiorari assails the Court of Appeals (CA) Decision1 dated September
30, 2008, and Resolution dated December 4, 2008, which affirmed the finding of the National Labor
Relations Commission (NLRC) that petitioner violated certain provisions of the Collective Bargaining
Agreement (CBA).
Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged in the business of
manufacturing steel pipes for domestic and foreign markets. Respondent Nagkakaisang
Manggagawa ng Supreme Independent Union is the certified bargaining agent of petitioner’s rank-
and-file employees. The CBA2 in question was executed by the parties to cover the period from June
1, 2003 to May 31, 2008.
The Case
On July 27, 2005, respondent filed a notice of strike with the National Conciliation and Mediation
Board (NCMB) on the ground that petitioner violated certain provisions of the CBA. The parties failed
to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for
compulsory arbitration pursuant to Article 263(g) of the Labor Code.
Respondent alleged eleven CBA violations, delineated as follows:
A. Denial to four employees of the CBA- provided wage increase
Article XII, Section 1 of the CBA provides:
Section 1. The COMPANY shall grant a general wage increase, over and above to all employees,
according to the following schedule:
A. Effective June 1, 2003 ₱14.00 per working day;
B. Effective June 1, 2004 ₱12.00 per working day; and
C. Effective June 1, 2005 ₱12.00 per working day.3
Respondent alleged that petitioner has repeatedly denied the annual CBA increases to at least four
individuals: Juan Niño, Reynaldo Acosta, Rommel Talavera, and Eddie Dalagon. According to
respondent, petitioner gives an anniversary increase to its employees upon reaching their first year
of employment. The four employees received their respective anniversary increases and petitioner
used such anniversary increase to justify the denial of their CBA increase for the year.4
Petitioner explained that it has been the company’s long standing practice that upon reaching one
year of service, a wage adjustment is granted, and, once wages are adjusted, the increase provided
for in the CBA for that year is no longer implemented. Petitioner claimed that this practice was not
objected to by respondent as evidenced by the employees’ pay slips.5
Respondent countered that petitioner failed to prove that, as a matter of company practice, the
anniversary increase took the place of the CBA increase. It contended that all employees should
receive the CBA stipulated increase for the years 2003 to 2005.6
B. Contracting-out labor
Article II, Section 6 of the CBA provides:
Section 6. Prohibition of Contracting Out of Work of Members of Bargaining Unit. Thirty (30) days
from the signing of this CBA, contractual employees in all departments, except Warehouse and
Packing Section, shall be phased out. Those contractual employees who are presently in the
workforce of the COMPANY shall no longer be allowed to work after the expiration of their contracts
without prejudice to being hired as probationary employees of the COMPANY.7
Respondent claimed that, contrary to this provision, petitioner hired temporary workers for five
months based on uniformly worded employment contracts, renewable for five months, and assigned
them to almost all of the
departments in the company. It pointed out that, under the CBA, temporary workers are allowed only
in the Warehouse and Packing Section; consequently, employment of contractual employees
outside this section, whether direct or agency-hired, was absolutely prohibited. Worse, petitioner
never regularized them even if the position they occupied and the services they performed were
necessary and desirable to its business. Upon the expiration of their contracts, these workers would
be replaced with other workers with the same employment status. This scheme is a clear
circumvention of the laws on regular employment. 8
Respondent argued that the right to self-organization goes beyond the maintenance of union
membership. It emphasized that the CBA maintains a union shop clause which gives the regular
employees 30 days within which to join respondent as a condition for their continued employment.
Respondent maintained that petitioner’s persistent refusal to grant regular status to its employees,
such as Dindo Buella, who is assigned in the Galvanizing Department, violates the employees’ right
to self-organization in two ways: (1) they are deprived of a representative for collective bargaining
purposes; and (2) respondent is deprived the right to expand its membership. Respondent
contended that a union’s strength lies in its number, which becomes crucial especially during
negotiations; after all, an employer will not bargain seriously with a union whose membership
constitutes a minority of the total workforce of the company. According to respondent, out of the 500
employees of the company, only 147 are union members, and at least 60 employees would have
been eligible for union membership had they been recognized as regular employees.9
For its part, petitioner admitted that it hired temporary workers. It purportedly did so to cope with the
seasonal increase of the job orders from abroad. In order to comply with the job orders, petitioner
hired the temporary workers to help the regular workers in the production of steel pipes. Petitioner
maintained that these workers do not affect respondent’s membership. Petitioner claimed that it
agreed to terminate these temporary employees on the condition that the regular employees would
have to perform the work that these employees were performing, but respondent refused.
Respondent’s refusal allegedly proved that petitioner was not contracting out the services being
performed by union members. Finally, petitioner insisted that the hiring of temporary workers is a
management prerogative.10
C. Failure to provide shuttle service
Petitioner has allegedly reneged on its obligation to provide shuttle service for its employees
pursuant to Article XIV, Section 7 of the CBA, which provides:
Section 7. Shuttle Service. As per company practice, once the company vehicle used for the
purpose has been reconditioned.11
Respondent claimed that the company vehicle which would be used as shuttle service for its
employees has not been reconditioned by petitioner since the signing of the CBA on February 26,
2004.12 Petitioner explained that it is difficult to implement this provision and simply denied that it has
reneged on its obligation.13
D. Refusal to answer for the medical expenses incurred by three employees
Respondent asserted that petitioner is liable for the expenses incurred by three employees who
were injured while in the company premises. This liability allegedly stems from Article VIII, Section 4
of the CBA which provides:
Section 4. The COMPANY agrees to provide first aid medicine and first aid service and consultation
free of charge to all its employees.14
According to respondent, petitioner’s definition of what constitutes first aid service is limited to the
bare minimum of treating injured employees while still within the company premises and referring the
injured employee to the Chinese General Hospital for treatment, but the travel expense in going to
the hospital is charged to the employee. Thus, when Alberto Guevarra and Job Canizares, union
members, were injured, they had to pay ₱90.00 each for transportation expenses in going to the
hospital for treatment and going back to the company thereafter. In the case of Rodrigo Solitario,
petitioner did not even shoulder the cost of the first aid medicine, amounting to ₱2,113.00, even if he
was injured during the company sportsfest, but the amount was deducted, instead, from his salary.
Respondent insisted that this violates the above cited provision of the CBA.15
Petitioner insisted that it provided medicine and first aid assistance to Rodrigo Solitario. It alleged
1avvphi1
that the latter cannot claim hospitalization benefits under Article VIII, Section 116 of the CBA because
he was not confined in a hospital.17
E. Failure to comply with the time-off with pay provision
Article II, Section 8 of the CBA provides:
Section 8. Time-Off with Pay. The COMPANY shall grant to the UNION’s duly authorized
representative/s or to any employee who are on duty, if summoned by the UNION to testify, if his/her
presence is necessary, a paid time-off for the handling of grievances, cases, investigations, labor-
management conferences provided that if the venue of the case is outside Company premises
involving [the] implementation and interpretation of the CBA, two (2) representatives of the UNION
who will attend the said hearing shall be considered time-off with pay. If an employee on a night shift
attends grievance on labor-related cases and could not report for work due to physical condition, he
may avail of union leave without need of the two (2) days prior notice.18
Respondent contended that under the said provision, petitioner was obliged to grant a paid time-off
to respondent’s duly authorized representative or to any employee who was on duty, when
summoned by respondent to testify or when the employee’s presence was necessary in the
grievance hearings, meetings, or investigations.19
Petitioner admitted that it did not honor the claim for wages of the union officers who attended the
grievance meetings because these meetings were initiated by respondent itself. It argued that since
the union officers
were performing their functions as such, and not as employees of the company, the latter should not
be liable. Petitioner further asserted that it is not liable to pay the wages of the union officers when
the meetings are held beyond company time (3:00 p.m.). It claimed that time-off with pay is allowed
only if the venue of the meeting is outside company premises and the meeting involves the
implementation and interpretation of the CBA.20
In reply, respondent averred that the above quoted provision does not make a qualification that the
meetings should be held during office hours (7:00 a.m. to 3:00 p.m.); hence, for as long as the
presence of the employee is needed, time spent during the grievance meeting should be paid.21
F. Visitors’ free access to company premises Respondent charged petitioner with violation of Article
II, Section 7 of the CBA which provides:
Section 7. Free Access to Company Premises. Local Union and Federation officers (subject to
company’s security measure) shall be allowed during working hours to enter the COMPANY
premises for the following reasons:
a. To investigate grievances that have arisen;
b. To interview Union Officers, Stewards and members during reasonable hours; and
c. To attend to any meeting called by the Management or the UNION.22
G. Failure to comply with reporting time-off provision
Respondent maintained that a brownout is covered by Article XII, Section 3 of the CBA which states:
Section 3. Reporting Time-Off. The employees who have reported for work but are unable to
continue working because of emergencies such as typhoons, flood, earthquake, transportation
strike, where the COMPANY is affected and in case of fire which occurs in the block where the home
of the employee is situated and not just across the street and serious illness of an immediate
member of the family of the employee living with him/her and no one in the house can bring the sick
family member to the hospital, shall be paid as follows:
a. At least half day if the work stoppage occurs within the first four (4) hours of work; and
b. A whole day if the work stoppage occurs after four (4) hours of work.23
Respondent averred that petitioner paid the employees’ salaries for one hour only of the four-hour
brownout that occurred on July 25, 2005 and refused to pay for the remaining three hours. In
defense, petitioner simply insisted that brownouts are not included in the above list of emergencies.24
Respondent rejoined that, under the principle of ejusdem generis, brownouts or power outages
come within the "emergencies" contemplated by the CBA provision. Although brownouts were not
specifically identified as one of the emergencies listed in the said CBA provision, it cannot be denied
that brownouts fall within the same kind or class of the enumerated emergencies. Respondent
maintained that the intention of the provision was to compensate the employees for occurrences
which are beyond their control, and power outage is one of such occurrences. It insisted that the list
of emergencies is not an exhaustive list but merely gives an idea as to what constitutes an actual
emergency that is beyond the control of the employee.25
H. Dismissal of Diosdado Madayag
Diosdado Madayag was employed as welder by petitioner. He was served a Notice of Termination
dated March 14, 2005 which read:
Please consider this as a Notice of Termination of employment effective March 14, 2005 under Art.
284 of the Labor Code and its Implementing Rules.
This is based on the medical certificate submitted by your attending physician, Lucy Anne E.
Mamba, M.D., Jose R. Reyes Memorial Medical Center dated March 7, 2005 with the following
diagnosis:
‘Diabetes Mellitus Type 2’
Please be guided accordingly.26
Respondent contended that Madayag’s dismissal from employment is illegal because petitioner
failed to obtain a certification from a competent public authority that his disease is of such nature or
at such stage that it cannot be cured within six months even after proper medical treatment.
Petitioner also failed to prove that Madayag’s continued employment was prejudicial to his health or
that of his colleagues.27
Petitioner, on the other hand, alleged that Madayag was validly terminated under Art. 28428 of the
Labor Code and that his leg was amputated by reason of diabetes, which disease is not work-
related. Petitioner claimed that it was willing to pay Madayag 13 days for every year of service but
respondent was asking for additional benefits.29
I. Denial of paternity leave benefit to two employees
Article XV, Section 2 of the CBA provides:
Section 2. Paternity Leave. As per law[,] [t]he Company shall, as much as possible, pay paternity
leave within 2 weeks from submission of documents.30
Petitioner admitted that it denied this benefit to the claimants for failure to observe the requirement
provided in the Implementing Rules and Regulations of Republic Act No. 8187 (Paternity Leave Act
of 1995), that is, to notify the employer of the pregnancy of their wives and the expected date of
delivery.31
Respondent argued that petitioner is relying on technicalities by insisting that the denial was due to
the two employees’ failure to notify it of the pregnancy of their respective spouses. It maintained that
the notification requirement runs counter to the spirit of the law. Respondent averred that, on
grounds of social justice, the oversight to notify petitioner should not be dealt with severely by
denying the two claimants this benefit.32
J. Discrimination and harassment
According to respondent, petitioner was contemptuous over union officers for protecting the rights of
union members. In an affidavit executed by Chito Guadaña, union secretary, he narrated that Alfred
Navarro, Officer-in-Charge of the Packing Department, had been harsh in dealing with his fellow
employees and would even challenge some workers to a fight. He averred that Navarro had an
overbearing attitude during work and grievance meetings. In November 2004, Navarro removed
Guadaña, a foreman, from his position and installed another foreman from another section. The
action was allegedly brought about by earlier grievances against Navarro’s abuse. Petitioner
confirmed his transfer to another section in violation of Article VI, Section 6 of the CBA,33 which
states in part:
Section 6. Transfer of Employment. – No permanent positional transfer outside can be effected by

the COMPANY without discussing the grounds before the Grievance Committee. All transfer shall be
with advance notice of two (2) weeks. No transfer shall interfere with the employee’s exercise of the
right to self-organization.34
Respondent also alleged that Ariel Marigondon, union president, was also penalized for working for
his fellow employees. One time, Marigondon inquired from management about matters concerning
tax discrepancies because it appeared that non-taxable items were included as part of taxable
income. Thereafter, Marigondon was transferred from one area of operation to another until he was
allegedly forced to accept menial jobs of putting control tags on steel pipes, a kind of job which did
not require his 16 years of expertise in examining steel pipes.35
Edgardo Masangcay, respondent’s Second Vice President, executed an affidavit wherein he cited
three instances when his salary was withheld by petitioner. The first incident happened on May 28,
2005 when petitioner refused to give his salary to his wife despite presentation of a proof of
identification (ID) and letter of authorization. On June 18, 2005, petitioner also refused to release his
salary to Pascual Lazaro despite submission of a letter of authority and his ID and, as a result, he
was unable to buy medicine for his child who was suffering from asthma attack. The third instance
happened on June 25, 2005 when his salary was short of ₱450.00; this amount was however
released the following week.36
Petitioner explained that the transfer of the employee from one department to another was the result
of downsizing the Warehouse Department, which is a valid exercise of management prerogative. In
Guadaña’s case, Navarro denied that he was being harsh but claimed that he merely wanted to
stress some points. Petitioner explained that Guadaña was transferred when the section where he
was assigned was phased out due to the installation of new machines. Petitioner pointed out that the
other workers assigned in said section were also transferred.37
For the petitioner, Emmanuel Mendiola, Production Superintendent, also executed an affidavit
attesting that the allegation of Ariel Marigondon, that he was harassed and was a victim of
discrimination for being respondent’s President, had no basis. Marigondon pointed out that after the
job order was completed, he was reassigned to his original shift and group.38
Petitioner also submitted the affidavits of Elizabeth Llaneta Aguilar, disbursement clerk and hiring
staff, and Romeo T. Sy, Assistant Personnel Manager. Aguilar explained that she did not mean to
harass Masangcay, but she merely wanted to make sure that he would receive his salary. Affiant Sy
admitted that he refused to release Masangcay’s salary to a woman who presented herself as his
(Masangcay’s) wife since nobody could attest to it. He claimed that such is not an act of harassment
but a precautionary measure to protect Masangcay’s interest.39
K. Non-implementation of COLA in Wage Order Nos. RBIII-10 and 11
Respondent posited that any form of wage increase granted through the CBA should not be treated
as compliance with the wage increase given through the wage boards. Respondent claimed that, for
a number of years, petitioner has complied with Article XII, Section 2 of the CBA which provides:
Section 2. All salary increase granted by the COMPANY shall not be credited to any future
contractual or legislated wage increases. Both increases shall be implemented separate and distinct
from the increases stated in this Agreement. It should be understood by both parties that contractual
salary increase are separate and distinct from legislated wage increases, thus the increase brought
by the latter shall be enjoyed also by all covered employees.40
Respondent maintained that for every wage order that was issued in Region 3, petitioner never
hesitated to comply and grant a similar increase. Specifically, respondent cited petitioner’s
compliance with Wage Order No. RBIII-10 and grant of the mandated ₱15.00 cost of living
allowance (COLA) to all its employees. Petitioner, however, stopped implementing it to non-
minimum wage earners on July 24, 2005. It contended that this violates Article 100 of the Labor
Code which prohibits the diminution of benefits already enjoyed by the workers and that such grant
of benefits had already ripened into a company practice.41
Petitioner explained that the COLA provided under Wage Order No. RBIII-10 applies to minimum
wage earners only and that, by mistake, it implemented the same across the board or to all its
employees. After realizing its mistake, it stopped integrating the COLA to the basic pay of the
workers who were earning above the minimum wage.42
The NLRC’s Ruling
Out of the eleven issues raised by respondent, eight were decided in its favor; two (denial of
paternity leave benefit and discrimination of union members) were decided in favor of petitioner;
while the issue on visitor’s free access to company premises was deemed settled during the
mandatory conference. The dispositive portion of the NLRC Decision dated March 30, 2007 reads:
WHEREFORE, Supreme Steel Pipe Corporation (the Company) is hereby ordered to:
1) implement general wage increase to Juan Niño, Eddie Dalagon and Rommel Talavera
pursuant to the CBA in June 2003, 2004 and 2005;
2) regularize workers Dindo Buella and 60 other workers and to respect CBA provision on
contracting-out labor;
3) recondition the company vehicle pursuant to the CBA;
4) answer for expenses involved in providing first aid services including transportation
expenses for this purpose, as well as to reimburse Rodrigo Solitario the sum of ₱2,113.00;
5) pay wages of union members/officers who attended grievance meetings as follows:
1) D. Serenilla - ₱115.24375
2) D. Miralpes - ₱115.80625
3) E. Mallari - ₱108.7625
4) C. Cruz - ₱114.65313
5) J. Patalbo - ₱161.0625
6) J.J. Muñoz - ₱111.19375
7) C. Guadaña - ₱56.94375
8) J. Patalbo - ₱161.0625
9) E. Mallari - ₱108.7625
10) C. Guadaña - ₱113.8875
11) A. Marigondon - ₱170.30625
12) A. Marigondon - ₱181.66
14) E. Masangcay - ₱175.75
16) E. Masangcay - ₱175.75
18) F. Servano - ₱174.02
19) R. Estrella - ₱181.50
6) pay workers their salary for the 3 hours of the 4 hour brownout as follows:
1) Alagon, Jr., Pedro - ₱130.0875

2) Aliwalas, Cristeto - ₱108.5625
3) Baltazar, Roderick - ₱ 90.1875
4) Bañez, Oliver - ₱ 90.9375
5) Prucal, Eduardo - ₱126.015
6) Calimquin, Rodillo - ₱131.0362
7) Clave, Arturo - ₱125.64
8) Cadavero, Rey - ₱108.5625
9) De Leon, Romulo - ₱124.35
10) Lactao, Noli - ₱126.015
11) Layco, Jr., Dandino - ₱130.5375
12) Legaspi, Melencio - ₱127.63
13) Quiachon, Rogelio - ₱130.5525
14) Sacmar, Roberto - ₱108.9375
15) Tagle, Farian - ₱129.3375
16) Villavicencio, Victor - ₱126.015
17) Agra, Romale - ₱126.015
18) Basabe, Luis - ₱128.5575
19) Bornasal, Joel - ₱127.53
20) Casitas, Santiago - ₱128.5575
21) Celajes, Bonifacio - ₱128.1825
22) Avenido, Jerry - ₱133.2487
23) Gagarin, Alfredo - ₱108.9375
24) Layson, Paulo - ₱131.745
25) Lledo, Asalem - ₱128.5575
26) Marigondon, Ariel - ₱131.745
27) Orcena, Sonnie - ₱126.015
28) Servano, Fernando - ₱126.015
29) Versola, Rodrigo - ₱126.015
7) reinstate Diosdado Madayag to his former position without loss of seniority rights and to
pay full backwages and other benefits from 14 March 2005, date of dismissal, until the date
of this Decision; if reinstatement is impossible[,] to pay separation pay of one month pay for
every year of service in addition to backwages;
8) dismiss the claim for paternity leave for failure of claimants to observe the requirements;
9) dismiss the charge of harassment and discrimination for lack of merit; and to
10) continue to implement COLA under Wage Order Nos. [RBIII]-10 & 11 across the board.
The issue on Visitors’ Free Access to Company Premises is dismissed for being moot and academic
after it was settled during the scheduled conferences.
SO ORDERED.43
Forthwith, petitioner elevated the case to the CA, reiterating its arguments on the eight issues
resolved by the NLRC in respondent’s favor.
The CA’s Ruling
On September 30, 2008, the CA rendered a decision dismissing the petition, thus:
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED, for lack of merit. The assailed Decision dated March 30, 2007 and
Resolution dated April 28, 2008 of the National Labor Relations Commission in NLRC NCR CC No.
000305-05 are hereby AFFIRMED.
With costs against the petitioner.
SO ORDERED.44
According to the CA, petitioner failed to show that the NLRC committed grave abuse of discretion in
finding that it violated certain provisions of the CBA. The NLRC correctly held that every employee is
entitled to the wage increase under the CBA despite receipt of an anniversary increase. The CA
concluded that, based on the wording of the CBA, which uses the words "general increase" and
"over and above," it cannot be said that the parties have intended the anniversary increase to be
given in lieu of the CBA wage increase.45
The CA declared that the withdrawal of the COLA under Wage Order No. RBIII-10 from the
employees who were not minimum wage earners amounted to a diminution of benefits because
such grant has already ripened into a company practice. It pointed out that there was no ambiguity
or doubt as to who were covered by the wage order. Petitioner, therefore, may not invoke error or
mistake in extending the COLA to all employees and such act can only be construed as "as a
voluntary act on the part of the employer."46 The CA opined that, considering the foregoing, the ruling
in Globe Mackay Cable and Radio Corp. v. NLRC47 clearly did not apply as there was no doubtful or
difficult question involved in the present case.48
The CA sustained the NLRC’s interpretation of Art. VIII, Section 4 of the CBA as including the
expenses for first aid medicine and transportation cost in going to the hospital. The CA stressed that
the CBA should be construed liberally rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due consideration to the context in which it
was negotiated and the purpose which it intended to serve.49
Based on the principle of liberal construction of the CBA, the CA likewise sustained the NLRC’s
rulings on the issues pertaining to the shuttle service, time-off for attendance in grievance
meetings/hearings, and time-off due to brownouts.50
The CA further held that management prerogative is not unlimited: it is subject to limitations found in
law, a CBA, or the general principles of fair play and justice. It stressed that the CBA provided such
limitation on management prerogative to contract-out labor, and compliance with the CBA is
mandated by the express policy of the law.51
Finally, the CA affirmed the NLRC’s finding that Madayag’s dismissal was illegal. It emphasized that
the burden to prove that the employee’s disease is of such nature or at such stage that it cannot be
cured within a period of six months rests on the employer. Petitioner failed to submit a certification
from a competent public authority attesting to such fact; hence, Madayag’s dismissal is illegal.52
Petitioner moved for a reconsideration of the CA’s decision. On December 4, 2008, the CA denied
the motion for lack of merit.53
Dissatisfied, petitioner filed this petition for review on certiorari, contending that the CA erred in
finding that it violated certain provisions of the CBA.
The Court’s Ruling
The petition is partly meritorious.
It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and
compliance therewith is mandated by the express policy of the law. If the terms of a CBA are clear
and there is no doubt as to the intention of the contracting parties, the literal meaning of its
stipulation shall prevail.54 Moreover, the CBA must be construed liberally rather than narrowly and
technically and the Court must place a practical and realistic construction upon it.55 Any doubt in the
interpretation of any law or provision affecting labor should be resolved in favor of labor.56
Upon these well-established precepts, we sustain the CA’s findings and conclusions on all the
issues, except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11
to the employees who are not minimum wage earners.
The wording of the CBA on general wage increase cannot be interpreted any other way: The CBA
increase should be given to all employees "over and above" the amount they are receiving, even if
that amount already includes an anniversary increase. Stipulations in a contract must be read
together, not in isolation from one another.57 Consideration of Article XIII, Section 2 (non-crediting
provision), bolsters such interpretation. Section 2 states that "[a]ll salary increase granted by the
company shall not be credited to any future contractual or legislated wage increases." Clearly then,
even if petitioner had already awarded an anniversary increase to its employees, such increase
cannot be credited to the "contractual" increase as provided in the CBA, which is considered
"separate and distinct."
Petitioner claims that it has been the company practice to offset the anniversary increase with the
CBA increase. It however failed to prove such material fact. Company practice, just like any other
fact, habits, customs, usage or patterns of conduct must be proven. The offering party must allege
and prove specific, repetitive conduct that might constitute evidence of habit,58 or company practice.
Evidently, the pay slips of the four employees do not serve as sufficient proof.
Petitioner’s excuse in not providing a shuttle service to its employees is unacceptable. In fact, it can
hardly be considered as an excuse. Petitioner simply says that it is difficult to implement the
provision. It relies on the fact that "no time element [is] explicitly stated [in the CBA] within which to
fulfill the undertaking." We cannot allow petitioner to dillydally in complying with its obligation and
take undue advantage of the fact that no period is provided in the CBA. Petitioner should recondition
the company vehicle at once, lest it be charged with and found guilty of unfair labor practice.
Petitioner gave a narrow construction to the wording of the CBA when it denied (a) reimbursement
for the first-aid medicines taken by Rodrigo Solitario when he was injured during the company
sportsfest and the transportation cost incurred by Alberto Guevara and Job Canizares in going to the
hospital, (b) payment of the wages of certain employees during the time they spent at the grievance
meetings, and (c) payment of the employees’ wages during the brownout that occurred on July 25,
2002. As previously stated, the CBA must be construed liberally rather than narrowly and technically.
It is the duty of the courts to place a practical and realistic construction upon the CBA, giving due
consideration to the context in which it is negotiated and the purpose which it is intended to serve.
Absurd and illogical interpretations should be avoided.59 A CBA, like any other contract, must be
interpreted according to the intention of the parties.60
The CA was correct in pointing out that the concerned employees were not seeking hospitalization
benefits under Article VIII, Section 1 of the CBA, but under Section 4 thereof; hence, confinement in
a hospital is not a prerequisite for the claim. Petitioner should reimburse Solitario for the first aid
medicines; after all, it is the duty of the employer to maintain first- aid medicines in its
premises.61 Similarly, Guevara and Canizares should also be reimbursed for the transportation cost
incurred in going to the hospital. The Omnibus Rules Implementing the Labor Code provides that,
where the employer does not have an emergency hospital in its premises, the employer is obliged to
transport an employee to the nearest hospital or clinic in case of emergency.62
We likewise agree with the CA on the issue of nonpayment of the time-off for attending grievance
meetings. The intention of the parties is obviously to compensate the employees for the time that
they spend in a grievance meeting as the CBA provision categorically states that the company will
pay the employee "a paid time-off for handling of grievances, investigations, labor-management
conferences." It does not make a qualification that such meeting should be held during office hours
or within the company premises.
The employees should also be compensated for the time they were prevented from working due to
the brownout. The CBA enumerates some of the instances considered as "emergencies" and these
are "typhoons, flood earthquake, transportation strike." As correctly argued by respondent, the CBA
does not exclusively enumerate the situations which are considered "emergencies." Obviously, the
key element of the provision is that employees "who have reported for work are unable to continue
working" because of the incident. It is therefore reasonable to conclude that brownout or power
outage is considered an "emergency" situation.
Again, on the issue of contracting-out labor, we sustain the CA. Petitioner, in effect, admits having
hired "temporary" employees, but it maintains that it was an exercise of management prerogative,
necessitated by the increase in demand for its product.
Indeed, jurisprudence recognizes the right to exercise management prerogative. Labor laws also
discourage interference with an employer's judgment in the conduct of its business. For this reason,
the Court often declines to interfere in legitimate business decisions of employers. The law must
protect not only the welfare of employees, but also the right of employers.63 However, the exercise of
management prerogative is not unlimited. Managerial prerogatives are subject to limitations provided
by law, collective bargaining agreements, and general principles of fair play and justice.64 The CBA is
the norm of conduct between the parties and, as previously stated, compliance therewith is
mandated by the express policy of the law.65
The CBA is clear in providing that temporary employees will no longer be allowed in the company
except in the Warehouse and Packing Section. Petitioner is bound by this provision. It cannot
exempt itself from compliance by invoking management prerogative. Management prerogative must
take a backseat when faced with a CBA provision. If petitioner needed additional personnel to meet
the increase in demand, it could have taken measures without violating the CBA.
Respondent claims that the temporary employees were hired on five-month contracts, renewable for
another five months. After the expiration of the contracts, petitioner would hire other persons for the
same work, with the same employment status.
Plainly, petitioner’s scheme seeks to prevent employees from acquiring the status of regular
employees. But the Court has already held that, where from the circumstances it is apparent that the
periods of employment have been imposed to preclude acquisition of security of tenure by the
employee, they should be struck down or disregarded as contrary to public policy and morals.66 The
primary standard to determine a regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the business or trade of the employer.
The test is whether the former is usually necessary or desirable in the usual business or trade of the
employer. If the employee has been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability, of that activity to the
business of the employer. Hence, the employment is also considered regular, but only with respect
to such activity and while such activity exists.67
We also uphold the CA’s finding that Madayag’s dismissal was illegal. It is already settled that the
burden to prove the validity of the dismissal rests upon the employer. Dismissal based on Article 284
of the Labor Code is no different, thus:
The law is unequivocal: the employer, before it can legally dismiss its employee on the ground of
disease, must adduce a certification from a competent public authority that the disease of which its
employee is suffering is of such nature or at such a stage that it cannot be cured within a period of
six months even with proper treatment.
xxxx
In Triple Eight Integrated Services, Inc. v. NLRC, the Court explains why the submission of the
requisite medical certificate is for the employer’s compliance, thus:
The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed
with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the
gravity or extent of the employee’s illness and thus defeat the public policy on the protection of labor.
x x x x68
However, with respect to the issue of whether the COLA under Wage Order Nos. RBIII-10 and 11
should be implemented across the board, we hold a different view from that of the CA. No diminution
of benefits would result if the wage orders are not implemented across the board, as no such
company practice has been established.
Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the
employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded
on a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or application of a doubtful or
difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the
employer.69
To recall, the CA arrived at its ruling by relying on the fact that there was no ambiguity in the wording
of the wage order as to the employees covered by it. From this, the CA concluded that petitioner
actually made no error or mistake, but acted voluntarily, in granting the COLA to all its employees. It
therefore took exception to the Globe Mackay case which, according to it, applies only when there is
a doubtful or difficult question involved.
The CA failed to note that Globe Mackay primarily emphasized that, for the grant of the benefit to be
considered voluntary, "it should have been practiced over a long period of time, and must be shown
to have been consistent and deliberate."70 The fact that the practice must not have been due to error
in the construction or application of a doubtful or difficult question of law is a distinct requirement.
The implementation of the COLA under Wage Order No. RBIII-10 across the board, which only
lasted for less than a year, cannot be considered as having been practiced "over a long period of
time." While it is true that jurisprudence has not laid down any rule requiring a specific minimum
number of years in order for a practice to be considered as a voluntary act of the employer, under
existing jurisprudence on this matter, an act carried out within less than a year would certainly not
qualify as such. Hence, the withdrawal of the COLA Wage Order No. RBIII-10 from the salaries of
non-minimum wage earners did not amount to a "diminution of benefits" under the law.
There is also no basis in enjoining petitioner to implement Wage Order No. RBIII-11 across the
board. Similarly, no proof was presented showing that the implementation of wage orders across the
board has ripened into a company practice. In the same way that we required petitioner to prove the
existence of a company practice when it alleged the same as defense, at this instance, we also
require respondent to show proof of the company practice as it is now the party claiming its
existence. Absent any proof of specific, repetitive conduct that might constitute evidence of the
practice, we cannot give credence to respondent’s claim. The isolated act of implementing a wage
order across the board can hardly be considered a company practice,71 more so when such
implementation was erroneously made.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The CA Decision

September 30, 2008 and Resolution dated December 4, 2008 are AFFIRMED with MODIFICATION
that the order for petitioner to continue implementing Wage Order No. RBIII-10 and 11 across the
board is SET ASIDE. Accordingly, item 10 of the NLRC Decision dated March 30, 2007 is modified
to read "dismiss the claim for implementation of Wage Order Nos. RBIII-10 and 11 to the employees
who are not minimum wage earners."
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA ROBERTO A. ABAD

JOSE CATRAL MENDOZA

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
Footnotes
Penned by Associate Justice Martin S. Villarama, Jr. (now a member of this Court), with
1
Associate Justices Noel G. Tijam and Arturo G. Tayag, concurring; rollo, pp. 35-61.
2
Rollo, pp. 174-184.
3
Id. at 180.
4
Id. at 115-116.
5
Id. at 116.
6
Id.
7
Id. at 175.
8
Id. at 118.
9
Id. at 118-119.
10
Id. at 117.
11
Id. at 181.
12
Id. at 119.
13
Id. at 120.
14
Id. at 178.
15
Id. at 120.
16
Section 1, Article VIII of the CBA provides:
Section 1. The COMPANY agrees to extend financial assistance to regular

employees/workers who are required to undergo hospitalization upon proper
certification by the COMPANY Physician except in emergency cases which do not
require physician’s certification. The maximum assistance to be extended to any
worker covered by the Agreement shall not exceed EIGHT THOUSAND PESOS
(₱8,000.00) and shall be availed only after the Philhealth Benefits have been
exhausted. It is understood that the EIGHT THOUSAND PESOS (₱8,000.00)
assistance is to include fees of the specialist upon proper certification by the
Company Physician.
17
Rollo, p. 121.
18
Id. at 175.
19
Id. at 121-122.
20
Id. at 122.
21
Id.
22
Id. at 175.
23
Id. at 180.
24
Id. at 124.
25
Id.
26
Id. at 125.
27
Id.
28
LABOR CODE OF THE PHILIPPINES, Article 284 provides:
ART. 284. DISEASE AS GROUND FOR TERMINATION
An employee may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or
is prejudicial to his health as well as to the health of his co-employees; Provided,
That he is paid separation pay equivalent to at least one (1) month salary or to one-
half (1/2) month salary for every year of service, whichever is greater, a fraction of at
least six (6) months being considered as one whole year.
29
Rollo, p. 126.
30
Id. at 181.
31
Id.
32
Id. at 128.
33
Id. at 130.
34
Id. at 177.
35
Id. at 129.
36
Id.
37
Id. at 129 and 131.
38
Id. at 131.
39
Id.
40
Id. at 180.
41
Id. at 132.
42
Id.
43
Id. at 133-136.
44
Id. at 61.
45
Id. at 54.
46
Id. at 54-55.
47
163 Phil. 71 (1988).
48
Rollo, p. 55.
49
Id. at 55-56.
50
Id. at 56.
51
Id.
52
Id. at 56-61.
53
Id. at 33.
United Kimberly-Clark Employees Union-Philippine Transport General Workers’

54
Organization (UKCEU-PTGWO) v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March

6, 2006, 484 SCRA 187, 202.
55
Id. at 203.
Faculty Association of Mapua Institute of Technology (FAMIT) v. Court of Appeals, G.R.

56
No. 164060, June 15, 2007, 524 SCRA 709, 717.
Norkis Free and Independent Workers Union v. Norkis Trading Company, Inc., 501 Phil.
57
170, 178 (2005).
Pag-Asa Steel Works, Inc. v. Court of Appeals, G.R. No. 166647, March 31, 2006, 486
58
SCRA 475, 497.
TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, February 13,
59
2008, 545 SCRA 215, 226.
60
Id.
Section 3, Rule 1, Book Four of the Omnibus Rules Implementing the Labor Code
61
provides:
SECTION 3. Medicines and facilities. — Every employer shall keep in or about his
work place the first-aid medicines, equipment and facilities that shall be prescribed
by the Department of Labor and Employment within 5 days from the issuance of
these regulations. The list of medicines, equipment and facilities may be revised from
time to time by the Bureau of Working Conditions, subject to the approval of the
Secretary of Labor and Employment.
Section 5, Rule 1, Book Four of the Omnibus Rules Implementing the Labor Code
62
provides:
SECTION 5. Emergency hospital. — An employer need not put up an emergency

hospital or dental clinic in the work place as required in these regulations where there
is a hospital or dental clinic which is not more than five (5) kilometers away from the
work place if situated in any urban area or which can be reached by motor vehicle in
twenty-five (25) minutes of travel, if situated in a rural area and the employer has
facilities readily available for transporting a worker to the hospital or clinic in case of
emergency: Provided, That the employer shall enter into a written contract with the
hospital or dental clinic for the use thereof in the treatment of workers in case of
emergency. (Emphasis supplied.)
Endico v. Quantum Foods Distribution Center, G.R. No. 161615, January 30, 2009, 577
63
SCRA 299, 309.
DOLE Philippines, Inc. v. Pawis ng Makabayang Obrero (PAMAO-NFL), 443 Phil. 143, 149
64
(2003).
65
Id. at 150.
Philips Semiconductors (Phils.), Inc. v. Fadriquela, 471 Phil. 355, 372 (2004), citing Brent
66
School, Inc. v. Zamora, 260 Phil. 747 (1990).
67
Id. at 369-370.
Duterte v. Kingswood Trading Co., Inc., G.R. No. 160325, October 4, 2007, 534 SCRA
68
607, 614-615.
69
TSPIC Corporation v. TSPIC Employees Union (FFW), note 59 at 232.
70
Globe Mackay Cable and Radio Corp. v. NLRC, note 47 at 77.
71
Pag-Asa Steel Works, Inc. v. Court of Appeals, note 58 at 499.
SECOND DIVISION
January 28, 2019
G.R. No. 226578

AUGUSTIN INTERNATIONAL CENTER, INC., Petitioner
vs.
ELFRENITO B. BARTOLOME and RUMBY L. YAMAT, Respondents
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari are the Decision dated November 11, 2015 and the
1 2
Resolution dated August 19, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 131582 denying
3
the petition for review filed by petitioner Augustin International Center, Inc. (AICI) questioning the
Resolution dated March 15, 2013 and the Decision dated June 27, 2013 of the National Labor
4 5
Relations Commission (NLRC), which
affirmed the Labor Arbiter's (LA) finding that respondents Elfrenito B. Bartolome (Bartolome) and
Rumby L. Yamat (Yamat; collectively, respondents) were illegally dismissed from employment.
The Facts
In 2010, Bartolome and Yamat applied as carpenter and tile setter, respectively, with AICI, an
employment agency providing manpower to foreign corporations. They were eventually engaged by
Golden Arrow Company, Ltd. (Golden Arrow), which had its office in Khartoum, Republic of Sudan.
Thereafter, they signed their respective employment contracts stating that they would render
services for a period not less than twenty-four (24) months. In their contracts, there was a provision
6
on dispute settlement that reads:
14. Settlement of disputes: All claims and complaints relative to the employment contract of the
employee shall be settled in accordance with Company policies, rules[,] and regulations. In case the
Employee contests the decision of the employer, the matter shall be settled amicably with [the]
participation of the Labour Attache or any authorised representative of the Philippines
Embassy nearest the site of employment. x x x (Emphasis and underscoring supplied)
7
Upon their arrival in Sudan sometime in. March and April 2011, Golden Arrow transferred their
employment to its sister company, Al Mamoun Trading and Investment Company (Al Mamoun). A
year later, or on May 2, 2012, Al Mamoun served Notices of Termination of Service to respondents,
8
causing them to return tothe Philippines. On May 22, 2012, they filed their complaint before the
9
NLRC seeking that AICI and Al Mamoun be held liable for illegal dismissal, breach of contract, and
payment of the unexpired portion of the contract. 10
For their part, AICI and Al Mamoun claimed that respondents abandoned their duties by mid-2012,
based on the e-mail message from Golden Arrow to that effect, viz.:
11
2. Illegal Termination - I understand Mr[.] [Yamat] and Mr[.] Bartolome refused to work resulting in
the work they were designated to complete remaining pending. It is our policy that should a member
of staff refuse to carry out their normal duties without a satisfactory and timely explanation then we
believe they have terminated their employment themselves. 12
The LA's Ruling In a Decision dated August 31, 2012, the LA held that respondents were illegally
13
dismissed, and accordingly, ordered AICI and Al Mamoun to pay the former ₱69,300.00 each,
representing their salaries for the unexpired portion of their contract. The LA explained that AICI
14
and Al Mamoun failed to overcome their burden to prove that the dismissal was for a just or
authorized cause. They likewise failed to show that respondents abandoned their duties. 15
Aggrieved, AICI and Al Mamoun filed an appeal. 16
The NLRC's Ruling
In a Decision dated June 27, 2013, the NLRC affirmed the LA's ruling, noting that AICI and Al
17
Mamoun failed to discharge their burden to prove by substantial evidence that the termination of
respondents' employment was valid. 18
Undaunted, AICI and Al Mamoun filed a petition for certiorari before the CA.
19
The CA's Ruling
In a Decision dated November 11, 2015, the CA denied the petition. It held that AICI and Al
20 21
Mamoun failed to comply with procedural and substantive due process in dismissing respondents
from their employment. 22
AICI and Al Mamoun moved for reconsiderat.ion, arguing for the first time that they were denied
23
due process because respondents did not first contest their termination before the "[Labor] Attache
or any [authorized] representative of the Philippine[] Embassy nearest the site of employment," as
stipulated in the employment contracts, before filing the complaint before the LA. 24
In a Resolution dated August 19, 2016, the CA denied the said motion. It explained that, as a rule,
25 26
termination disputes should be brought before the LA, except when the parties agree to submit the
dispute to voluntary arbitration pursuant to then Article 262 (now Article 275) of the Labor Code,
27
provided that such agreement is stated "in unequivocal language." Citing jurisprudence, the CA
28
added that the phrase "all disputes" is not sufficient to divest the LA of its jurisdiction over
termination disputes. In the same manner, the phrase "all claims and complaints" in respondents'
employment contracts does not remove the LA's jurisdiction to decide whether respondents were
legally terminated. 29
Hence, AICI filed this petition.
The Issues Before the Court
The issues before the Court are whether or not: (a) the LA correctly took cognizance of this case;
and (b) AICI is liable for respondents' illegal dismissal.
The Court's Ruling
Preliminarily, it bears stressing that AICI does not assail the CA's ruling of illegal dismissal but
instead, argues that the LA incorrectly took cognizance of the case at the onset. It insists that based
on the dispute settlement provision in respondents' employment contracts, the "primary jurisdiction"
to decide this case is with the "[Labor] Attache or any [authorized] representative of the Philippine[]
Embassy nearest the site of employment" (designated person). 30
After a judicious review of the case, the Court denies the petition.
Section 10 of Republic Act No. (RA) 8042, as amended by RA 10022, explicitly provides that LAs
31 32
have original and exclusive jurisdiction over claims arising out of employer-employee
33
relations or by virtue of any law or contract involving Filipino workers for overseas
deployment, as in this case. The relevant portion of the provision reads:
Section 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages. x x x (Emphases supplied)
Settled is the rule that jurisdiction over the subject matter is conferred by law and cannot be
34
acquired or waived by agreement of the parties. As herein applied, the dispute settlement provision
35
in respondents' employment contracts cannot divest the LA of its jurisdiction over the illegal
dismissal case. Hence, it correctly took cognizance of the complaint filed by respondents before it.
Moreover, issues not raised in the previous proceedings cannot be raised for the first time at a late
stage. In this case, the Court observes that AICI failed to raise the issue of respondents' supposed
non-compliance with the dispute settlement provision before the LA, as well as before the NLRC. In
fact, AICI only mentioned this issue for the first time before the CA in its motion for reconsideration.
Therefore, such argument or defense is deemed waived and can no longer be considered on
appeal. Hence, the Court rules that the LA properly took cognizance of this case.
36
However, the Court deems it essential to point out that in resolving whether the LA had jurisdiction
over this case, the CA erroneously assumed that the designated person in the dispute settlement
provision is a Voluntary Arbitrator under the auspices of the Labor Code, to wit:
It is true that the Voluntary Arbitrator or a panel of Voluntary Arbitrators can hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks upon agreement of the
parties. But if the parties wish to submit termination disputes to voluntary arbitration, such an
agreement must be stated "in unequivocal language." In the present case, the agreement of the
parties was written in this manner:
xxxx
It is, however, not sufficient to merely say that the parties agree on the principle that "all disputes"
should first be submitted to a Voluntary Arbitrator. There is a need for an express stipulation that
illegal termination disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary
Arbitrators, since the same fall within a special class of disputes that are generally within the
exclusive [and] original jurisdiction of the Labor Arbiters by express provision of law. 37
To clarify, the Voluntary Arbitrator under the Labor Code is one agreed upon by the parties to
38
resolve certain disputes and is tasked to render an award or decision within twenty (20) calendar
39
days pursuant to Article 276 of the Labor Code. This decision shall be final and executory after ten
40
(10) calendar days from receipt thereof. 41
In this case, the dispute settlement provision reads:
14. Settlement of disputes: All claims and complaints relative to the employment contract of the
employee shall be settled in accordance with Company policies, rules[,] and regulations. In case the
Employee contests the decision of the employer, the matter shall be settled amicably with [the]
participation of the Labour Attache or any authorised representative of the Philippines
Embassy nearest the site of employment. x x x (Emphasis and underscoring supplied)
42
Clearly, the mechanism contemplated herein is an amicable settlement whereby the parties can
negotiate with each other; it is not a voluntary arbitration under the Labor Code wherein a third party
renders a decision to resolve the dispute. The text of the contractual provision shows that the
designated person is tasked merely to participate in the amicable settlement and not to decide the
dispute. This participation is in line with the mandate of Filipinos Resource Centers, in which labor
attaches are members, to engage in the "conciliation of disputes arising from employer-employee
relationship." Hence, the "[Labor] Attache or any [authorized] representative of the Philippine[]
43
Embassy nearest the site of employment" was not called upon to act as a Voluntary Arbitrator as
contemplated under the Labor Code. It was therefore erroneous for the CA to assume that the
contractual provision triggered the voluntary arbitration mechanism under the Labor Code and, on
that premise, venture into an inquiry as to whether or not there was an "express stipulation"
submitting the termination dispute to such process, which thereby puts the case beyond the ambit of
the LA's jurisdiction.
Considering that the parties did not submit the present illegal termination case to the voluntary
arbitration mechanism, the dispute remained under the exclusive and original jurisdiction of the LA,
which therefore correctly took cognizance of the case. Hence, the Court modifies the CA's ruling on
this matter accordingly.1âшphi1
On the second issue, AICI argues in its petition that it cannot be held liable for illegal dismissal
because it only recruits employees for foreign employers, and as such, it does not have an
employee-employer relationship with the overseas workers. 44
This argument does not hold water. Section 10 of RA 8042, as amended; expressly provides that a
recruitment agency, such as AICI, is solidarily liable with the foreign employer for money claims
arising out of the employee-employer relationship between the latter and the overseas Filipino
worker. Jurisprudence explains that this solidary liability is meant to assure the aggrieved worker of
45
immediate and sufficient payment of what is due him, as well as to afford overseas workers an
46
additional layer of protection against foreign employers that tend to violate labor laws. In view of the
47
express provision of law, AICI's lack of an employee-employer relationship with respondents cannot
exculpate it from its liability to pay the latter's money claims.
Nevertheless, AICI is not left without a remedy. The law does not preclude AICI from going after the
foreign employer for reimbursement of any payment it has made to respondents to answer for the
money claims against the foreign employer. 48
WHEREFORE, the petition is DENIED for lack of merit. Accordingly, the Decision dated November
11, 2015 and the Resolution dated August 19, 2016 of the Court of Appeals in CA-G.R. SP No.
131582 are hereby AFFIRMED for the reasons above-discussed.
SO ORDERED.
Carpio, Senior Associate Justice (Chairperson), Caguioa, J. Reyes, Jr., and Hernando, JJ., concur.

*
Footnotes
Designated Additional Member per Special Order Nos. 2629 and 2630 dated December 18,
*
2018.
1
Rollo, pp. 8-18.
Id. at 20-29. Penned by Associate Justice Zenaida T. Galapate-Laguilles with Associate

2
Justices Mariflor P. Punzalan Castillo and Fiorito S. Macalino, concurring.
3
Id. at 30-34.
Records, Vol. I, pp. 210-213. Penned by Commissioner Dolores M. Peralta-Beley with

4
Presiding Commissioner Leonardo L. Leonida and Commissioner Mercedes R. Posada-

Lacap, concurring.
Id. at 230-236. Penned by Commissioner Dolores M. Peralta-Beley with Commissioner

5
Mercedes R. Posada-Lacap, concurring.
See Employment Contracts of Bartolome dated November 12, 2010 (rollo, pp. 35-38) and
6
Yamat dated October 23, 2010 (id. at 41-44). Based on their contracts, they would render
services to Golden Arrow for a period of not less than twenty-four (24) months and for a
basic monthly salary of five hundred fifty US dollars ($550.00) (See id. at 21. See also id. at
35 and 41).
7
Id. at 37 and 43.
8
Id. at 39 and 45. The notices read:
This is to inform you that it has been decided to terminate your services with AL
MAMOUN CO. LTD Effective 07/05/2012. Please contact the HR department to
finalizing (sic) your out process.
Wish Well In Future. (sic)
See Complaint; records, Vol. I, p. 1. See also Single-Entry Approach form dated May 22,
9
2012; id. at 13.
10
See rollo, p. 22.
11
See e-mail correspondence dated July 4, 2012; records, Vol. I, p. 35.
12
Id.
13
Id. at 91-96. Penned by Labor Arbiter Leandro M. Jose.
14
See id. at 95-96.
15
See id. at 94-95.
Dated October 25, 2012. Id. at 102-105. The appeal was initially denied in a Resolution
16
dated March 15, 2013 (id. at 210-213) due to non-perfection but was later reinstated in the
Decision dated June 27, 2013 (id. at 230-236), after AICI and Al Mamoun filed their motion
for reconsideration dated April 19, 2013 (id. at 215-216).
Id. at 230-236.
17
See id. at 234-235.

18
See Petition dated September 3, 2013 (records, Vol. II, pp. 1-8) and Amended Petition (id.
19
at 246-253).
Rollo, pp. 20-29.
20
Id. at 29.
21
Anent procedural due process, the CA found that respondents were neither served with
22
notices recounting acts and/or omissions to justify their dismissal nor given the opportunity to
explain their side. Instead, they were merely sent the Notices of Termination of Service
briefly informing them of the management's decision to prematurely conclude their services.
As regards substantive due process, the CA held that AICI and Al Mamoun's defense of
abandonment of duties to justify respondents' dismissal were unsubstantiated. It stressed
that the burden of proof to show that the dismissal was for a just or authorized cause rests
with the employer and its failure to do so would mean that the dismissal was illegal, as in this
case. (See id. at 24-28.)
Motion for reconsideration is not attached to the records.

23
Rollo, pp. 30-31.
24
Id. at 30-33.
25
Id. at 33.
26
See Article 275 (formerly 262) of the Labor Code, as renumbered pursuant to Section 5 of
27
Republic Act No. (RA) 10151, entitled "AN ACT ALLOWING THE EMPLOYMENT OF NIGHT
WORKERS, THEREBY REPEALING ARTICLES 130 AND 131 OF PRESIDENTIAL
DECREE NUMBER FOUR HUNDRED FORTY-TWO, AS AMENDED, OTHERWISE
KNOWN As THE LABOR CODE OF THE PHILIPPINES," approved on June 21, 2011. See
also Department Advisory No. 0 I, Series of 2015 of the Department of Labor and
Employment entitled "RENUMBERING OF THE LABOR CODE OF THE PHILIPPINES, AS
AMENDED."
See Vivero v. Court of Appeals, 398 Phil. 158 (2000); and Negros Metal Corporation v.

28
Lamayo, 643 Phil. 675 (2010).
See rollo, pp. 31-32.
29
See rollo, p. 10.
30
Entitled "AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS EMPLOYMENT AND
31
ESTABLISH A HIGHER STANDARD OF PROTECTION AND PROMOTION OF THE

WELFARE OF MIGRANT WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN
DISTRESS, AND FOR OTHER PURPOSES," approved on June 7, 1995.
See Section 7 of RA 10022, entitled "AN ACT AMENDING REPUBLIC ACT No. 8042,
32
OTHERWISE KNOWN AS THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT

OF 1995, AS AMENDED, FURTHER IMPROVING THE STANDARD OF PROTECTION
AND PROMOTION OF THE WELFARE OF MIGRANT WORKERS, THEIR FAMILIES AND
OVERSEAS FILIPINOS IN DISTRESS, AND FOR OTHER PURPOSES," approved on
March 8, 2010.
See Cubero v. Laguna West Multi-Purpose Cooperative, Inc., 538 Phil. 899, 905 (2006)
33
wherein the Court stated that original jurisdiction refers to the power "to take cognizance of a
cause at its inception, try it and pass judgment upon the law and facts" while exclusive
jurisdiction means that such power is "possessed to the exclusion of others."
See Spouses Santiago v. Northbay Knitting, Inc., G.R. No. 217296, October 11, 2017. See
34
also Metromedia Times Corporation v. Pastorin, 503 Phil. 288, 304 (2005) citing Lozon v.

NLRC, 310 Phil. 1, 13 (1995), wherein the Court stated thus: "[Jurisdiction over the subject
matter] is conferred by law and not within the courts, let alone the parties; to themselves
determine or conveniently set aside. x x x"
See Office of the Court Administrator v. CA, 428 Phil. 696 (2002). The Court held thus:
35
"[t]he well-entrenched rule is that jurisdiction over the subject matter is determined
exclusively by the Constitution and the law. It cannot be conferred by the voluntary act or
agreement of the parties; it cannot be acquired through, or waived or enlarged or diminished
by, their act or omission; neither is it conferred by acquiescence of the court. x x x" (Id. at
701-702.)
36
Section 1, Rule 9 of the Rules of Court provides that "[d]efenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived. x x x." See
also Maxicare PCIB Cigna Healthcare v. Contreras, 702 Phil. 688, 696 (2013) wherein the
Court held that "[a]s a rule, a party who deliberately adopts a certain theory upon which the
case is tried and decided by the lower court, will not be permitted to change theory on
appeal. Points of law, theories, issues and arguments not brought to the attention of the
lower court need not be, and ordinarily will not be, considered by a reviewing court, as these
cannot be raised for the first time at such late stage. It would be unfair to the adverse party
who would have no opportunity to present further evidence material to the new theory, which
it could have done had it been aware of it at the time of the hearing before the trial court. x x
x"
Rollo, pp. 31-32.
37
Article 219 (formerly 212) (n) of the Labor Code reads:

38
Article 219. [212] Definitions. - x x x x
(n) "Voluntary Arbitrator" means any person accredited by the Board as such, or any

person named or designated in the Collective Bargaining Agreement by the parties to
act as their Voluntary Arbitrator, or one chosen with or without the assistance of the
National Conciliation and Mediation Board, pursuant to a selection procedure agreed
upon in the Collective Bargaining Agreement, or any official that may be authorized
by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the
written request and agreement of the parties to a labor dispute."
The jurisdiction of the Voluntary Arbitrator is contained in Articles 274 and 275 (formerly
39
261 and 262) of the Labor Code, to wit:
Article 274. [261] Jurisdiction of Voluntary Arbitrators and Panel of Voluntary

Arbitrators. -The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company
personnel policies referred to in the immediately preceding article. x x x
Article 275. [262] Jurisdiction over Other Labor Disputes. - The Voluntary Arbitrator
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor practices and bargaining
deadlocks.
See the third paragraph of Article 276 (formerly 262-A), which reads:
40
Article 276. [262-A] Procedures. – x x x x
Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator
or panel of Voluntary Arbitrators to render an award or decision within twenty (20)
calendar days from the date of submission of the dispute to voluntary arbitration. x x
x x (Emphasis supplied)
See the fourth paragraph of Article 276 (formerly 262-A), which reads:
41
Article 276. [262-A] Procedures. – x x x x
The award or decision of the Voluntary Abitrator or panel of Voluntary Arbitrators

shall contain the facts and the law on which it is based. It shall be final and
executory after ten (10) calendar days from receipt of the copy of the award or
decision by the parties. x x x x (Emphasis supplied)
Rollo, pp. 37 and 43.

42
Previously, labor attaches were tasked "to provide all Filipino workers within their
43
jurisdiction assistance on all matters arising out of employment" pursuant to Article 21 of the
Labor Code. However, said provision had been superseded by RA 8042 which defined the
roles and responsibilities of different government agencies involved in the protection of
migrant workers. Nevertheless, under RA 8042, labor attaches remain active in protecting
migrant workers as a member of the Filipinos Resources Center. (See Section 19 of RA
8042 in relation to Sections 46 and 4 7 of the Implementing Rules and Regulations-RA 8042,
entitled "OMNIBUS RULES AND REGULATIONS IMPLEMENTING THE MIGRANT
WORKERS AND OVERSEAS FILIPINO ACT OF 1995" [February 29, 1996]).
See rollo, pp. 13-14.
44
The second and third paragraphs of Section 10 of RA 8042, as amended by RA 10022,
45
read:
Section 10. Money Claims. – x x x x
The liability of the principal/employer and the recruitment/placement agency

for any and all claims under this section shall be joint and several. This
provision shall be incorporated in the contract for overseas employment and shall be
a condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and partners as the
case may be, shall themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification
made locally or in a foreign country of the said contract. x x x (Emphasis supplied)
See Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403, 445 (2014),
46
wherein the Court elucidated on this point further, to wit: "[i]n overseas employment, the filing
of money claims against the foreign employer is attended by practical and legal
complications. The distance of the foreign employer alone makes it difficult for an overseas
worker to reach it and make it liable for violations of the Labor Code. There are also possible
conflict of laws, jurisdictional issues, and procedural rules that may be raised to frustrate an
overseas worker's attempt to advance his or her claims. x x x x The fundamental effect of
joint and several liability is that 'each of the debtors is liable for the entire obligation.' A final
determination may, therefore, be achieved even if only one of the joint and several debtors
are impleaded in an action. Hence, in the case of overseas employment, either the local
agency or the foreign employer may be sued for all claims arising from the foreign
employer's labor law violations. This way, the overseas workers are assured that someone -
the foreign employer's local agent - may be made to answer for violations that the foreign
employer may have committed." See also ATCI Overseas Corporation v. Echin, 64 7 Phil. 43
(2010); and Sevillana v. I.T. (International) Corp., 408 Phil. 570 (2001).
See Sameer Overseas Placement Agency, Inc. v. Cabiles, id. at 446, wherein the Court
47
held thus: "[a] further implication of making local agencies jointly and severally liable with the
foreign employer is that an additional layer of protection is afforded to overseas workers.
Local agencies, which are businesses by nature, are inoculated with interest in being always
on the lookout against foreign employers that tend to violate labor law. Lest they risk their
reputation or finances, local agencies must already have mechanisms for guarding against
unscrupulous foreign employers even at the level prior to overseas employment
applications."
See id.
48

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 186557 August 25, 2010
NEGROS METAL CORPORATION, Petitioner,

vs.
ARMELO J. LAMAYO, Respondent.
DECISION
CARPIO MORALES, J.:
Armelo J. Lamayo (respondent) began working for Negros Metal Corporation (petitioner or the
company) in September 1999 as a machinist.
Sometime in May 2002, while respondent was at the company’s foundry grinding some tools he was
using, William Uy, Sr. (Uy), company manager, called his attention why he was using the grinder
there to which he replied that since the machine there was bigger, he would finish his work faster.
Respondent’s explanation was found unsatisfactory, hence, he was, via memorandum, charged of
loitering and warned.1 Taking the warning as a three-day suspension as penalized under company
rules, respondent reported for work after three days, only to be meted with another 10-day
suspension2 ─ from May 30 to June 10, 2002, for allegedly failing to sign the memorandum
suspending him earlier.
After serving the second suspension, respondent reported for work on June 11, 2002 but was
informed by Uy that his services had been terminated and that he should draft his resignation letter,
drawing respondent to file on June 17, 2002 a complaint3 for illegal dismissal.
In lieu of a position paper, petitioner submitted a Manifestation4 contending that the complaint should
be dismissed because the Labor Arbiter had no jurisdiction over it since, under their Collective
Bargaining Agreement5 (CBA), such matters must first be brought before the company’s grievance
machinery.
By Decision6 of December 29, 2004, the Labor Arbiter, brushing aside petitioner’s position, held that
respondent was illegally dismissed. The dispositive portion of the said Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. DECLARING that complainant was illegally dismissed by respondents;
2. ORDERING respondent to pay complainant the total amount of ₱178,978.48 representing

payment for separation pay, back wages and 13th month pay, plus 10% thereof as attorney’s
fees in the amount of ₱17,897.85, or in the total amount of
ONE HUNDRED NINETY SIX THOUSAND EIGHTH HUNDRED SEVENTY SIX PESOS & 33/100
(₱196,876.33) the same to be deposited with the Cashier of this Office, within ten (10) calendar days
from receipt of this Decision.
On petitioner’s appeal, the National Labor Relations Commission (NLRC), by Resolution7 of March
30, 2006, set aside the ruling of, and remanded the case to, the Labor Arbiter for disposition based
on the company’s grievance procedure. It held that based on a letter of the company union president
Arturo Ronquillo (Ronquillo), respondent invoked the CBA provision on grievance procedure.
Respondent’s Motion for Reconsideration was denied by the NLRC by Resolution8 of June 27, 2006.
He thereupon appealed to the Court of Appeals.
By Decision9 of March 25, 2008, the appellate court set aside the NLRC Resolutions
and reinstated the Labor Arbiter’s Decision. It held that the Labor Arbiter had jurisdiction to hear the
complaint; that as respondent’s dismissal did not proceed from the parties’ interpretation of or
implementation of the CBA, it is not covered by the grievance machinery procedure; that the laws
and rules governing illegal dismissal are not to be found in the parties’ CBA but in the labor statutes,
hence, the Labor Arbiter had jurisdiction; and that although the option to go through the grievance
machinery was stated in Ronquillo’s letter10 to petitioner, respondent denied having made that option
as he had ceased to be a member of the union, as evidenced by a March 20, 2001 Certification11 of
the union’s past president Alex Sanio that he had resigned effective March 18, 2001. The appellate
court went on to hold that, at that point, it was too late to direct the parties to go through the
grievance machinery.
In holding that respondent was illegally dismissed, the appellate court noted that he was not allowed
to go back to work after serving two suspensions, without affording him the requisite notice and
hearing; and that respondent’s failure to seek reinstatement did not negate his claim for illegal
dismissal, there being nothing wrong in opting for separation pay in lieu of reinstatement.
Petitioner’s motion for reconsideration having been denied by Resolution12 of January 21, 2009, it
interposed the present petition for review on certiorari, maintaining that the grievance machinery
procedure should have been followed first before respondent’s complaint for illegal dismissal could
be given due course.
The petition fails.
Articles 217, 261, and 262 of the Labor Code outline the jurisdiction of labor arbiters and voluntary
arbitrators as follows:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
employment;
exceeding five thousand pesos (₱5,000.00) regardless of whether accompanied with
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining

agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements. (emphasis and
underscoring supplied)
xxxx
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The Voluntary

Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to
hear and decide all unresolved grievances arising from the interpretation or implementation
of the Collective Bargaining Agreement and those arising from the interpretation or
enforcement of company personnel policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement. (emphasis and underscoring supplied)
ART. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks. (emphasis and underscoring
supplied)
Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination

disputes. On the other hand, under Article 261, a voluntary
arbitrator has original and exclusive jurisdiction over grievances arising from the interpretation or
enforcement of company policies.
As a general rule then, termination disputes should be brought before a labor arbiter, except when
the parties, under Art. 262, unmistakably express that they agree to submit the same to voluntary
arbitration.13
In the present case, the CBA provision on grievance machinery being invoked by petitioner does not
expressly state that termination disputes are included in the ambit of what may be brought before the
company’s grievance machinery. Thus, the pertinent provision in the parties’ CBA reads:
Article IV
GRIEVANCE MACHINERY
Section 1. The parties hereto agree on principle that all disputes between labor and management
may be settled through friendly negotiations that the parties have the same interest in the continuity
of work until all points in dispute shall have been discussed and settled. x x x For this purpose, a
grievance is defined as any disagreement between the UNION and the EMPLOYER or
between a worker or group of workers on one hand and the EMPLOYER on the one hand as
to the application and interpretation of any of the provisions of this contract. Other matters
subject of collective bargaining or regulated by existing labor laws shall not be considered as
grievances. (emphasis and underscoring supplied)
Even assuming, however, that the suspension of an employee may be considered as a

"disagreement" which bears on the "application and interpretation of any of the provisions" of the
CBA, respondent could not have bound himself to bring the matter of his suspension to grievance
procedure or voluntary arbitration in light of the documented fact that he had resigned from the union
more than a year before his suspension, not to mention the fact that he denied having a hand in the
preparation of the union president Ronquillo’s letter invoking the grievance procedure. In fine, the
1avvphi1
labor tribunal had original and exclusive jurisdiction over respondent’s complaint for illegal dismissal.
On the merits, as did the appellate court, the Court sustains the Labor Arbiter’s ruling that
respondent was illegally dismissed absent a showing that he was accorded due process when he
was summarily terminated. The Court is not a trier of facts. It is not tasked to review the evidence on
record, documentary and testimonial, and reassess the probative weight thereof, especially in view
of the well-entrenched rule that findings of fact of administrative officials, such as labor arbiters, who
have acquired expertise on account of their specialized jurisdiction are accorded by the courts not
only respect but, most often, with finality, particularly when affirmed on appeal.
WHEREFORE, the petition is DENIED.
SO ORDERED.

Associate Justice
WE CONCUR:
ARTURO D. BRION
Associate Justice
LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

MA. LOURDES P. A. SERENO

Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
certify that the conclusions in the above decision had been reached in consultation before the case
RENATO C. CORONA
Chief Justice
Footnotes
1
NLRC records, p. 107.
2
Id. at 109
3
Id. at 1-3.
4
Id. at 11-12.
5
Id. at 121-134.
6
Id. at 58-65. Penned by Labor Arbiter Phibun Pura.
Id. at 257-262. Penned by Commissioner Aurelio D. Menzon and concurred in by

7
Commissioner Oscar S. Uy and Presiding Commissioner Gerardo C. Nograles.
CA rollo, pp. 102-103. Penned by Commissioner Aurelio D. Menzon and concurred in by

8
Commissioner Oscar S. Uy and Presiding Commissioner Gerardo C. Nograles.
Id. at 190-198- Penned by Associate Justice Amy C. Lazaro-Javier and concurred in by

9
Associate Justices Pampio A. Abarintos and Francisco P. Acosta.
10
NLRC records, p. 111.
11
Id. at 16.
Rollo, pp. 36-37. Penned by Associate Justice Amy C. Lazaro-Javier and concurred in by
12
Associate Justices Franchito N. Diamante and Francisco P. Acosta.
13
Vide San Miguel Corporation v. NLRC, G.R. No. 108001, March 15, 1996, 255 SCRA 133.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 126717 February 11, 1999
GREAT PACIFIC EMPLOYEES UNION and RODEL P. DE LA ROSA, petitioners,

vs.
GREAT PACIFIC LIFE ASSURANCE CORPORATION, LABOR ARBITER JOVENCIO LL.
MAYOR JR. and NATIONAL LABOR COMMISSION (THIRD DIVISION), respondents.
BELLOSILLO, J.:
GREAT PACIFIC LIFE EMPLOYEES UNION and Great Pacific Life Assurance Corporation entered
sometime in 1990 into a Collective Bargaining Agreement (CBA) to take effect 1 July 1990 until 30
June 1993.
On 18 May 1993, or about a month and a half before the expiration of the CBA, the parties submitted
their respective proposals and counter-proposals to serve as bases for their discussions on its
projected renewal. The ensuing series of negotiations however resulted in a deadlock prompting
petitioner Great Pacific Life Employees Union (UNION hereon) on 23 September 1993 to file a
notice of strike with the National Conciliation and Mediation Board (NCMB) of the Department of
Labor. Despite several conciliatory conferences before the Board, the impasse could not be
resolved. Thus, on 3 November 1993 petitioner UNION led by its President Isidro Alan B. Domingo
and Vice President Rodel P. de la Rosa went on strike.
On 6 November 1993 respondent Great Pacific Life Assurance Corporation (GREPALIFE hereon)
required all striking employees to explain in writing within forty-eight (48) hours why no disciplinary
action, including possible dismissal from employment, should be taken against them for committing
illegal acts against the company in the course of the strike, particularly on 4 and 5 November. They
were warned that failure to submit their explanations within the prescribed period would be
construed as waiver of their right to be heard. The company directive was apparently triggered by
some violent incidents that took place while the strike was in progress. Strikers reportedly blocked all
points of ingress and egress of the company premises in Makati City thus preventing GREPALIFE
employees reporting for work from entering their respective offices. These employees and third
persons doing business with the company, including lessees of the GREPALIFE building, were
allegedly forced by the strikers to submit their cars/vehicles, bags and other belongings to illegal
search. 1
Complying with the order, UNION President Alan B. Domingo and some strikers explained that they
did not violate any law as they were merely exercising their constitutional right to strike. Petitioner
Rodel P. de la Rosa and the rest of the strikers however ignored the management directive.
GREPALIFE found the explanation of Domingo totally unsatisfactory and considered de la Rosa as
having waived his right to be heard. Thus on 16 November 1993 both UNION officers were notified
of the termination of their services, effective immediately, as Senior Benefits Clerk and Senior Data
Analyst, respectively. All other strikers whose explanations were found unacceptable or who failed
2
to submit written explanations were likewise dismissed. Notwithstanding their dismissal from
3
employment, Domingo and de la Rosa continued to lead the members of the striking union in their
concerted action against management.
In the meantime, the NCMB resumed conciliatory conferences between the disputants. On 11
February 1994 respondent GREPALIFE submitted a draft Agreement denominated by petitioner
UNION as the "last and final offer by Management," which proposed among others that —
4. Employee/members of the Union subject of dismissal notices shall be reinstated

under the same terms and conditions prior to their dismissal.
5. The reinstatement of the employees mentioned in #4 shall be conditioned upon

the submission by Alan B. Domingo and Rodel P. de la Rosa . . . . of their voluntary
resignations to the Company upon the signing of this agreement.
6. It is agreed and understood that Messrs. Domingo's and de la Rosa's resignation

while being effective thirty (30) days after submission, shall mean that they need not
report to the Company any longer. For the duration of the thirty (30) day period, they
shall be considered on leave with pay if they still have any outstanding vacation
leave credits for 1993 and 1994.
7. Messrs. Domingo and de la Rosa, as showing of the Company's magnanimity,

shall be extended/given separation pay at the rate of one(1) month basic pay per
year of service based on the new CBA
rates. 4
On 14 February 1994 petitioner UNION in assenting to the offers expressed that —
. . . . Management will make a full and immediate implementation of all the terms and
conditions agreed upon.
On its part, the Union shall forthwith lift the picket lines at the premises of the
Company. All employees concerned shall terminate the strike and shall return to
work promptly at the start of working hours on February 16, 1994.
This acceptance should not be Interpreted to mean acquiescence by the Union to

any portion of the aforementioned "last and final offer of Management" which may be
deemed to be contrary to law or public policy, the said offer being the sole
responsibility of Management. Furthermore, it is understood that should any portion
of said offer be held invalid, the remainder of said offer which has been herein
accepted shall not be affected thereby. 5
On 15 February 1994 the UNION and GREPALIFE executed a Memorandum of Agreement (MOA)
before the NCMB which ended their dispute. The MOA provided in its Par 4 (on dismissals) that —
(a) (Except for Domingo and de la Rosa) employees/members of the Union subject
of dismissal notices on account of illegal acts committed in the course of the strike
shall be given amnesty by the Company and he reinstated (under) the same terms
and conditions prior to their dismissals following the signing of this agreement; (b)
Messrs. Domingo and de la Rosa hereby reserve their right to question before the
NLRC the validity or legality of their dismissal from employment . . . .
6
On 15 February 1994 Domingo and de la Rosa filed a joint letter of resignation with respondent
company but emphasized therein that "(their) resignation is submitted only because the same is
demanded by the Company, and it should not be understood as a waiver — as none is expressingly
or impliedly made — of whatever rights (they) may have under existing contracts and labor and
social legislation." The MOA was subsequently incorporated in a new CBA which was signed on 4
7
March 1994 but made effective on 1 July 1993 until 30 June 1996.
On 2 June 1994 Domingo and de la Rosa sue GREPALIFE for illegal dismissal, unfair labor practice
and damages.
The Labor Arbiter sustained the charge of illegal dismissal. He found that the evidence of
respondent company consisting of affidavits of its employees was self-serving and inadequate to
prove the illegal acts allegedly committed during the strike by Domingo and de la Rosa. Calling
attention to the fifth. Paragraph Of the "last and final offer" Of respondent company, he rationalized
that if indeed there was justifiable ground to terminate complaints' employment, there would have
been no need for the company to demand the resignation of the two union officers in exchange for
the reinstatement of all the strikers. He branded this "offer" as nothing more than a scheme to get rid
the complainants, noting the undue haste with which their services were terminated by the
respondent company. This, he observed, constituted nothing less than a deprivation of due process
of law. Thus, on 25 July 1995 the Labor Arbiter ordered respondent GREPALIFE to reinstate
complaints to their former positions without loss of seniority rights, with one (1) year back wages
without qualification or deduction computed from 16 November 1993, the date of their dismissal. The
other claims were dismissed for insufficiency of evidence. 8
Both parties appealed to the National Labor Relations Commission (NLRC). Respondent NLRC
rejected the finding below that Domingo and de la Rosa. were illegally dismissed, contending that a
just cause for dismissal had been sufficiently established. However, it agreed that respondent
company failed to comply strictly with the requirements of due process prior to termination. In its
decision dated 14 May 1996, it modified the ruling of the Labor Arbiter by directing respondent
GREPALIFE to pay complainants their one (1) month salary for non-observance of due process
9
prior to their dismissal. Considering that at the final negotiation for the settlement respondent
company offered complainants separation pay of one (1) month salary for every year of service
based on the new CBA rates in exchange for their voluntary resignation, the NLRC additionally
ordered payment of such amount. 10
On 19 June 1996 respondent GREPALIFE's motion for reconsideration was denied. Pending finality
thereof, respondent company and Domingo entered into compromise agreement which they
11
submitted to the NLRC for approval. On 10 July 1996 the NLRC considered the case against
Domingo terminated, and denied on 16 August 1996 de la Rosa's motion for reconsideration.
12 13
Pleading before us, petitioner de la Rosa raises two (2) issues. He asserts that he was illegally
dismissed because his actual participation in the illegal acts during the strike in voked by
GREPALIFE as basis for his dismissal was not adequately established. He also complains that he
was later on forced to resign by management.
We hold that the NLRC did not commit grave abuse of discretion. The right to strike, while
constitutionally recognized, is not without legal constrictions. The Labor Code is emphatic against
14
the use of violence, coercion and intimidation during a strike and to this end prohibits the obstruction
of free passage to and from the employer's premises for lawful purposes. The sanction provided in
par. (a) of Art. 262 thereof is so severe that "any worker or union officer who knowingly participates
in the commission of illegal acts during a strike may be declared to have lost his employment
status."
15
GREPALIFE submitted before the Labor Arbiter several affidavits of its employees which de la Rosa
did not refute. Of these documents, two (2) specifically described the incidents that transpired during
the strike on 4 and 5 November 1993. Security guard Rodrigo S. Butalid deposed —
(3) Since 3 November 1993, I have noticed that the striking employees have been
doing the following: (a) the striking employees are picketing at the entrance and exit
gates. (b) The striking employees would surround every vehicle including vehicles of
lessees of the Grepalife Building, that would enter the Grepalife premises, inspect
the same and ask the driver of the vehicle to open the trunk of the vehicle so that the
striking employees can see whether there are Grepalife business documents found
therein. The vehicle which is being inspected cannot enter the Grepalife premises as
the striking employees would place a wooden bench in front of the vehicle. This
wooden bench is only removed to enable the vehicle to enter the Grepalife premises
once the signal has been given by the striking employees, who stand at the sides
and at the back of the vehicle, to the other striking employees who stand in front of
the vehicle that the vehicle has already been inspected and cleared. (c) If the striking
employees find Grepalife business documents in the vehicle being inspected, the
striking employees would prevent the vehicle from entering the Grepalife premises.
(d) The striking employees do not allow Grepalife, employees to enter the Grepalife
premises. Occasionally however, the striking employees will allow a Grepalife
employees to enter the Grepalife office but on the condition that they will only get
their personal belongings. (e) All persons who wish to enter the Grepalife premises
are frisked and their bags/brief cases inspected. If a person is found to carry any
Grepalife business document, he is not allowed to enter the Grepalife premises. In
the alternative, he would be allowed to enter but the Grepalife business document in
his possession will be confiscated from him before he is allowed to enter.
4. Among those who I have seen to have participated in the foregoing activities are
the following persons: (a) Alan B. Domingo who I know to be the President of the
Union; (b) Rodel P. dela Rosa who I know to be the Vice-President of the Union;
The affidavit of another security guard, Wilson S. Concha was of similar import.
Petitioner de la Rosa assails the inherent weakness of the sworn statements of these security
guards. But while it is true that affidavits may be regarded as infirm evidence before the regular
16
courts unless the affiants are presented on the stand, such affidavits by themselves are acceptable
in proceedings before the Labor Arbiter. Under Sec. 7, Rule V, of the New Rules of Procedure of the
NLRC, these proceedings, save for the constitutional requirements of due process, are not to be
strictly governed by the technicalities of law and procedural rules. Section 3, par. 2, of the same Rule
provides that verified position papers are to be accompanied by all supporting documents including
the affidavits of the parties' respective witnesses in lieu of direct testimony. It is therefore a clear
mandate that the Labor Arbiter may employ all reasonable means to ascertain the facts of the
controversy before him.
Since de la Rosa did not present countervailing evidence, the NLRC correctly appreciated the
affidavits of the two (2) security guards as having adequately established the charges leveled
against de la Rosa thus justifying his dismissal from employment.
We now turn to the claim of de la Rosa that he was forced to resign. It is true that the draft
Agreement submitted by respondent company before the NCMB expressly proposed that the
reinstatement of its dismissed employees should be conditioned on the voluntary resignations of
Domingo and de la Rosa upon the signing of the Agreements. It is also true that petitioner UNION
was amenable to this proposition. But the unalterable facts is that the MOA that was subsequently
finalized and executed did not carry this conditionally. Paragraph 4 (b) thereof merely expressed a
reservation by Domingo and de la Rosa of their right to question before the NLRC the legality. of
their dismissal from employment. Obviously they were referring to their dismissal on 16 November
1993 due to the illegal acts they allegedly committed in the course of the strike, and not to the
voluntary resignation they were supposed to tender to management.
Significantly, the joint letter of resignation submitted by Domingo and de la Rosa a day after the
MOA was executed was never acted upon by respondent company. And rightly so for, having been
earlier dismissed (i.e., on 16 November 1993), these two (2) union officers had no more employment
to resign from. To be sure, under the MOA their resignations were no longer a condition imposed by
respondent company for the eventual reinstatement of the other strikers. This being the case, de la
Rosa cannot now complain that he was forced to resign. Did he not explicitly acknowledge in his
complaint with the Labor Arbiter that his cause of action was the Illegal termination of his services on
16 November 1993? 17
Petitioner de la Rosa also claims that respondent company unreasonably singled out the top officers
of the UNION, including himself as unfit for reinstatement. Insisting that this act constitutes unfair
labor practice, he demands entitlement to moral and exemplary damages.
We disagree. While an act or decision of an employer may be unfair, certainly not every unfair act or
decision constitutes unfair labor practice (ULP) as defined and enumerated under Art. 248 Of the
Labor Code. 18
There should be no dispute that all the prohibited acts instituting unfair labor practice in essence
relate to the workers' right to self-organization. Thus, an employer may be held liable under this
provision if his conduct affects in whatever manner the right of an employee to self-organize. The
decision of respondent GREPALIFE to consider the top officers of petitioner UNION as unfit for
reinstatement is not essentially discriminatory and constitutive of an unlawful labor practice of
employers under the above-cited provision. Discriminating in the context of the Code involves either
encouraging membership in any labor organization or is made on account of the employee's having
given or being about to give testimony under the Labor Code. These have not been proved in the
case at bar.
To elucidate further, there can be no discrimination where the employees concerned are not similarly
situated. A union officer has larger and heavier responsibilities than a union member. Union
19
officers are duty bound to respect the law and to exhort and guide their members to do the same;
their position mandates them to lead by example. By committing prohibited activities during the
strike, de la Rosa as Vice President of petitioner UNION demonstrated a high degree of imprudence
and irresponsibility. Verily this justifies his dismissal from employment. Since the objective of the
Labor Code is to ensure a stable but dynamic and just industrial peace, the dismissal of undesirable
labor leaders should be upheld. 20
It bears emphasis that the employer is free to regulate all aspects of employment according to his
own discretion and judgment. This prerogative flaws from the established rule that labor laws do not
authorize substitution of judgment of the employer in the conduct of his business. Recall of workers
clearly falls within the ambit of management prerogative. The employer can exercise this
21
prerogative without fear of liability so long as it is done in good faith for the advancement of his
interest and not for the purpose of defeating or circumventing the rights of the employees under
special laws or valid agreements. It is valid as long as it is not performed in a malicious, harsh,
oppressive, vindictive or wanton manner or out of malice or spite.
That respondent company opted to reinstate all the strikers except Domingo and de la Rosa is an
option taken in good faith for the just and lawful protection and advancement of its interest.
Readmitting the union members to the exclusion of Domingo and de la Rosa was nothing less than a
sound exercise of management prerogative, an act of selt-preservation in fact, designed to insure
the maintenance of peace and order in the company premises. The dismissal of de la Rosa who
22
had shown his capacity for unmitigated mischief was intended to avoid a recurrence of the violence
that attended the fateful strike in November.
WHEREFORE, the petition is DISMISSED. The decision of respondent National Labor Relations
Commission dated 14 May 1996 (a) finding that petitioner Rodel P. de la Rosa was legally
dismissed, and, (b) ordering respondent Great Pacific Life Assurance Corporation to pay petitioner
his one (1) month salary or its failure to comply strictly with due process prior to the latter's
termination and his one (1) month salary per year of service based on the new CBA rates as
separation pay, as well as its Resolution dated 16 August 1996 denying reconsideration, is
AFFIRMED.
SO ORDERED.
Puno, Mendoza, Quisumbing and Buena, JJ., concur.
Footnotes
1 Records, pp. 27 and 28.
2 Id., pp. 29 and 30.
3 Id., pp. 31-45.
4 Id., pp. 46-A and 46-B.
5 Id., p. 47.
6 Id., p. 49.
7 Id., p. 52.
8 Decision penned by Labor Arbiter Jovencio LI. Mayor Jr.; Rollo, pp. 117-118.
9 Per petitioner de la Rosa, this amounted to P6,418.00; Record, p.3.
10 Decision penned by Presiding Commissioner Lourdes C. Javier, concurred by

Commissioner Ireneo B. Bernardo and Joaquin A. Tanodra; Rollo, pp. 223-224.
11 In consideration of P103,841.62 as full settlement of Domingo's claims against

GREPALIFE; id., pp. 350-351.
12 Id., pp. 362-363.

13 Id., pp. 373-374.
14 Art. 264, par. (e) (on prohibited activites), The labor Code of the Philippines.
15 Cesario A. Azucena Jr., The Labor Code with Comments and Case, 1993 Ed., Book II p.
332.
16 People v. Cañada, G.R. No. 112176, 6 February 1996, 253 scra 277.
17 See Note 9.
18 Art. 248. Unfair Labor Practices of Employers — It shall be unlawful for an employer to
commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce
employees in the exercise of their right to self-organization; (b) To require as a condition of
employment that a person or an employee shall not join a labor organization or shall
withdraw from one which he belongs; (c) To contract out services or functions being
performed by union members when such will interfere with, restrain or coerce employees in
the exercise of their rights to self-organization; (d) To iniate, dominate, assist or otherwise
interfere with the formation or administration of any labor organization, including the giving of
financial or other support to it or its organizers supporters; (e) To discriminate in regard to
wages, hours of work, and other terms and conditions of employment in order to encourage
or discourage membership in any labor organization. Nothing in this Code or in any other law
shall stop the parties from requiring membership in a recognized collective bargaining agent
as a condition for employment, except those employees who are already members of
another union at the time of the signing of the collective bargaining agreement. Employees of
an appropriate collective bargaining unit who are not members of the recognized collective
bargaining may be assessed a reasonable fee equivalent to the dues and other fees paid by
members of the recognized bargaining agent, if such non-union members accept the
benefits under the collective agreement: Provided that the individual authorization required
under article 242, paragraph (o) of this Code shall not apply to the non-members of the
recognized collective bargaining agent; (f) To dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having given or being about to give testimony under
this Code; (g) To violate the duty to bargain collectively as prescribed by this Code; (h) To
pay negotiation or attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or (i) To violate a
collective bargaining agreement. The provisions of the preceding paragraph notwithstanding,
only the officers and agents or corporations, associations or partnership who have actually
participated in, authorized or ratified unfair labor practices shall be held criminally liable.
19 Wise and Co. v. Wise and Co. Employees Union — NATU, G.R. No. 87672, 13 October
1989, 178 SCRA 536.
20 Continental Cement Corporation Labor Union (NLU) v. Continental Cement Corporation,

G.R. No. 51544, 30 August 1990, 189 SCRA 134.
21 Manila Electric Company v. NLRC, G.R. No. 114129, 24 October 1996, 263 SCRA 531.
22 Pagkakaisang Itinaguyod Ng Mga Mangagawa sa Ang Tibay (PIMA) v. Ang Tibay Inc.,
No. L-22273, 16 May 1967, 20 SCRA 45.
SECOND DIVISION
January 25, 2016
G.R. No. 201595
ALLAN M. MENDOZA, Petitioner,
vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU), namely, EDUARDO B.
BORELA, BUENAVENTURA QUEBRAL, ELIZABETH COMETA, ALEJANDRO TORRES,
AMORSOLO TIERRA, SOLEDAD YEBAN, LUIS RENDON, VIRGINIA APILADO, TERESITA
BOLO, ROGELIO BARBERO, JOSE CASAÑAS, ALFREDO MAGA, EMILIO FERNANDEZ,
ROSITA BUENA VENTURA, ALMENIO CANCINO, ADELA IMANA, MARIO MANCENIDO,
WILFREDO MANDILAG, ROLANDO MANLAP AZ, EFREN MONTEMAYOR, NELSON
PAGULAYAN, CARLOS VILLA, RIC BRIONES, and CHITO BERNARDO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the April 24, 2012 Decision of the Court of Appeals
1 2
(CA) which dismissed the Petition for Certiorari in CA-G.R. SP No. 115639.
3
Factual Antecedents
Petitioner was a member of the Manila Water Employees Union (MWEU), a Department of Labor
and Employment (DOLE)-registered labor organization consisting of rank-and-file employees within
Manila Water Company (MWC). The respondents herein named – Eduardo B. Borela (Borela),
Buenaventura Quebral (Quebral), Elizabeth Cometa (Cometa), Alejandro Torres (Torres), Amorsolo
Tierra (Tierra), Soledad Yeban (Yeban), Luis Rendon (Rendon), Virginia Apilado (Apilado), Teresita
Bolo (Bolo), Rogelio Barbero (Barbero), Jose Casañas (Casañas), Alfredo Maga (Maga), Emilio
Fernandez (Fernandez), Rosita Buenaventura (Buenaventura), Almenio Cancino (Cancino), Adela
Imana, Mario Mancenido (Mancenido), Wilfredo Mandilag (Mandilag), Rolando Manlapaz
(Manlapaz), Efren Montemayor (Montemayor), Nelson Pagulayan, Carlos Villa, Ric Briones, and
Chito Bernardo – were MWEU officers during the period material to this Petition, with Borela as
President and Chairman of the MWEU Executive Board, Quebral as First Vice-President and
Treasurer, and Cometa as Secretary. 4
In an April 11, 2007 letter, MWEU through Cometa informed petitioner that the union was unable to
5
fully deduct the increased P200.00 union dues from his salary due to lack of the required December
2006 check-off authorization from him. Petitioner was warned that his failure to pay the union dues
would result in sanctions upon him. Quebral informed Borela, through a May 2, 2007 letter, that for
6
such failure to pay the union dues, petitioner and several others violated Section 1(g), Article IX of
the MWEU’s Constitution and By-Laws. In turn, Borela referred the charge to the MWEU grievance
7
committee for investigation.
On May 21, 2007, a notice of hearing was sent to petitioner, who attended the scheduled hearing.
On June 6, 2007, the MWEU grievance committee recommended that petitioner be suspended for
30 days.
In a June 20, 2007 letter, Borela informed petitioner and his corespondents of the MWEU Executive
8
Board’s "unanimous approval" of the grievance committee’s recommendation and imposition upon
9
them of a penalty of 30 days suspension, effective June 25, 2007.
In a June 26, 2007 letter to Borela, petitioner and his co-respondents took exception to the
10
imposition and indicated their intention to appeal the same to the General Membership Assembly in
accordance with Section 2(g), Article V of the union’s Constitution and By-Laws, which grants them
11
the right to appeal any arbitrary resolution, policy and rule promulgated by the Executive Board to
the General Membership Assembly. In a June 28, 2007 reply, Borela denied petitioner’s appeal,
12
stating that the prescribed period for appeal had expired.
Petitioner and his co-respondents sent another letter on July 4, 2007, reiterating their arguments
13
and demanding that the General Membership Assembly be convened in order that their appeal could
be taken up. The letter was not acted upon.
Petitioner was once more charged with non-payment of union dues, and was required to attend an
August 3, 2007 hearing. Thereafter, petitioner was again penalized with a 30-day suspension
14
through an August 21, 2007 letter by Borela informing petitioner of the Executive Board’s
15
"unanimous approval" of the grievance committee recommendation to suspend him effective
16
August 24, 2007, to which he submitted a written reply, invoking his right to appeal through the
17
convening of the General Membership Assembly. However, the respondents did not act on
petitioner’s plea.
Meanwhile, MWEU scheduled an election of officers on September 14, 2007. Petitioner filed his
certificate of candidacy for Vice-President, but he was disqualified for not being a member in good
standing on account of his suspension.
On October 2, 2007, petitioner was charged with non-payment of union dues for the third time. He
did not attend the scheduled hearing. This time, he was meted the penalty of expulsion from the
union, per "unanimous approval" of the members of the Executive Board. His pleas for an appeal to
18
the General Membership Assembly were once more unheeded. 19
In 2008, during the freedom period and negotiations for a new collective bargaining agreement
(CBA) with MWC, petitioner joined another union, the Workers Association for Transparency,
Empowerment and Reform, All-Filipino Workers Confederation (WATER-AFWC). He was elected
union President. Other MWEU members were inclined to join WATER-AFWC, but MWEU director
Torres threatened that they would not get benefits from the new CBA. 20
The MWEU leadership submitted a proposed CBA which contained provisions to the effect that in
the event of retrenchment, non-MWEU members shall be removed first, and that upon the signing of
the CBA, only MWEU members shall receive a signing bonus. 21
Ruling of the Labor Arbiter
On October 13, 2008, petitioner filed a Complaint against respondents for unfair labor practices,
22
damages, and attorney’s fees before the National Labor Relations Commission (NLRC), Quezon
City, docketed as NLRC Case No. NCR-10-14255-08. In his Position Paper and other written
submissions, petitioner accused the respondents of illegal termination from MWEU in connection
23
with the events relative to his non-payment of union dues; unlawful interference, coercion, and
violation of the rights of MWC employees to self-organization – in connection with the proposed CBA
submitted by MWEU leadership, which petitioner claims contained provisions that discriminated
against non-MWEU members. Petitioner prayed in his Supplemental Position Paper that
respondents be held guilty of unfair labor practices and ordered to indemnify him moral damages in
the amount of P100,000.00, exemplary damages amounting to P50,000.00, and 10% attorney’s
fees.
In their joint Position Paper and other pleadings, respondents claimed that the Labor Arbiter had no
24
jurisdiction over the dispute, which is intra-union in nature; that the Bureau of Labor Relations (BLR)
was the proper venue, in accordance with Article 226 of the Labor Code and Section 1, Rule XI of
25
Department Order 40-03, series of 2003, of the DOLE; and that they were not guilty of unfair labor
26
practices, discrimination, coercion or restraint.
On May 29, 2009, Labor Arbiter Virginia T. Luyas-Azarraga issued her Decision which decreed as
27
follows:
Indeed the filing of the instant case is still premature. Section 5, Article X-Investigation Procedures
and Appeal Process of the Union Constitution and By-Laws provides that:
Section 5. Any dismissed and/or expelled member shall have the rights to appeal to the Executive
Board within seven (7) days from the date of notice of the said dismissal and/or expulsion, which in
[turn] shall be referred to the General Membership Assembly. In case of an appeal, a simple majority
of the decision of the Executive Board is imperative. The same shall be approved/disapproved by a
majority vote of the general membership assembly in a meeting duly called for the purpose.
On the basis of the foregoing, the parties shall exhaust first all the administrative remedies before
resorting to compulsory arbitration. Thus, instant case is referred back to the Union for the General
Assembly to act or deliberate complainant’s appeal on the decision of the Executive Board.
WHEREFORE PREMISES CONSIDERED, instant case is referred back to the Union level for the
General Assembly to act on complainant’s appeal.
SO ORDERED. 28
Ruling of the National Labor Relations Commission
Petitioner appealed before the NLRC, where the case was docketed as NLRC LAC No. 07-001913-
09. On March 15, 2010, the NLRC issued its Decision, declaring as follows:
29
Complainant imputes serious error to the Labor Arbiter when she decided as follows:
30
a. Referring back the subject case to the Union level for the General Assembly to act
on his appeal.
b. Not ruling that respondents are guilty of ULP as charged.
c. Not granting to complainant moral and exemplary damages and attorney’s fees.
Complainant, in support of his charges, claims that respondents restrained or coerced him in the
exercise of his right as a union member in violation of paragraph "a", Article 249 of the Labor
Code, particularly, in denying him the explanation as to whether there was observance of the
31
proper procedure in the increase of the membership dues from P100.00 to P200.00 per month.
Further, complainant avers that he was denied the right to appeal his suspension and expulsion in
accordance with the provisions of the Union’s Constitution and By-Laws. In addition, complainant
claims that respondents attempted to cause the management to discriminate against the members
of WATER-AFWC thru the proposed CBA.
Pertinent to the issue then on hand, the Labor Arbiter ordered that the case be referred back to the
Union level for the General Assembly to act on complainant’s appeal. Hence, these appeals.
After a careful look at all the documents submitted and a meticulous review of the facts, We find that
this Commission lacks the jurisdictional competence to act on this case.
Article 217 of the Labor Code, as amended, specifically enumerates the cases over which the
32
Labor Arbiters and the Commission have original and exclusive jurisdiction. A perusal of the record
reveals that the causes of action invoked by complainant do not fall under any of the enumerations
therein. Clearly, We have no jurisdiction over the same.
Moreover, pursuant to Section 1, Rule XI, as amended, DOLE Department Order No. 40-03 in
particular, Item A, paragraphs (h) and (j) and Item B, paragraph (a)(3), respectively, provide:
"A. Inter-Intra-Union disputes shall include:
"(h) violation of or disagreements over any provision of the Constitution and By-Laws
of a Union or workers’ association.
"(j) violation of the rights and conditions of membership in a Union or workers’

association.
"B. Other Labor Relations disputes, not otherwise covered by Article 217 of the Labor Code, shall
include –
"3. a labor union and an individual who is not a member of said union."
Clearly, the above-mentioned disputes and conflict fall under the jurisdiction of the Bureau of Labor
Relations, as these are inter/intra-union disputes.
WHEREFORE, the decision of the Labor Arbiter a quo dated May 29, 2009 is hereby declared NULL
and VOID for being rendered without jurisdiction and the instant complaint is DISMISSED.
SO ORDERED. 33
Petitioner moved for reconsideration, but in a June 16, 2010 Resolution, the motion was denied
34 35
and the NLRC sustained its Decision.
In a Petition for Certiorari filed with the CA and docketed as CA-G.R. SP No. 115639, petitioner
36
sought to reverse the NLRC Decision and be awarded his claim for damages and attorney’s fees on
account of respondents’ unfair labor practices, arguing among others that his charge of unfair labor
practices is cognizable by the Labor Arbiter; that the fact that the dispute is inter- or intra-union in
nature cannot erase the fact that respondents were guilty of unfair labor practices in interfering and
restraining him in the exercise of his right to self-organization as member of both MWEU and
WATER-AFWC, and in discriminating against him and other members through the provisions of the
proposed 2008 CBA which they drafted; that his failure to pay the increased union dues was proper
since the approval of said increase was arrived at without observing the prescribed voting procedure
laid down in the Labor Code; that he is entitled to an award of damages and attorney’s fees as a
result of respondents’ illegal acts in discriminating against him; and that in ruling the way it did, the
NLRC committed grave abuse of discretion.
On April 24, 2012, the CA issued the assailed Decision containing the following pronouncement:
The petition lacks merit.
Petitioner’s causes of action against MWEU are inter/intra-union disputes cognizable by the BLR
whose functions and jurisdiction are largely confined to union matters, collective bargaining registry,
and labor education. Section 1, Rule XI of Department Order (D.O.) No. 40-03, Series of 2003, of the
Department of Labor and Employment enumerates instances of inter/intra-union disputes, viz:
Section 1. Coverage. – Inter/intra-union disputes shall include:
xxxx
(b) conduct of election of union and workers’ association officers/nullification of election of union and
workers’ association officers;
(c) audit/accounts examination of union or workers’ association funds;
xxxx
(g) validity/invalidity of impeachment/ expulsion of union and workers’ association officers and
members;
xxxx
(j) violations of or disagreements over any provision in a union or workers’ association constitution
and by-laws;
xxxx
(l) violations of the rights and conditions of union or workers’ association membership;
xxxx
(n) such other disputes or conflicts involving the rights to self-organization, union membership and
collective bargaining –
(2) between and among members of a union or workers’ association.
In brief, "Inter-Union Dispute" refers to any conflict between and among legitimate labor unions
involving representation questions for purposes of collective bargaining or to any other conflict or
dispute between legitimate labor unions. "Intra-Union Dispute" refers to any conflict between and
among union members, including grievances arising from any violation of the rights and conditions of
membership, violation of or disagreement over any provision of the union’s constitution and by-laws,
or disputes arising from chartering or affiliation of union. On the other hand, the circumstances of
unfair labor practices (ULP) of a labor organization are stated in Article 249 of the Labor Code, to
wit:
Article 249. Unfair labor practices of labor organizations. It shall be unlawful for labor organization,
its officers, agents, or representatives to commit any of the following unfair labor practices:
(a) To restrain or coerce employees in the exercise of their right to self-organization;

Provided, That the labor organization shall have the right to prescribe its own rules
with respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,

including discrimination against an employee with respect to whom membership in
such organization has been denied or terminated on any ground other than the usual
terms and conditions under which membership or continuation of membership is
made available to other members;
xxxx
Applying the aforementioned rules, We find that the issues arising from petitioner’s right to
information on the increased membership dues, right to appeal his suspension and expulsion
according to CBL provisions, and right to vote and be voted on are essentially intra-union disputes;
these involve violations of rights and conditions of union membership. But his claim that a director of
MWEU warned that non-MWEU members would not receive CBA benefits is an inter-union dispute.
It is more of an "interference" by a rival union to ensure the loyalty of its members and to persuade
non-members to join their union. This is not an actionable wrong because interfering in the exercise
of the right to organize is itself a function of self-organizing. As long as it does not amount to
37
restraint or coercion, a labor organization may interfere in the employees’ right to self-
organization. Consequently, a determination of validity or illegality of the alleged acts necessarily
38
touches on union matters, not ULPs, and are outside the scope of the labor arbiter’s jurisdiction.
As regards petitioner’s other accusations, i.e., discrimination in terms of meting out the penalty of
expulsion against him alone, and attempt to cause the employer, MWC, to discriminate against non-
MWEU members in terms of retrenchment or reduction of personnel, and signing bonus, while We
may consider them as falling within the concept of ULP under Article 249(a) and (b), still, petitioner’s
complaint cannot prosper for lack of substantial evidence. Other than his bare allegation, petitioner
offered no proof that MWEU did not penalize some union members who failed to pay the increased
dues. On the proposed discriminatory CBA provisions, petitioner merely attached the pages
containing the questioned provisions without bothering to reveal the MWEU representatives
responsible for the said proposal. Article 249 mandates that "x x x only the officers, members of the
governing boards, representatives or agents or members of labor associations or organizations who
have actually participated in, authorized or ratified unfair labor practices shall be held criminally
liable." Plain accusations against all MWEU officers, without specifying their actual participation, do
not suffice. Thus, the ULP charges must necessarily fail.
In administrative and quasi-judicial proceedings, only substantial evidence is necessary to establish

the case for or against a party. Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. Petitioner failed to discharge the
burden of proving, by substantial evidence, the allegations of ULP in his complaint. The NLRC,
therefore, properly dismissed the case.
FOR THESE REASONS, the petition is DISMISSED.
SO ORDERED. 39
Thus, the instant Petition.
Issue
In an August 28, 2013 Resolution, this Court resolved to give due course to the Petition, which
40
claims that the CA erred:
A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION CONFLICTS NEGATES THE

COMPLAINT FOR UNFAIR LABOR PRACTICES AGAINST A LABOR ORGANIZATION AND ITS
OFFICERS, AND IN AFFIRMING THAT THE NLRC PROPERLY DISMISSED THE CASE FOR
ALLEGED LACK OF JURISDICTION.
B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR PRACTICES

UNDER ARTICLE 249(a) AND (b) OF THE LABOR CODE.
C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER AGAINST MEMBERS OF

A RIVAL UNION IS (sic) MERELY AN "INTERFERENCE" AND DO NOT AMOUNT TO
"RESTRAINT" OR "COERCION".
D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL EVIDENCE IN

PROVING RESPONDENTS’ SPECIFIC ACTS OF UNFAIR LABOR PRACTICES.
E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO PETITIONER FOR

MORAL AND EXEMPLARY DAMAGES, AND ATTORNEY’S FEES. 41
Petitioner’s Arguments
Praying that the assailed CA dispositions be set aside and that respondents be declared guilty of
unfair labor practices under Article 249(a) and (b) and adjudged liable for damages and attorney’s
fees as prayed for in his complaint, petitioner maintains in his Petition and Reply that respondents
42
are guilty of unfair labor practices which he clearly enumerated and laid out in his pleadings below;
that these unfair labor practices committed by respondents fall within the jurisdiction of the Labor
Arbiter; that the Labor Arbiter, the NLRC, and the CA failed to rule on his accusation of unfair labor
practices and simply dismissed his complaint on the ground that his causes of action are intra- or
inter-union in nature; that admittedly, some of his causes of action involved intra- or inter-union
disputes, but other acts of respondents constitute unfair labor practices; that he presented
substantial evidence to prove that respondents are guilty of unfair labor practices by failing to
observe the proper procedure in the imposition of the increased monthly union dues, and in unduly
imposing the penalties of suspension and expulsion against him; that under the union’s constitution
and by-laws, he is given the right to appeal his suspension and expulsion to the general membership
assembly; that in denying him his rights as a union member and expelling him, respondents are
guilty of malice and evident bad faith; that respondents are equally guilty for violating and curtailing
his rights to vote and be voted to a position within the union, and for discriminating against non-
MWEU members; and that the totality of respondents’ conduct shows that they are guilty of unfair
labor practices.
Respondent’s Arguments
In their joint Comment, respondents maintain that petitioner raises issues of fact which are beyond
43
the purview of a petition for review on certiorari; that the findings of fact of the CA are final and
conclusive; that the Labor Arbiter, NLRC, and CA are one in declaring that there is no unfair labor
practices committed against petitioner; that petitioner’s other allegations fall within the jurisdiction of
the BLR, as they refer to intra- or inter-union disputes between the parties; that the issues arising
from petitioner’s right to information on the increased dues, right to appeal his suspension and
expulsion, and right to vote and be voted upon are essentially intra-union in nature; that his
allegations regarding supposed coercion and restraint relative to benefits in the proposed CBA do
not constitute an actionable wrong; that all of the acts questioned by petitioner are covered by
Section 1, Rule XI of Department Order 40-03, series of 2003 as intra-/inter-union disputes which do
not fall within the jurisdiction of the Labor Arbiter; that in not paying his union dues, petitioner is guilty
of insubordination and deserved the penalty of expulsion; that petitioner failed to petition to convene
the general assembly through the required signature of 30% of the union membership in good
standing pursuant to Article VI, Section 2(a) of MWEU’s Constitution and By-Laws or by a petition of
the majority of the general membership in good standing under Article VI, Section 3; and that for his
failure to resort to said remedies, petitioner can no longer question his suspension or expulsion and
avail of his right to appeal.
Our Ruling
The Court partly grants the Petition.
In labor cases, issues of fact are for the labor tribunals and the CA to resolve, as this Court is not a
trier of facts. However, when the conclusion arrived at by them is erroneous in certain respects, and
would result in injustice as to the parties, this Court must intervene to correct the error. While the
Labor Arbiter, NLRC, and CA are one in their conclusion in this case, they erred in failing to resolve
petitioner’s charge of unfair labor practices against respondents.
It is true that some of petitioner’s causes of action constitute intra-union cases cognizable by the
BLR under Article 226 of the Labor Code.
An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the union’s constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of Department Order No. 40-03,
Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes x x
x.
44
However, petitioner’s charge of unfair labor practices falls within

the original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor
Code. In addition, Article 247 of the same Code provides that "the civil aspects of all cases involving
unfair labor practices, which may include claims for actual, moral, exemplary and other forms of
damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor
Arbiters."
Unfair labor practices may be committed both by the employer under Article 248 and by labor
organizations under Article 249 of the Labor Code, which provides as follows:
45
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization.
However, a labor organization shall have the right to prescribe its own rules with respect to
the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee, including

discrimination against an employee with respect to whom membership in such organization
has been denied or to terminate an employee on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to
other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any
money or other things of value, in the nature of an exaction, for services which are not
performed or not to be performed, including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of governing
boards, representatives or agents or members of labor associations or organizations who have
actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).
Petitioner contends that respondents committed acts constituting unfair labor practices – which
charge was particularly laid out in his pleadings, but that the Labor Arbiter, the NLRC, and the CA
ignored it and simply dismissed his complaint on the ground that his causes of action were intra- or
inter-union in nature. Specifically, petitioner claims that he was suspended and expelled from MWEU
illegally as a result of the denial of his right to appeal his case to the general membership assembly
in accordance with the union’s constitution and by-laws. On the other hand, respondents counter
that such charge is intra-union in nature, and that petitioner lost his right to appeal when he failed to
Section 3.
Under Article VI, Section 2(a) of MWEU’s Constitution and By-Laws, the general membership
assembly has the power to "review revise modify affirm or repeal [sic] resolution and decision of the
Executive Board and/or committees upon petition of thirty percent (30%) of the Union in good
standing," and under Section 2(d), to "revise, modify, affirm or reverse all expulsion cases." Under
46 47
Section 3 of the same Article, "[t]he decision of the Executive Board may be appealed to the General
Membership which by a simple majority vote reverse the decision of said body. If the general
Assembly is not in session the decision of the Executive Board may be reversed by a petition of the
majority of the general membership in good standing." And, in Article X, Section 5, "[a]ny dismissed
48
and/or expelled member shall have the right to appeal to the Executive Board within seven days
from notice of said dismissal and/or expulsion which, in [turn] shall be referred to the General
membership assembly. In case of an appeal, a simple majority of the decision of the Executive
Board is imperative. The same shall be approved/disapproved by a majority vote of the general
membership assembly in a meeting duly called for the purpose." 49
In regard to suspension of a union member, MWEU’s Constitution and By-Laws provides under
Article X, Section 4 thereof that "[a]ny suspended member shall have the right to appeal within three
(3) working days from the date of notice of said suspension. In case of an appeal a simple majority
of vote of the Executive Board shall be necessary to nullify the suspension."
Thus, when an MWEU member is suspended, he is given the right to appeal such suspension within
three working days from the date of notice of said suspension, which appeal the MWEU Executive
Board is obligated to act upon by a simple majority vote. When the penalty imposed is expulsion, the
expelled member is given seven days from notice of said dismissal and/or expulsion to appeal to the
Executive Board, which is required to act by a simple majority vote of its members. The Board’s
decision shall then be approved/ disapproved by a majority vote of the general membership
assembly in a meeting duly called for the purpose. 1avvphi1
The documentary evidence is clear that when petitioner received Borela’s August 21, 2007 letter
informing him of the Executive Board’s unanimous approval of the grievance committee
recommendation to suspend him for the second time effective August 24, 2007, he immediately and
timely filed a written appeal. However, the Executive Board – then consisting of respondents Borela,
Tierra, Bolo, Casañas, Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan, Cancino,
Maga, Cometa, Mancenido, and two others who are not respondents herein – did not act thereon.
Then again, when petitioner was charged for the third time and meted the penalty of expulsion from
MWEU by the unanimous vote of the Executive Board, his timely appeal was again not acted upon
by said board – this time consisting of respondents Borela, Quebral, Tierra, Imana, Rendon, Yeban,
Cancino, Torres, Montemayor, Mancenido, Mandilag, Fernandez, Buenaventura, Apilado, Maga,
Barbero, Cometa, Bolo, and Manlapaz.
Thus, contrary to respondents’ argument that petitioner lost his right to appeal when he failed to
Section 3, this Court finds that petitioner was illegally suspended for the second time and thereafter
unlawfully expelled from MWEU due to respondents’ failure to act on his written appeals. The
required petition to convene the general assembly through the required signature of 30% (under
Article VI, Section 2[a]) or majority (under Article VI, Section 3) of the union membership does not
apply in petitioner’s case; the Executive Board must first act on his two appeals before the matter
could properly be referred to the general membership. Because respondents did not act on his two
appeals, petitioner was unceremoniously suspended, disqualified and deprived of his right to run for
the position of MWEU Vice-President in the September 14, 2007 election of officers, expelled from
MWEU, and forced to join another union, WATER-AFWC. For these, respondents are guilty of unfair
labor practices under Article 249 (a) and (b) – that is, violation of petitioner’s right to self-
organization, unlawful discrimination, and illegal termination of his union membership – which case
falls within the original and exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217
of the Labor Code.
The primary concept of unfair labor practices is stated in Article 247 of the Labor Code, which states:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof. –– Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical
to the legitimate interests of both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-management relations.
"In essence, [unfair labor practice] relates to the commission of acts that transgress the workers’
right to organize." "[A]ll the prohibited acts constituting unfair labor practice in essence relate to the
50
workers’ right to self-organization." "[T]he term unfair labor practice refers to that gamut of offenses
51
defined in the Labor Code which, at their core, violates the constitutional right of workers and
employees to self-organization." 52
Guaranteed to all employees or workers is the ‘right to self-organization and to form, join, or assist
labor organizations of their own choosing for purposes of collective bargaining.’ This is made plain
provides as follows:
ART. 243. Coverage and employees’ right to self-organization. — All persons employed in
educational institutions whether operating for profit or not, shall have the right to self-organization
and to form, join, or assist labor organizations of their own choosing for purposes or collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and
protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to ‘interfere
with, restrain or coerce employees in the exercise of their right to self-organization.’ Similarly, Article
249 (a) makes it an unfair labor practice for a labor organization to ‘restrain or coerce employees in
the exercise of their rights to self-organization . . .’
xxxx
interests.
53
As members of the governing board of MWEU, respondents are presumed to know, observe, and
apply the union’s constitution and by-laws. Thus, their repeated violations thereof and their disregard
of petitioner’s rights as a union member – their inaction on his two appeals which resulted in his
suspension, disqualification from running as MWEU officer, and subsequent expulsion without being
accorded the full benefits of due process – connote willfulness and bad faith, a gross disregard of his
rights thus causing untold suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith
implies breach of faith and willful failure to respond to plain and well understood obligation." This
54
warrants an award of moral damages in the amount of P100,000.00. Moreover, the Civil Code
provides:
Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of
another person shall be liable to the latter for damages:
xxxx
(12) The right to become a member of associations or societies for purposes not contrary to law;
In Vital-Gozon v. Court of Appeals, this Court declared, as follows:

55
Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. They may be
recovered if they are the proximate result of the defendant’s wrongful act or omission. The instances
when moral damages may be recovered are, inter alia, ‘acts and actions referred to in Articles 21,
26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,’ which, in turn, are found in the Chapter on
Human Relations of the Preliminary Title of the Civil Code. x x x
Under the circumstances, an award of exemplary damages in the amount of P50,000.00, as prayed
for, is likewise proper. "Exemplary damages are designed to permit the courts to mould behavior that
has socially deleterious consequences, and their imposition is required by public policy to suppress
the wanton acts of the offender." This should prevent respondents from repeating their mistakes,
56
which proved costly for petitioner. 1âwphi1
Under Article 2229 of the Civil Code, ‘[e]xemplary or corrective damages are imposed, by way of
example or correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages.’ As this court has stated in the past: ‘Exemplary damages are designed by
our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence
by creating negative incentives or deterrents against such behaviour.’ 57
Finally, petitioner is also entitled to attorney’s fees equivalent to 10 per cent (10%) of the total
award. The unjustified acts of respondents clearly compelled him to institute an action primarily to
vindicate his rights and protect his interest. Indeed, when an employee is forced to litigate and incur
expenses to protect his rights and interest, he is entitled to an award of attorney’s fees.
58
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April 24, 2012 Decision of the
Court of Appeals in CA-G.R. SP No. 115639 is hereby MODIFIED, in that all of the respondents -
except for Carlos Villa, Ric Briones, and Chito Bernardo - are declared guilty of unfair labor practices
and ORDERED TO INDEMNIFY petitioner Allan M. Mendoza the amounts of Pl00,000.00 as and by
way of moral damages, PS0,000.00 as exemplary damages, and attorney's fees equivalent to
10 per cent (10%) of the total award.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION JOSE CATRAL MENDOZA


Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION

Chief Justice
Footnotes
1
Rollo, pp. 7-42.
Id. at 43-54; penned by Associate Justice Mario V. Lopez and concurred in by Associate
2
Justices Fernanda Lampas Peralta and Socorro B. Inting.
3
Id. at 346-369.
4
Id. at 9, 44.
5
Id. at 55.
6
Id. at 56-57.
7
Id. at 139-176, which provide, as follows:
ARTICLE IX
DISCIPLINARY GROUNDS/OFFENSES
Section 1. The following grounds for disciplinary action, suspension or expulsion of

members as acts or deeds inimical to the interests and welfare of the Union and/or
its officers and members. Any officer or member may be penalized for committing
any following offenses by fines, suspension, or expulsion:
xxxx
g. Non-payment of dues and other monetary obligation due the Union for a
reasonable period of time:
1st Offense - Letter reprimand

2nd Offense - Suspension of right benefit privileges for 30 days
3rd Offense - Expulsion from Union membership and recommendation for

termination of employment
8
Rollo, p. 61.
9
Cancino, Maga, Montemayor, Fernandez, Torres, Mancenido, Bolo, Quebral, Casañas,

Pagulayan, Tierra, Cometa, Rendon, and two (2) others who are not respondents herein.
10
Id. at 62.
11
Stating that:
ARTICLE V
DUTIES, RESPONSIBILITIES, RIGHTS, PRIVILEGES AND OBLIGATIONS OF
UNION MEMBERSHIP
xxxx
Section 2. Rights and Privileges. All Union members in good standing shall have the
following rights and privileges:
xxxx
g. To appeal to the General Membership Assembly any arbitrary resolution, policy

and rule that may be promulgated by the Executive Board;
12
Rollo, p. 63.
13
Id. at 64.
14
Id. at 66.
15
Id. at 68.
16
Tierra, Bolo, Casañas, Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan,

Cancino, Maga, Cometa, Mancenido, and two (2) others who are not respondents herein.
17
Id. at 69.
18
Quebral, Tierra, Imana, Rendon, Yeban, Cancino, Torres, Montemayor, Mancenido,

Mandilag, Fernandez, Buenaventura, Apilado, Maga, Barbero, Cometa, Bolo, and Manlapaz.
19
Id. at 74-80, 226-227.
20
Id. at 46.
Id. at 47.
21
Id. at 87-88.
22
Id. at 89-96, 97-108, 231-238, 254-262.

23
Id. at 109-137, 239-251, 272-277.

24
ART. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and the Labor
25
Relations Divisions in the regional offices of the Department of Labor, shall have original and
exclusive authority to act, at their own initiative or upon request of either or both parties, on
all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor-management relations in all workplaces, whether agricultural or non-
agricultural, except those arising from the implementation or interpretation of collective
bargaining agreements which shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to
extension by agreement of the parties. (Art. 226 and other specific provisions of the Labor
Code have since been renumbered as a result of the passage of Republic Act No. 10151
[2011]).
RULE XI – INTER/INTRA-UNION DISPUTES AND OTHER RELATED LABOR

26
RELATIONS
DISPUTES
SECTION 1. Coverage. - Inter/intra-union disputes shall include:
(a) cancellation of registration of a labor organization filed by its members or

by another labor organization;
(b) conduct of election of union and workers association officers/nullification

of election of union and workers association officers;
(c) audit/accounts examination of union or workers association funds;
(d) deregistration of collective bargaining agreements;
(e) validity/invalidity of union affiliation or disaffiliation;
(f) validity/invalidity of acceptance/non-acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion of union and workers

association officers and members;
(h) validity/invalidity of voluntary recognition;
(i) opposition to application for union and CBA registration;

(j) violations of or disagreements over any provision in a union or workers
association constitution and by-laws;
(k) disagreements over chartering or registration of labor organizations and

collective bargaining agreements;
(l) violations of the rights and conditions of union or workers association

membership;
(m) violations of the rights of legitimate labor organizations, except

interpretation of collective bargaining agreements;
(n) such other disputes or conflicts involving the rights to self-organization,

union membership and collective bargaining
(2) between and among members of a union or workers association.
Rollo, pp. 279-281.

27
Id. at 280-281.
28
Id. at 322-326; penned by Commissioner Isabel G. Panganiban-Ortiguerra and concurred

29
in by Presiding Commissioner Benedicto R. Palacol and Commissioner Nieves Vivar-de

Castro.
Herein petitioner.
30
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for
31
a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-

organization. However, a labor organization shall have the right to prescribe its own
1âwphi1
rules with respect to the acquisition or retention of membership;
(b) x x x x
ART. 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as otherwise
32
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
employment;

exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective

bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
Rollo, pp. 323-325.

33
Id. at 327-337.
34
Id. at 343-345.
35
Id. at 346-369.
36
Citing Azucena, Jr., Cesario A., The Labor Code with Comments and Cases, Vol. II, 2004
37
5th Edition, p. 256.
Id.
38
Rollo, pp. 50-54.

39
Id. at 449-450.
40
Id. at 19.
41
Id. at 440-447.
42
Id. at 403-435.
43
Employees Union of Bayer Phils. v. Bayer Philippines, Inc., 651 Phil. 190, 203 (2010),
44
citing C.A. Azucena, Jr., Vol. II, THE LABOR CODE WITH COMMENTS AND CASES, 2004
ed., p. 111.
As earlier stated, provisions of the Labor Code, from Article 156 onward, have since been
45
renumbered as a result of the passage of Republic Act No. 10151.
Rollo, p. 144.
46
Id.
47
Id.
48
Id. at 158.
49
Baptista v. Villanueva, G.R. No. 194709, July 31, 2013, 703 SCRA 48, 57.
50
Culili v. Eastern Telecommunications Philippines, Inc., 657 Phil. 342, 368 (2011).
51
Pepsi-Cola Products Philippines, Inc. v. Molon, G.R. No. 175002, February 18, 2013, 691
52
SCRA 113, 133.
Reyes v. Trajano, G.R. No. 84433, June 2, 1992, 209 SCRA 484, 488-489.
53
Sanchez v. Republic, 618 Phil. 228, 236 (2009).

54
354 Phil. 128, 151 (1998).

55
U-Bix Corporation v. Bandiola, 552 Phil. 633, 651 (2007).

56
Montinola v. Philippine Airlines, G.R. No. 198656, September 8, 2014, 734 SCRA 439, 464.
57
Tangga-an v. Philippine Transmarine Carriers, Inc., G.R. No. 180636, March 13, 2013, 693
58
SCRA 340, 356, citing Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East

Zone Union v. Manila Water Company, Inc., 676 Phil. 262 (2011).

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 178647 February 13, 2009
GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS, Petitioner,

vs.
COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS
and THE NATIONAL LABOR RELATIONS COMMISSION, Respondents.
RESOLUTION
NACHURA, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedure,
petitioner General Santos Coca-Cola Plant Free Workers Union-Tupas (Union) is seeking the
reversal of the April 18, 2006 Decision1 and May 30, 2007 Resolution2 of the Court of Appeals in CA-
G.R. SP No. 80916. The CA affirmed the January 31, 2003 and August 29, 2003 Resolutions3 of the
National Labor Relations Commission (NLRC) in favor of respondent Coca-Cola Bottlers Phil., Inc.
(CCBPI).
Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due to the Asian
economic crisis, decrease in sales, and tougher competition. To curb the negative effects on the
company, it implemented three (3) waves of an Early Retirement Program.4 Meanwhile, there was an
inter-office memorandum sent to all of CCBPI’s Plant Human Resources Managers/Personnel
Officers, including those of the CCBPI General Santos Plant (CCBPI Gen San) mandating them to
put on hold "all requests for hiring to fill in vacancies in both regular and temporary positions in [the]
Head Office and in the Plants." Because several employees availed of the early retirement program,
vacancies were created in some departments, including the production department of CCBPI Gen
San, where members of petitioner Union worked. This prompted petitioner to negotiate with the
Labor Management Committee for filling up the vacancies with permanent employees. No resolution
was reached on the matter.5
Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services
Corporation (JLBP), a company in the business of providing labor and manpower services, including
janitorial services, messengers, and office workers to various private and government offices.6
On January 21, 2002, petitioner filed with the National Conciliation and Mediation Board (NCMB),
Regional Branch 12, a Notice of Strike on the ground of alleged unfair labor practice committed by
CCBPI Gen San for contracting-out services regularly performed by union members ("union
busting"). After conciliation and mediation proceedings before the NCMB, the parties failed to come
to an amicable settlement. On July 3, 2002, CCBPI filed a Petition for Assumption of Jurisdiction with
the Office of the Secretary of Labor and Employment. On July 26, 2002, the Secretary of Labor
issued an Order enjoining the threatened strike and certifying the dispute to the NLRC for
compulsory arbitration.71avvphi1
In a Resolution8 dated January 31, 2003, the NLRC ruled that CCBPI was not guilty of unfair labor
practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the validity of the "Going-
to-the-Market" (GTM) system implemented by the company, which called for restructuring its selling
and distribution system, leading to the closure of certain sales offices and the elimination of
conventional sales routes. The NLRC held that petitioner failed to prove by substantial evidence that
the system was meant to curtail the right to self-organization of petitioner’s members. Petitioner filed
a motion for reconsideration, which the NLRC denied in a Resolution9 dated August 29, 2003.
Hence, petitioner filed a Petition for Certiorari before the CA.
The CA issued the assailed Decision10 on April 18, 2006 upholding the NLRC’s finding that CCBPI
was not guilty of unfair labor practice. The CA based its decision on the validity of CCBPI’s
contracting out of jobs in its production department. It held that the contract between CCBPI and
JLBP did not amount to labor-only contracting. It found that JLBP was an independent contractor
and that the decision to contract out jobs was a valid exercise of management prerogative to meet
exigent circumstances. On the other hand, petitioner failed to adduce evidence to prove that
contracting out of jobs by the company resulted in the dismissal of petitioner’s members, prevented
them from exercising their right to self-organization, led to the Union’s demise or that their group was
singled out by the company. Consequently, the CA declared that CCBPI was not guilty of unfair
labor practice.
Its motion for reconsideration having been denied,11 petitioner now comes to this Court seeking the
reversal of the CA Decision.
The petition is bereft of merit. Hence, we deny the Petition.
Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be raised in a
Petition for Review on Certiorari.12
There is a question of law if the issue raised is capable of being resolved without need of reviewing
the probative value of the evidence. The resolution of the issue must rest solely on what the law
provides on a given set of circumstances. Once it is clear that the issue invites a review of the
evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the
credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation
to one another, the issue in that query is factual.13
An examination of the issues raised by petitioner reveals that they are questions of fact. The issues
raised, i.e., whether JLBP is an independent contractor, whether CCBPI’s contracting-out of jobs to
JLBP amounted to unfair labor practice, and whether such action was a valid exercise of
management prerogative, call for a re-examination of evidence, which is not within the ambit of this
Court’s jurisdiction.
Moreover, factual findings of the NLRC, an administrative agency deemed to have acquired
expertise in matters within its jurisdiction, are generally accorded not only respect but finality
especially when such factual findings are affirmed by the CA.14
Furthermore, we find no reversible error in the assailed Decision. 1avvphi1
It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San
was due to the GTM system, which actually affected CCBPI’s sales and marketing departments, and
had nothing to do with petitioner’s complaint. However, this does not diminish the NLRC’s finding
that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged the services
of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head
Office.
On the other hand, the CA squarely addressed the issue of job contracting in its assailed Decision
and Resolution. The CA itself examined the facts and evidence of the parties15 and found that, based
on the evidence, CCBPI did not engage in labor-only contracting and, therefore, was not guilty of
unfair labor practice.
The NLRC found – and the same was sustained by the CA – that the company’s action to contract-
out the services and functions performed by Union members did not constitute unfair labor practice
as this was not directed at the members’ right to self-organization.
Article 248 of the Labor Code provides:
ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. – It shall be unlawful for an employer to
commit any of the following unfair labor practices:
xxx
(c) To contract out services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their right to self-organization;
xxx
Unfair labor practice refers to "acts that violate the workers’ right to organize." The prohibited acts
are related to the workers’ right to self-organization and to the observance of a CBA. Without that
element, the acts, even if unfair, are not unfair labor practices.16
Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor
practice. It was the Union that had the burden of adducing substantial evidence to support its
allegations of unfair labor practice,17 which burden it failed to discharge.
WHEREFORE, the foregoing premises considered, the Petition is DENIED. The assailed Decision
and Resolution of the Court of Appeals in CA-G.R. SP No. 80916 are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO

DIOSDADO M. PERALTA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Resolution were reached in consultation before the case
Associate Justice
CERTIFICATION
certify that the conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Penned by Associate Justice Teresita Dy-Liacco Flores, with Associate Justices Rodrigo F.
Lim, Jr. and Ramon R. Garcia, concurring; rollo, pp. 55-72.
2
Penned by Associate Justice Teresita Dy-Liacco Flores, with Associate Justices Rodrigo F.
Lim, Jr. and Jane Aurora C. Lantion, concurring; id. at 73-76.
3
Rollo, pp. 77-87.
4
Id. at 56.
5
Id. at 58-59.
6
Id.
7
Id. at 62.
8
Id. at 77-82.
9
Id. at 83-88.
10
Id. at 55-72.
11
Id. at 73-76.
12
Revised Rules on Civil Procedure, Rule 45, Section 1.
Juaban, et al. v. Espina, et al., G.R. No. 170049, March 14, 2008, 548 SCRA 588, 608,
13
citing Microsoft Corporation v. Maxicorp, Inc., 438 SCRA 224, 230-231 (2004) and Morales
v. Skills International Company, 500 SCRA 186, 194 (2006).
Rowell Industrial Corporation v. Court of Appeals, et al., G.R. No. 167714, March 7, 2007,
14
517 SCRA 691, 706, citing Land and Housing Development Corporation v. Esquillo, 471
SCRA 488, 494 (2005).
15
Rollo, p. 66.
Philcom Employees Union v. Philippine Global Communication, et al., G.R. No. 144315,
16
July 17, 2006, 495 SCRA 214, 235, citing Great Pacific Life Employees Union v. Great
Pacific Life Assurance Corporation, 303 SCRA 113 (1999) and Cesario A. Azucena, Jr., II
The Labor Code with Comments and Cases 210 (5th ed. 2004) [The Labor Code with
Comments and Cases].
17
See Tiu, et al. v. National Labor Relations Commission, et al., 343 Phil. 478, 485 (1997).

SUPREME COURT
Manila
SPECIAL THIRD DIVISION
G.R. Nos. 158930-31 March 3, 2008
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS -

KILUSANG MAYO UNO (UFE-DFA-KMU), petitioner,
vs.
NESTLÉ PHILIPPINES, INCORPORATED, respondent.
x------------------------------------------x
G.R. Nos. 158944-45 March 3, 2008
NESTLÉ PHILIPPINES, INCORPORATED, petitioner,

vs.
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS -
KILUSANG MAYO UNO (UFE-DFA-KMU), respondent.
RESOLUTION
CHICO-NAZARIO, J.:
On 22 August 2006, this Court promulgated its Decision1 in the above-entitled cases, the dispositive
part of which reads –
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seeking that
Nestlé be declared to have committed unfair labor practice in allegedly setting a precondition
to bargaining is DENIED. The Petition in G.R. No. 158944-45, however, is PARTLY
GRANTED in that we REVERSE the ruling of the Court of Appeals in CA G.R. SP No. 69805
in so far as it ruled that the Secretary of the DOLE gravely abused her discretion in failing to
confine her assumption of jurisdiction power over the ground rules of the CBA negotiations;
but the ruling of the Court of Appeals on the inclusion of the Retirement Plan as a valid issue
in the collective bargaining negotiations between UFE-DFA-KMU and Nestlé is AFFIRMED.
The parties are directed to resume negotiations respecting the Retirement Plan and to take
action consistent with the discussions hereinabove set forth. No costs.
Subsequent thereto, Nestlé Philippines, Incorporated (Nestlé) filed a Motion for Clarification2 on 20
September 2006; while Union of Filipro Employees – Drug, Food and Allied Industries Union –
Kilusang Mayo Uno (UFE-DFA-KMU), on 21 September 2006, filed a Motion for Partial
Reconsideration3 of the foregoing Decision.
The material facts of the case, as determined by this Court in its Decision, may be summarized as
follows:
UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of
Nestlé belonging to the latter’s Alabang and Cabuyao plants. On 4 April 2001, as the existing
collective bargaining agreement (CBA) between Nestlé and UFE-DFA-KMU4 was to end on 5 June
2001,5 the Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestlé of
their intent to "open [our] new Collective Bargaining Negotiation for the year 2001-2004 x x x as early
as June 2001."6 In response thereto, Nestlé informed them that it was also preparing its own
counter-proposal and proposed ground rules to govern the impending conduct of the CBA
negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only)7, Nestlé reiterated
its stance that "unilateral grants, one-time company grants, company-initiated policies and
programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and
Calling Pay Premium, are by their very nature not proper subjects of CBA negotiations and therefore
shall be excluded therefrom."8
Dialogue between the company and the union thereafter ensued.
On 14 August 2001, however, Nestlé requested9 the National Conciliation and Mediation Board
(NCMB), Regional Office No. IV, Imus, Cavite, to conduct preventive mediation proceedings
between it and UFE-DFA-KMU owing to an alleged impasse in said dialogue; i.e., that despite fifteen
(15) meetings between them, the parties failed to reach any agreement on the proposed CBA.
Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Notice of
Strike10 on 31 October 2001 with the NCMB, complaining, in essence, of a bargaining deadlock
pertaining to economic issues, i.e., "retirement (plan), panel composition, costs and attendance, and
CBA".11 On 07 November 2001, another Notice of Strike12 was filed by the union, this time predicated
on Nestlé’s alleged unfair labor practices, that is, bargaining in bad faith by setting pre-conditions in
the ground rules and/or refusing to include the issue of the Retirement Plan in the CBA negotiations.
The result of a strike vote conducted by the members of UFE-DFA-KMU yielded an overwhelming
approval of the decision to hold a strike.13
On 26 November 2001, prior to holding the strike, Nestlé filed with the DOLE a Petition for
Assumption of Jurisdiction,14 praying for the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas, to
assume jurisdiction over the current labor dispute in order to effectively enjoin any impending strike
by the members of the UFE-DFA-KMU at the Nestlé’s Cabuyao Plant in Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an Order15 assuming jurisdiction over the subject
labor dispute. The fallo of said Order states that:
CONSIDERING THE FOREGOING, this Office hereby assumes jurisdiction over the labor
dispute at the Nestlé Philippines, Inc. (Cabuyao Plant) pursuant to Article 263 (g) of the
Labor Code, as amended.
Accordingly, any strike or lockout is hereby enjoined. The parties are directed to cease and
desist from committing any act that might lead to the further deterioration of the current labor
relations situation.
The parties are further directed to meet and convene for the discussion of the union
proposals and company counter-proposals before the National Conciliation and Mediation
Board (NCMB) who is hereby designated as the delegate/facilitator of this Office for this
purpose. The NCMB shall report to this Office the results of this attempt at conciliation and
delimitation of the issues within thirty (30) days from the parties’ receipt of this Order, in no
case later than December 31, 2001. If no settlement of all the issues is reached, this Office
shall thereafter define the outstanding issues and order the filing of position papers for a
ruling on the merits.
UFE-DFA-KMU sought reconsideration16 of the above but nonetheless moved for additional time to
file its position paper as directed by the Assumption of Jurisdiction Order.
On 14 January 2002, Sec. Sto. Tomas denied said motion for reconsideration.
On 15 January 2002, despite the order enjoining the conduct of any strike or lockout and conciliation
efforts by the NCMB, the employee members of UFE-DFA-KMU at Nestlé’s Cabuyao Plant went on
strike.
In view of the above, in an Order dated on 16 January 2002, Sec. Sto. Tomas directed: (1) the
members of UFE-DFA-KMU to return-to-work within twenty-four (24) hours from receipt of such
Order; (2) Nestlé to accept back all returning workers under the same terms and conditions existing
preceding to the strike; (3) both parties to cease and desist from committing acts inimical to the on-
going conciliation proceedings leading to the further deterioration of the situation; and (4)
the submission of their respective position papers within ten (10) days from receipt thereof. But
notwithstanding the Return-to-Work Order, the members of UFE-DFA-KMU continued with their
strike, thus, prompting Sec. Sto. Tomas to seek the assistance of the Philippine National Police
(PNP) for the enforcement of said order.
On 7 February 2002, Nestlé and UFE-DFA-KMU filed their respective position papers. Nestlé
addressed several issues concerning economic provisions of the CBA as well as the non-inclusion of
the issue of the Retirement Plan in the collective bargaining negotiations. On the other hand, UFE-
DFA-KMU limited itself to the issue of whether or not the retirement plan was a mandatory subject in
its CBA negotiations.
On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU the chance to tender its stand on
the other issues raised by Nestlé but not covered by its initial position paper by way of
a Supplemental Position Paper.
UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings, one of
which was a Manifestation with Motion for Reconsideration of the Order dated February 11,
2002 assailing the Order of February 11, 2002 for supposedly being contrary to law, jurisprudence
and the evidence on record. The union posited that Sec. Sto. Tomas "could only assume jurisdiction
over the issues mentioned in the notice of strike subject of the current dispute,"17 and that the
Amended Notice of Strike it filed did not cite, as one of the grounds, the CBA deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for reconsideration of UFE-DFA-KMU.
Thereafter, UFE-DFA-KMU filed a Petition for Certiorari18 before the Court of Appeals, alleging that
Sec. Sto. Tomas committed grave abuse of discretion amounting to lack or excess of jurisdiction
when she issued the Orders of 11 February 2002 and 8 March 2002.
In the interim, in an attempt to finally resolve the crippling labor dispute between the parties, then
Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with an Order19 dated 02 April 2002,
ruling that:
a. we hereby recognize that the present Retirement Plan at the Nestlé Cabuyao Plant is a
unilateral grant that the parties have expressly so recognized subsequent to the Supreme
Court’s ruling in Nestlé, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4, 1991, and is
therefore not a mandatory subject for bargaining;
b. the Union’s charge of unfair labor practice against the Company is hereby dismissed for
lack of merit;
c. the parties are directed to secure the best applicable terms of the recently concluded
CBSs between Nestlé Phils. Inc. and it eight (8) other bargaining units, and to adopt these as
the terms and conditions of the Nestlé Cabuyao Plant CBA;
d. all union demands that are not covered by the provisions of the CBAs of the other eight (8)
bargaining units in the Company are hereby denied;
e. all existing provisions of the expired Nestlé Cabuyao Plant CBA without any counterpart in
the CBAs of the other eight bargaining units in the Company are hereby ordered maintained
as part of the new Nestlé Cabuyao Plant CBA;
f. the parties shall execute their CBA within thirty (30) days from receipt of this Order,
furnishing this Office a copy of the signed Agreement;
g. this CBA shall, in so far as representation is concerned, be for a term of five (5) years; all
other provisions shall be renegotiated not later than three (3) years after its effective date
which shall be December 5, 2001 (or on the first day six months after the expiration on June
4, 2001 of the superceded CBA).
UFE-DFA-KMU moved to reconsider the aforequoted ruling, but such was subsequently denied on 6
May 2002.
For the second time, UFE-DFA-KMU went to the Court of Appeals via another Petition
for Certiorari seeking to annul the Orders of 02 April 2002 and 06 May 2002 of the Secretary of the
DOLE, having been issued in grave abuse of discretion amounting to lack or excess of jurisdiction.
On 27 February 2003, the appellate court promulgated its Decision on the twin petitions
for certiorari, ruling entirely in favor of UFE-DFA-KMU, the dispositive part thereof stating –
WHEREFORE, in view of the foregoing, there being grave abuse on the part of the public
respondent in issuing all the assailed Orders, both petitions are hereby GRANTED. The
assailed Orders dated February 11, 2001, and March 8, 2001 (CA-G.R. SP No. 69805), as
well as the Orders dated April 2, 2002 and May 6, 2002 (CA-G.R. SP No. 71540) of the
Secretary of Labor and Employment in the case entitled: "IN RE: LABOR DISPUTE AT
NESTLE PHILIPPINES INC. (CABUYAO FACTORY)" under OS-AJ-0023-01 (NCMB-RBIV-
CAV-PM-08-035-01, NCMB-RBIV-LAG-NS-10-037-01, NCMB-RBIV-LAG-NS-11-10-039—
01) are hereby ANNULLED and SET ASIDE. Private respondent is hereby directed to
resume the CBA negotiations with the petitioner.20
Both parties appealed the aforequoted ruling. Nestlé essentially assailed that part of the decision
finding the DOLE Secretary to have gravely abused her discretion amounting to lack or excess of
jurisdiction when she ruled that the Retirement Plan was not a valid issue to be tackled during the
CBA negotiations; UFE-DFA-KMU, in contrast, questioned the appellate court’s decision finding
Nestlé free and clear of any unfair labor practice.
Since the motions for reconsideration of both parties were denied by the Court of Appeals in a joint
Resolution dated 27 June 2003, UFE-DFA-KMU and Nestlé separately filed the instant Petitions for
Review on Certiorari under Rule 45 of the Rules of Court, as amended.
G.R. No. 158930-31 was filed by UFE-DFA-KMU against Nestlé seeking to reverse the Court of
Appeals Decision insofar as the appellate court’s failure to find Nestlé guilty of unfair labor practice
was concerned; while G.R. No. 158944-45 was instituted by Nestlé against UFE-DFA-KMU likewise
looking to annul and set aside the part of the Court of Appeals Decision declaring that: 1) the
Retirement Plan was a valid collective bargaining issue; and 2) the scope of the power of the
Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction over the labor
dispute between UFE-DFA-KMU and Nestlé was limited to the resolution of questions and matters
pertaining merely to the ground rules of the collective bargaining negotiations to be conducted
between the parties.
On 29 March 2004, this Court resolved21 to consolidate the two petitions inasmuch as they (1)
involved the same set of parties; (2) arose from the same set of circumstances, i.e., from several
Orders issued by then DOLE Secretary, Hon. Patricia A. Sto. Tomas, respecting her assumption of
jurisdiction over the labor dispute between Nestlé and UFE-DFA-KMU, Alabang and Cabuyao
Divisions;22 and (3) similarly assailed the same Decision and Resolution of the Court of Appeals.
After giving due course to the instant consolidated petitions, this Court promulgated on 22 August
2006 its Decision, now subject of UFE-DFA-KMU’s Motion for Partial Reconsideration and Nestlé’s
Motion for Clarification.
In its Motion for Partial Reconsideration, UFE-DFA-KMU would have this Court address and discuss
anew points or arguments that have basically been passed upon in this Court’s 22 August 2006
Decision. Firstly, it questions this Court’s finding that Nestlé was not guilty of unfair labor practice,
considering that the transaction speaks for itself, i.e, res ipsa loquitor. And made an issue again is
the question of whether or not the DOLE Secretary can take cognizance of matters beyond the
amended Notice of Strike.
As to Nestlé’s prayer for clarification, the corporation seeks elucidation respecting the dispositive
part of this Court’s Decision directing herein parties to resume negotiations on the retirement
compensation package of the concerned employees. It posits that "[i]n directing the parties to
negotiate the Retirement Plan, the Honorable Court x x x might have overlooked the fact that here,
the Secretary of Labor had already assumed jurisdiction over the entire 2001-2004 CBA controversy
x x x."
As to the charge of unfair labor practice:
The motion does not put forward new arguments to substantiate the prayer for reconsideration of
this Court’s Decision except for the sole contention that the transaction speaks for itself, i.e., res ipsa
loquitor. Nonetheless, even a perusal of the arguments of UFE-DFA-KMU in its petition and
memorandum in consideration of the point heretofore raised will not convince us to change our
disposition of the question of unfair labor practice. UFE-DFA-KMU argues therein that Nestlé’s
"refusal to bargain on a very important CBA economic provision constitutes unfair labor practice."23 It
explains that Nestlé set as a precondition for the holding of collective bargaining negotiations the
non-inclusion of the issue of Retirement Plan. In its words, "respondent Nestlé Phils., Inc. insisted
that the Union should first agree that the retirement plan is not a bargaining issue before respondent
Nestlé would agree to discuss other issues in the CBA."24 It then concluded that "the Court of
Appeals committed a legal error in not ruling that respondent company is guilty of unfair labor
practice. It also committed a legal error in failing to award damages to the petitioner for the ULP
committed by the respondent."25
We are unconvinced still.
The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code, as
amended, which state –
ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means
the performance of a mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with respect to wages, hours, of work
and all other terms and conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and executing a contract
incorporating such agreements if requested by either party but such duty does not compel
any party to agree to a proposal or to make any concession.
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. –
When there is a collective bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or modify the agreement at
least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the
status quo and to continue in full force and effect the terms of conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the parties.
Obviously, the purpose of collective bargaining is the reaching of an agreement resulting in a

contract binding on the parties; but the failure to reach an agreement after negotiations have
continued for a reasonable period does not establish a lack of good faith. The statutes invite and
contemplate a collective bargaining contract, but they do not compel one. The duty to bargain does
not include the obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in
good faith typically turns on the facts of the individual case. As we have said, there is no per se test
of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts. To
some degree, the question of good faith may be a question of credibility. The effect of an employer’s
or a union’s individual actions is not the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole, and the inferences fairly drawn therefrom collectively
may offer a basis for the finding of the NLRC.26
For a charge of unfair labor practice to prosper, it must be shown that Nestlé was motivated by ill
will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation, wounded feelings, or grave anxiety
resulted x x x"27 in disclaiming unilateral grants as proper subjects in their collective bargaining
negotiations. While the law makes it an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately
accept or agree to the proposals of the other. All it contemplates is that both parties should approach
the negotiation with an open mind and make reasonable effort to reach a common ground of
agreement.
Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001 written
by Nestlé where the latter laid down its position that "unilateral grants, one-time company grants,
company-initiated policies and programs, which include, but are not limited to the Retirement Plan,
Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects
of CBA negotiations and therefore shall be excluded therefrom." But as we have stated in this
Court’s Decision, said letter is not tantamount to refusal to bargain. In thinking to exclude the issue
of Retirement Plan from the CBA negotiations, Nestlé, cannot be faulted for considering the same
benefit as unilaterally granted, considering that eight out of nine bargaining units have allegedly
agreed to treat the Retirement Plan as a unilaterally granted benefit. This is not a case where the
employer exhibited an indifferent attitude towards collective bargaining, because the negotiations
were not the unilateral activity of the bargaining representative. Nestlé’s desire to settle the dispute
and proceed with the negotiation being evident in its cry for compulsory arbitration is proof enough of
its exertion of reasonable effort at good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation
simply wanted to exclude the Retirement Plan from the issues to be taken up during CBA
negotiations, on the postulation that such was in the nature of a unilaterally granted benefit. An
employer’s steadfast insistence to exclude a particular substantive provision is no different from a
bargaining representative’s perseverance to include one that they deem of absolute necessity.
Indeed, an adamant insistence on a bargaining position to the point where the negotiations reach an
impasse does not establish bad faith.[fn24 p.10] It is but natural that at negotiations, management
and labor adopt positions or make demands and offer proposals and counter-proposals. On account
of the importance of the economic issue proposed by UFE-DFA-KMU, Nestle could have refused to
bargain with the former – but it did not. And the management’s firm stand against the issue of the
Retirement Plan did not mean that it was bargaining in bad faith. It had a right to insist on its position
to the point of stalemate.
The foregoing things considered, this Court replicates below its clear disposition of the issue:
The concept of "unfair labor practice" is defined by the Labor Code as:
ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND PROCEDURE FOR

PROSECUTION THEREOF. – Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and
hinder the promotion of healthy and stable labor-management relations.
x x x x.
The same code likewise provides the acts constituting unfair labor practices committed by
employers, to wit:
ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. – It shall be unlawful for an

employer to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(b) To require as a condition of employment that a person or an employee shall not

join a labor organization or shall withdraw from one to which he belongs;
(c) To contract out services or functions being performed by union members when
such will interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or

administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work, and other terms and conditions
of employment in order to encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of another union at
the time of the signing of the collective bargaining agreement.
recognized collective bargaining agent may be assessed a reasonable fee equivalent
to the dues and other fees paid by members of the recognized collective bargaining
agent, if such non-union members accept the benefits under the collective
agreement. Provided, That the individual authorization required under Article 242,
paragraph (o) of this Code shall not apply to the nonmembers of the recognized
collective bargaining agent; [The article referred to is 241, not 242. – CAA]
(f) To dismiss, discharge, or otherwise prejudice or discriminate against an employee

for having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part
of the settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations associations or partnerships who have actually participated,
authorized or ratified unfair labor practices shall be held criminally liable. (Emphasis
supplied.)
Herein, Nestlé is accused of violating its duty to bargain collectively when it purportedly
imposed a pre-condition to its agreement to discuss and engage in collective bargaining
negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the cases at bar shows that, of the two
notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on the second that the
ground of unfair labor practice was alleged. Worse, the 7 November 2001 Notice of Strike
merely contained a general allegation that Nestlé committed unfair labor practice by
bargaining in bad faith for supposedly "setting pre-condition in the ground rules (Retirement
issue)." (Notice of Strike of 7 November 2001; Annex "C" of UFE-DFA-KMU Position Paper;
DOLE original records, p. 146.) In contrast, Nestlé, in its Position Paper, did not confine itself
to the issue of the non-inclusion of the Retirement Plan but extensively discussed its stance
on other economic matters pertaining to the CBA. It is UFE-DFA-KMU, therefore, who had
the burden of proof to present substantial evidence to support the allegation of unfair labor
practice.
A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum (in
G.R. Nos. 158930-31) will readily disclose the need for the presentation of evidence other
than its bare contention of unfair labor practice in order to make certain the propriety or
impropriety of the ULP charge hurled against Nestlé. Under Rule XIII, Sec. 4, Book V of the
Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the notice of strike shall as far as

practicable, state the acts complained of and the efforts to resolve the dispute
amicably." (Emphasis supplied.)
In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the second
Notice of Strike nor the records of these cases substantiate a finding of unfair labor practice.
It is not enough that the union believed that the employer committed acts of unfair labor
practice when the circumstances clearly negate even a prima facie showing to warrant such
a belief. (Tiu v. National Labor Relations Commission, G.R. No. 123276, 18 August 1997,
277 SCRA 681, 688.)
Employers are accorded rights and privileges to assure their self-determination and
independence and reasonable return of capital. (Capitol Medical Center, Inc. v. Meris, G.R.
No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges comprises
the so-called management prerogatives. (Capitol Medical Center, Inc. v. Meris, G.R. No.
155098, 16 September 2005, 470 SCRA 125, 136.) In this connection, the rule is that good
faith is always presumed. As long as the company’s exercise of the same is in good faith to
advance its interest and not for purpose of defeating or circumventing the rights of
employees under the law or a valid agreement, such exercise will be upheld. (Capitol
Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.)
There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking

Corporation Employees Union v. National Labor Relations Commission, G.R. No. 125038, 6
November 1997, 281 SCRA 509, 518.) Good faith or bad faith is an inference to be drawn
from the facts. (Hongkong Shanghai Banking Corporation Employees Union v. National
Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281 SCRA 509, 518.)
Herein, no proof was presented to exemplify bad faith on the part of Nestlé apart from mere
allegation. Construing arguendo that the content of the aforequoted letter of 29 May 2001
laid down a pre-condition to its agreement to bargain with UFE-DFA-KMU, Nestlé’s inclusion
in its Position Paper of its proposals affecting other matters covered by the CBA negates the
claim of refusal to bargain or bargaining in bad faith. Accordingly, since UFE-DFA-KMU
failed to proffer substantial evidence that would overcome the legal presumption of good
faith on the part of Nestlé, the award of moral and exemplary damages is unavailing.
As to the jurisdiction of the DOLE Secretary under the amended Notice of Strike:
This Court is not convinced by the argument raised by UFE-DFA-KMU that the DOLE Secretary
should not have gone beyond the disagreement on the ground rules of the CBA negotiations. The
union doggedly asserts that the entire labor dispute between herein parties concerns only the
ground rules.
Lest it be forgotten, it was UFE-DFA-KMU which first alleged a bargaining deadlock as the basis for
the filing of its Notice of Strike; and at the time of the filing of the first Notice of Strike, several
conciliation conferences had already been undertaken where both parties had already exchanged
with each other their respective CBA proposals. In fact, during the conciliation meetings before the
NCMB, but prior to the filing of the notices of strike, the parties had already delved into matters
affecting the meat of the collective bargaining agreement.
The Secretary of the DOLE simply relied on the Notices of Strike that were filed by UFE-DFA-KMU
as stated in her Order of 08 March 2002, to wit:
x x x The records disclose that the Union filed two Notices of Strike. The First is dated
October 31, 2001 whose grounds are cited verbatim hereunder:
"A. Bargaining Deadlock
1. Economic issues (specify)
1. Retirement
2. Panel Composition
3. Costs and Attendance
4. CBA"
The second Notice of Strike is dated November 7, 2001 and the cited ground is like quoted
verbatim below:
"B. Unfair Labor Practices (specify)
Bargaining in bad faith –
Setting pre-condition in the ground rules (Retirement issue)"
Nowhere in the second Notice of Strike is it indicated that this Notice is an amendment to and took
the place of the first Notice of Strike. In fact, our Assumption of Jurisdiction Order dated November
29, 2001 specifically cited the two (2) Notices of Strike without any objection on the part of the Union
x x x.29
Had the parties not been at the stage where the substantive provisions of the proposed CBA had
been put in issue, the union would not have based thereon its initial notice to strike. This Court
maintains its original position in the Decision that, based on the Notices of Strike filed by UFE-DFA-
KMU, the Secretary of the DOLE rightly decided on matters of substance. That the union later on
changed its mind is of no moment because to give premium to such would make the legally
mandated discretionary power of the Dole Secretary subservient to the whims of the parties.
As to the point of clarification on the resumption of negotiations respecting the Retirement

Plan:
As for the supposed confusion or uncertainty of the dispositive part of this Court’s Decision, Nestle
moves for clarification of the statement – "The parties are directed to resume negotiations respecting
the Retirement Plan and to take action consistent with the discussion hereinabove set forth. No
costs." The entire fallo of this Court’s Decision reads:
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seeking that
Nestlé be declared to have committed unfair labor practice in allegedly setting a precondition
to bargaining is DENIED. The Petition in G.R. No. 158944-45, however, is PARTLY
GRANTED in that we REVERSE the ruling of the Court of Appeals in CA G.R. SP No. 69805
in so far as it ruled that the Secretary of the DOLE gravely abused her discretion in failing to
confine her assumption of jurisdiction power over the ground rules of the CBA negotiations;
but the ruling of the Court of Appeals on the inclusion of the Retirement Plan as a valid issue
in the collective bargaining negotiations between UFE-DFA-KMU and Nestlé is AFFIRMED.
The parties are directed to resume negotiations respecting the Retirement Plan and to take
action consistent with the discussions hereinabove set forth. No costs.
Nestle interprets the foregoing as an order for the parties to resume negotiations
by themselves respecting the issue of retirement benefits due the employees of the Cabuyao Plant.
Otherwise stated, Nestle posits that the dispositive part of the Decision directs the parties to submit
to a voluntary mode of dispute settlement.
A read-through of this Court’s Decision reveals that the ambiguity is more ostensible than real. This
Court’s Decision of 22 August 2006 designated marked boundaries as to the implications of the
assailed Orders of the Secretary of the DOLE. We said therein that 1) the Retirement Plan is still a
valid issue for herein parties’ collective bargaining negotiations; 2) the Court of Appeals committed
reversible error in limiting to the issue of the ground rules the scope of the power of the Secretary of
Labor to assume jurisdiction over the subject labor dispute; and 3) Nestlé is not guilty of unfair labor
practice. Nowhere in our Decision did we require parties to submit to negotiate by themselves the
tenor of the retirement benefits of the concerned employees of Nestlé, precisely because the
Secretary of the DOLE had already assumed jurisdiction over the labor dispute subject of herein
petitions. Again, we spell out what encompass the Secretary’s assumption of jurisdiction power. The
Secretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the authority
to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, and decide the same accordingly. And, as a matter of
necessity, it includes questions incidental to the labor dispute; that is, issues that are necessarily
involved in the dispute itself, and not just to that ascribed in the Notice of Strike or otherwise
submitted to him for resolution. In the case at bar, the issue of retirement benefits was specifically
what was presented before the Secretary of the DOLE; hence, We reject Nestlé’s interpretation. Our
decision is crystal and cannot be interpreted any other way. The Secretary having already assumed
jurisdiction over the labor dispute subject of these consolidated petitions, the issue concerning the
retirement benefits of the concerned employees must be remanded back to him for proper
disposition.
All told, in consideration of the points afore-discussed and the fact that no substantial arguments
have been raised by either party, this Court remains unconvinced that it should modify or reverse in
any way its disposition of herein cases in its earlier Decision. The labor dispute between the Nestle
and UFE-DFA-KMU has dragged on long enough. As no other issues are availing, let this Resolution
write an ending to the protracted labor dispute between Nestlé and UFE-DFA-KMU (Cabuyao
Division).
WHEREFORE, premises considered, the basic issues of the case having been passed upon and
there being no new arguments availing, the Motion for Partial Reconsideration is hereby DENIED
WITH FINALITY for lack of merit. Let these cases be remanded to the Secretary of the Department
of Labor and Employment for proper disposition, consistent with the discussions in this Court’s
Decision of 22 August 2006 and as hereinabove set forth. No costs.
SO ORDERED.
Ynares-Santiago, Chairperson, Austria-Martinez, Azcuna *, Tinga * , JJ., concur.
Footnotes
* Justices Adolfo S. Azcuna and Dante O. Tinga were designated to sit as additional
members replacing retired Chief Justice Artemio V. Panganiban and Justice Romeo J.
Callejo, Sr. per Raffle dated 3 December 2007.
1
Penned by Associate Justice Minita V. Chico-Nazario with retired Chief Justice Artemio V.
Panganiban, Associate Justices Consuelo Ynares-Santiago, Alicia Austria-Martinez and
Romeo J. Callejo, Jr. concurring. G.R. Nos. 158930-31, 22 August 2006, 499 SCRA 521,
551-552.
2
Rollo of G.R. Nos. 158944-45, pp. 1371-1391.
3
Rollo of G.R. Nos. 158930-31, pp. 1944-1956.
4
Alabang and Cabuyao Divisions.
5
Annex "B" of the Petition; rollo of G.R. Nos. 158930-31, Vol. I, p. 281.
6
Id.
7
The Cabuyao Division of UFE-DFA-KMU became the sole bargaining unit involved in the
subject CBA negotiations because of the closure of the Nestlé Alabang Plant.
8
Annex "F-1" of the Petition; rollo of G.R. Nos. 158930-31, p. 460.
9
In a letter addressed to Atty. Jose Velasco, Director, National Conciliation and Mediation
Board, Regional Office No. IV, Imus, Cavite; Annex "F" of the Petition; rollo of G.R. Nos.
158944-45, p. 104.
10
Id.
11
Records, Vol. IV, p. 1.
12
Records, Vol. II, p. 146.
Of the 789 regular rank-and-file employees of Nestlé (Cabuyao Factory, Laguna), only 724
13
employees voted; the YES ballot garnered 708 votes, while only 13 employees decided
against the plan to stage a strike; Records, Vol. II, p. 150.
14
Dated 23 November 2001; rollo of G.R. Nos. 158944-45, pp. 112-129.
15
Id. at 130-135.
Dated 29 November 2001; Annex "L" of the Petition; rollo of G.R. Nos. 158944-45, pp. 136-
16
182.
17
Id.
18
CA rollo (CA-G.R. SP No. 69805).
19
Annex "BB" of the Petition; rollo of G.R. Nos. 158944-45, pp. 508-520.
20
Id. at 43.
21
SC Resolution dated 29 March 2004.
22
Concerning employees at Nestlé’s Alabang and Cabuyao factories.
23
Petitioner’s Memorandum, pp 10-11; rollo of G.R. Nos. 158930-31, pp. 1672-1673.
24
Id.
25
Id. at 1671-1672.
26
48 Am. Jur. 2d, Labor and Labor Relations, Sec. 1028, 828.
San Miguel Corporation v. Del Rosario, G.R. Nos. 168194 & 168603, 13 December 2005,
27
477 SCRA 604, 619.
"x x x [U]nilateral grants, one-time company grants, company-initiated policies and

28
programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty
Pay and Calling Pay Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom."
29
Rollo of G.R. Nos. 158930-31, Vol. I, pp. 333-334.
G.R. No. 188020, June 27, 2016 - REN TRANSPORT CORP. AND/OR REYNALDO
PAZCOGUIN III, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION (2ND
DIVISION), SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF
DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO) REPRESENTED BY ITS PRESIDENT
NESTOR FULMINAR, Respondents.; G.R. No. 188252 - SAMAHANG MANGGAGAWA SA
REN TRANSPORT-ASSOCIATION OF DEMOCRATIC LABOR ASSOCIATIONS (SMART-
ADLO) REPRESENTED BY NESTOR FULMINAR, Petitioner, v. REN TRANSPORT CORP.
AND/OR REYNALDO PAZCOGUIN III, Respondents.:
G.R. No. 188020, June 27, 2016 - REN TRANSPORT CORP. AND/OR REYNALDO
PAZCOGUIN III, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION (2ND
DIVISION), SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF
DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO) REPRESENTED BY ITS PRESIDENT
NESTOR FULMINAR, Respondents.; G.R. No. 188252 - SAMAHANG MANGGAGAWA SA
REN TRANSPORT-ASSOCIATION OF DEMOCRATIC LABOR ASSOCIATIONS (SMART-
ADLO) REPRESENTED BY NESTOR FULMINAR, Petitioner, v. REN TRANSPORT CORP.
AND/OR REYNALDO PAZCOGUIN III, Respondents.
FIRST DIVISION
G.R. No. 188020, June 27, 2016
REN TRANSPORT CORP. AND/OR REYNALDO PAZCOGUIN

III, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION),
SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF
DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO) REPRESENTED BY ITS
PRESIDENT NESTOR FULMINAR, Respondents.
G.R. No. 188252
SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF

DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO) REPRESENTED BY
NESTOR FULMINAR, Petitioner, v. REN TRANSPORT CORP. AND/OR REYNALDO
PAZCOGUIN III, Respondents.
DECISION
SERENO, C.J.:
Before this Court are consolidated Rule 45 petitions challenging the Decision 1 and the
Resolution2 issued by the Court of Appeals (CA) in CA-G.R. SP No. 100722.
THE FACTS
Samahan ng Manggagawa sa Ren Transport (SMART) is a registered union, which had a

five-year collective bargaining agreement (CBA) with Ren Transport Corp. (Ren
Transport) set to expire on 31 December 2004.3 The 60-day freedom period of the CBA
passed without a challenge to SMART'S majority status as bargaining agent. 4 SMART
thereafter conveyed its willingness to bargain with Ren Transport, to which it sent
bargaining proposals. Ren Transport, however, failed to reply to the demand. 5 chanrobleslaw
Subsequently, two members of SMART wrote to the Department of Labor and

Employment - National Capital Region (DOLE-NCR). The office was informed that a
majority of the members of SMART had decided to disaffiliate from their mother
federation to form another union, Ren Transport Employees Association
(RTEA).6 SMART contested the alleged disaffiliation through a letter dated 4 April
2005.7chanrobleslaw
During the pendency of the disaffiliation dispute at the DOLE-NCR, Ren Transport
stopped the remittance to SMART of the union dues that had been checked off from the
salaries of union workers as provided under the CBA.8 Further, on 19 April 2005, Ren
Transport voluntarily recognized RTEA as the sole and exclusive bargaining agent of the
rank-and-file employees of their company. 9 chanrobleslaw
On 6 July 2005, SMART filed with the labor arbiter a complaint for unfair labor practice
against Ren Transport.10
THE LABOR ARBITER'S RULING
The labor arbiter rendered a decision11 finding Ren Transport guilty of acts of unfair
labor practice. The former explained that since the disaffiliation issue remained
pending, SMART continued to be the certified collective bargaining agent; hence, Ren
Transport's refusal to send a counter-proposal to SMART was not justified. The labor
arbiter also held that the company's failure to remit the union dues to SMART and the
voluntary recognition of RTEA were clear indications of interference with the employees'
exercise of the right to self-organize.
Both parties elevated the case to the National Labor Relations Commission (NLRC).
SMART contested only the failure of the labor arbiter to award damages.
Ren Transport challenged the entire Decision, assigning four errors in its Memorandum
of Appeal, namely: (1) SMART was no longer the exclusive bargaining agent; (2) Ren
Transport did not fail to bargain collectively with SMART; (3) Ren Transport was not
obliged to remit dues to SMART; and (4) SMART lacked the personality to sue Ren
Transport.12 All the assigned errors were based on the assertion that SMART had lost its
majority status.
The appeals were consolidated.
THE NLRC RULING
The NLRC issued a decision13 affirming the labor arbiter's finding of unfair labor practice
on the part of Ren Transport. Union dues were ordered remitted to SMART.
The NLRC also awarded moral damages to SMART, saying that Ren transport's refusal
to bargain was inspired by malice or bad faith. The precipitate recognition of RTEA
evidenced such bad faith, considering that it was done despite the pendency of the
disaffiliation dispute at the DOLE-NCR.
Ren Transport filed a motion for reconsideration14 alleging, among others, that the
NLRC failed to resolve all the arguments the former had raised in its memorandum of
appeal.
The NLRC denied the motion for reconsideration,15 prompting Ren Transport to file a
Rule 65 petition with the CA.16chanrobleslaw
THE CA RULING
On 30 January 2009, the CA rendered a decision17 partially granting the petition. It

deleted the award of moral damages to SMART, but affirmed the NLRC decision on all
other matters. The CA ruled that SMART, as a corporation, was not entitled to moral
damages.18 chanrobleslaw
On the contention that the NLRC decided the case without considering all the
arguments of Ren Transport, the CA found that the latter had passed upon the principal
issue of the existence of unfair labor practice.
Hence, both parties appealed to this Court.
THE ISSUES
Based on the foregoing facts and arguments raised in the petitions, the threshold issues
to be resolved are the following: (1) whether Ren Transport committed acts of unfair
labor practice; (2) whether the decision rendered by the NLRC is valid on account of its
failure to pass upon all the errors assigned by Ren Transport; and (3) whether SMART
is entitled to moral damages.
OUR RULING
We deny the petitions for lack of merit.
Ren Transport committed acts of unfair labor practice.
Ren Transport violated its duty to bargain collectively with SMART.
Ren Transport concedes that it refused to bargain collectively with SMART. It claims,
though, that the latter ceased to be the exclusive bargaining agent of the rank-and-file
employees because of the disaffiliation of the majority of its members. 19 chanrobleslaw
The argument deserves no consideration.
Violation of the duty to bargain collectively is an unfair labor practice under Article
258(g) of the Labor Code. An instance of this practice is the refusal to bargain
collectively as held in General Milling Corp. v. CA.20 In that case, the employer anchored
its refusal to bargain with and recognize the union on several letters received by the
former regarding the withdrawal of the workers' membership from the union. We
rejected the defense, saying that the employer had devised a flimsy excuse by
attacking the existence of the union and the status of the union's membership to
prevent any negotiation.21 chanrobleslaw
It bears stressing that Ren Transport had a duty to bargain collectively with SMART.
Under Article 263 in relation to Article 267 of the Labor Code, it is during the freedom
period — or the last 60 days before the expiration of the CBA — when another union
may challenge the majority status of the bargaining agent through the filing of a
petition for a certification election. If there is no such petition filed during the freedom
period, then the employer "shall continue to recognize the majority status of the
incumbent bargaining agent where no petition for certification election is filed." 22
chanrobleslaw
In the present case, the facts are not up for debate. No petition for certification election
challenging the majority status of SMART was filed during the freedom period, which
was from November 1 to December 31, 2004 — the 60-day period prior to the
expiration of the five-year CBA. SMART therefore remained the exclusive bargaining
agent of the rank-and-file employees.
Given that SMART continued to be the workers' exclusive bargaining agent, Ren
Transport had the corresponding duty to bargain collectively with the former. Ren
Transport's refusal to do so constitutes an unfair labor practice.
Consequently, Ren Transport cannot avail itself of the defense that SMART no longer
represents the majority of the workers. The fact that no petition for certification
election was filed within the freedom period prevented Ren Transport from challenging
SMART'S existence and membership.
Moreover, it must be stressed that, according to the labor arbiter, the purported
disaffiliation from SMART was nothing but a convenient, self-serving excuse. 23 This
factual finding, having been affirmed by both the CA and the NLRC, is now conclusive
upon the Court.24 We do not see any patent error that would take the instant case out
of the general rule.
Ren Transport interfered with the exercise of the employees' right to self-
organize.
Interference with the employees' right to self-organization is considered an unfair labor

practice under Article 258 (a) of the Labor Code. In this case, the labor arbiter found
that the failure to remit the union dues to SMART and the voluntary recognition of RTEA
were clear indications of interference with the employees' right to self-
organization.25 It must be stressed that this finding was affirmed by the NLRC and the
cralawred
CA; as such, it is binding on the Court, especially when we consider that it is not tainted
with any blatant error. As aptly pointed out by the labor arbiter, these acts were ill-
timed in view of the existence of a labor controversy over membership in the union. 26 chanrobleslaw
Ren Transport also uses the supposed disaffiliation from SMART to justify the failure to
remit union dues to the latter and the voluntary recognition of RTEA. However, for
reasons already discussed, this claim is considered a lame excuse that cannot validate
those acts.
II.
The NLRC decision is valid.
Ren Transport next argues that the decision rendered by the NLRC is defective
considering that it has failed to resolve all the issues in its Memorandum of Appeal. 27 chanrobleslaw
We do not agree.
Section 14, Article VIII of the 1987 Constitution, states that "[n]o decision shall be
rendered by any court without expressing therein clearly and distinctly the facts and the
law on which it is based." It has been held that the constitutional provision does not
require a "point-by-point consideration and resolution of the issues raised by the
parties."28 chanrobleslaw
In the present case, the decision shows that the NLRC resolved the focal issue raised by
Ren Transport: whether or not SMART remained the exclusive bargaining agent, such
that Ren Transport could be found guilty of acts of unfair labor practice. We quote the
NLRC discussion: ChanRoblesVirtualawlibrary
At the outset, let it be stated that insofar as the principal issue of whether unfair labor
practice was committed by respondents, there is no occasion to find, or even entertain,
doubts that the findings and conclusion of the Labor Arbiter that unfair labor practice
(ULP) was committed against the complainants, are infused with serious errors. We
quote:ChanRoblesVirtualawlibrary
[I]t is our considered view that the respondents committed acts of unfair labor practice
even if the CBA between the complainant union and respondent company already
expired and majority of the workers of the existing bargaining agent disaffiliated
therefrom, formed its own union and have it registered as an independent one, still the
respondent Company has the duty to bargain collectively with the existing bargaining
agent. It bears stressing that the disaffiliation issue of the members of the complainant
union is still pending before the DOLE and has not yet attained its finality; that there is
no new bargaining agent certified yet by the DOLE, there is no legal basis yet for the
respondent company to disregard the personality of the complainant union and refused
or ignored the agent for renewal of its CBA. It is still the certified collective bargaining
agent of the workers, because there was no new [u]nion yet being certified by the
DOLE as the new bargaining agent of the workers.
The above discourse shows the factual and legal bases for the NLRC's resolution of the
issue of whether Ren Transport committed unfair labor practice and thereby satisfies
the constitutional provision on the contents of a decision. The NLRC succeeded in
disposing of all the arguments raised by Ren Transport without going through every
argument, as all the assigned errors hinged on the majority status of SMART. 29 All of
these errors were addressed and settled by the NLRC by finding that SMART was still
the exclusive bargaining agent of the employees of Ren Transport.
As aptly stated by the CA, a court or any other tribunal is not required to pass upon all
the errors assigned by Ren Transport; the resolution of the main question renders the
other issues academic or inconsequential.30 chanrobleslaw
At this juncture, it is well to note that addressing every one of the errors assigned
would not be in keeping with the policy of judicial economy. Judicial economy refers to
"efficiency in the operation of the courts and the judicial system; especially the efficient
management of litigation so as to minimize duplication of effort and to avoid wasting
the judiciary's time and resources."31 In Salud v. Court of Appeals,32 the Court remarked
that judicial economy is a "strong [norm] in a society in need of swift justice." 33 Now,
more than ever, the value of brevity in the writing of a decision assumes greater
significance, as we belong to an age in which dockets of the courts are congested and
their resources limited.
III.
SMART is not entitled to an award of moral damages.
We now address the petition of SMART, which faults the CA for deleting the grant of
moral damages.34 chanrobleslaw
We hold that the CA correctly dropped the NLRC's award of moral damages to SMART.
Indeed, a corporation is not, as a general rule, entitled to moral damages. Being a
mere artificial being, it is incapable of experiencing physical suffering or sentiments like
wounded feelings, serious anxiety, mental anguish or moral shock. 35 chanrobleslaw
Although this Court has allowed the grant of moral damages to corporations in certain
situations,36 it must be remembered that the grant is not automatic. The claimant must
still prove the factual basis of the damage and the causal relation to the defendant's
acts.37 In this case, while there is a showing of bad faith on the part of the employer in
the commission of acts of unfair labor practice, there is no evidence establishing the
factual basis of the damage on the part of SMART.
WHEREFORE, premises considered, the petitions are DENIED. The Decision dated 30

January 2009 and the Resolution dated 20 May 2009 issued by the Court of Appeals in
CA-G.R. SP No. 100722 are AFFIRMED.
SO ORDERED. chanRoblesvirtualLawlibrary
Leonardo-De Castro, Bersamin, Perlas-Bernabe, and Caguioa, JJ., concur.
Endnotes:
1
Dated 30 January 2009. Rollo, 188020, pp 60-70, penned by Associate Justice Ricardo
R. Rosario and concurred by Associate Justices Noel G. Tijam and Vicente S.E. Veloso.
2
Dated 20 May 2009. Id. at pp. 57-59.
3
Supra, note 1. at 62.
4
Id.
5
Rollo, (G.R. No. 188252), p. 183.
6
Id.
7
Id. at 63.
8
Id.
9
Id.
10
Supra note 1 at 15.
11
Decision dated 13 February 2006. Supra note 5 at 182-190.
12
Supra, note 5 at 206-217.
13
Decision 28 May 2007. Id. at 243-249.
14
Id. at 250-273.
15
Id. at 276-278.
16
Id. at 279-314.
17
Id. at 22-31.
18
Id. at 30.
19
20
467 Phil. 125 (2004).
21
Id. at 134.
22
Article 267, Labor Code (As amended by Section 23, Republic Act No. 6715, March
21, 1989).
23
Supra note 5, at 189-190.
24
Meralco Industrial Engineering Services Corp. v. National Labor Relations Commission,
572 PHIL 94-118 (2008).
25
cralawred Id. at 189.
26
Id.
27
Supra, note 1 at 31.
28
Re: Ongjoco, 680 PHIL 467-474 (2012).
29
Ren Transport's remaining arguments in its Memorandum of Appeal filed with the
NLRC are summed up as follows: (1) Ren Transport did not fail to bargain collectively
with SMART; (3) Ren Transport was not obliged to remit dues to SMART; and (4)
SMART lacked the personality to sue Ren Transport. Supra note 5 at 216-217.
30
31
Black's Law Dictionary, Eighth edition, p. 863.
32
G.R. No. 100156, 27 June 1994, 233 SCRA 384.
33
Id. at 389.
34
Supra note 5 at 15.
35
Crystal v. Bank of the Philippine Islands, 593 Phil. 344, 354 (2008). Cited
in University of the Philippines v. Dizon, 693 Phil. 226, 250 (2012).
36
Corporations may recover moral damages under Articles 19, 20, and 21 of the Civil
Code (ABS-CBN Broadcasting Corp. v. Court of Appeals, 61 Phil. 499, 527 (1999), as
well as under Article 2219 (7) of the Civil Code (Filipinos Broadcasting Network v. Ago
Medical and Educational Center) 489 Phil. 380, 400 (2005).
37
First Lepanto-Taisho Insurance Corp, v. Chevron Phil., Inc., 679 Phil. 313, 329 (2012).

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 169254 August 23, 2012
DE LA SALLE UNIVERSITY, Petitioner,
vs.
DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA-NAFTEU), Respondent.
LEONARDO-DE CASTRO,*
PERLAS-BERNABE, **
DECISION
LEONARDO-DE CASTRO, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing
the March 4, 2005 Decision and August 5, 2005 Resolution of the Court of Appeals in CA-G.R. SP
1 2
No. 82472, entitled De La Salle University versus the Honorable Secretary of Labor and De La Salle
University Employees Association (DLSUEA-NAFTEU), which affirmed the November 17, 2003
Decision and January 20, 2004 Order of the Secretary of Labor in OS-AJ-0033-2003 (NCMB-NCR-
3 4
NS-08-246-03). These decisions and resolutions consistently found petitioner guilty of unfair labor
practice for failure to bargain collectively with respondent.
This petition involves one of the three notices of strike filed by respondent De La Salle University
Employees Association (DLSUEANAFTEU) against petitioner De La Salle University due to its
refusal to bargain collectively with it in light of the intra-union dispute between respondent’s two
opposing factions. The following narration of facts will first discuss the circumstances surrounding
the said intra-union conflict between the rival factions of respondent union and, thereafter, recite the
cases relating to the aforementioned conflict, from the complaint for unfair labor practice to the
subsequent notices of strike, and to the assumption of jurisdiction by the Secretary of Labor.
Petition for Election of Union

Officers
On May 30, 2000, some of respondent’s members headed by Belen Aliazas (the Aliazas faction)
filed a petition for the election of union officers in the Bureau of Labor Relations (BLR). They alleged
5
therein that there has been no election for respondent’s officers since 1992 in supposed violation of
the respondent union’s constitution and by-laws which provided for an election of officers every three
years. It would appear that respondent’s members repeatedly voted to approve the hold-over of the
6
previously elected officers led by Baylon R. Bañez (Bañez faction) and to defer the elections to
expedite the negotiations of the economic terms covering the last two years of the 1995-2000
collective bargaining agreement (CBA) pursuant to Article 253-A of the Labor Code.
7 8
On March 19, 2001, BLR Regional Director Alex E. Maraan issued a Decision ordering the conduct
of an election of union officers to be presided by the Labor Relations Division of the Department of
Labor and Employment-National Capital Region (DOLE-NCR). He noted therein that the members of
9
the Bañez faction were not elected by the general membership but were appointed by the Executive
Board to their positions since 1985.10
The Bañez faction appealed the said March 19, 2001 Decision of the BLR Regional Director.
While the appeal was pending, the Aliazas faction filed a Very Urgent Motion for Intervention in the
BLR. They alleged therein that the Bañez faction, in complete disregard of the March 19, 2001
Decision, scheduled a "regular" election of union officers without notice to or participation of the
DOLE-NCR. 11
In an Order dated July 6, 2001, BLR Director IV Hans Leo J. Cacdac granted the motion for
intervention. He held that the unilateral act of setting the date of election on July 9, 2001 and the
12
disqualification of the Aliazas faction by the DLSUEA-COMELEC supported the intervening faction’s
fear of biased elections.
13
Thereafter, in a Resolution dated May 23, 2002, BLR Director Cacdac dismissed the appeal of the
Bañez faction. The salient portions thereof stated:
The exercise of a union member’s basic liberty to choose the union leadership is guaranteed in
Article X of [respondent’s] constitution and by-laws. Section 4 mandates the conduct of a regular
election of officers on the first Saturday of July and on the same date every three years thereafter.
In unequivocal terms, Article 241(c) of the Labor Code states that "[t]he members shall directly elect
their officers, including those of the national union or federation, to which they or their union is
affiliated, by secret ballot at intervals of five (5) years."
[The Bañez faction] admitted that no elections were conducted in 1992 and 1998, when the
terms of office of the officers expired. This Office emphasizes that even the decision to dispense
with the elections and allow the hold-over officers to continue should have been subjected to a
secret ballot under Article 241(d) which states:
The members shall determine by secret ballot, after due deliberation, any question of major policy
affecting the entire membership of the organization, unless the nature of the organization or force
majeure renders such secret ballot impractical, in which case the board of directors of the
organization may make the decision in behalf of the general membership.
With the clear and open admission that no election transpired even after the expiration of the
union officers’ terms of office, the call for the conduct of elections by the Regional Director
was valid and should be sustained. (Emphases supplied.)
14
Subsequently, in a memorandum dated May 16, 2003, BLR Director Cacdac stated that there was
no void in the union leadership as the March 19, 2001 Decision of Regional Director Maraan did not
automatically terminate the Bañez faction’s tenure in office. He explained therein that "[a]s duly-
elected officers of [respondent], their leadership is not deemed terminated by the expiration of their
terms of office, for they shall continue their functions and enjoy the rights and privileges pertaining to
their respective positions in a hold-over capacity, until their successors shall have been elected and
qualified."
15
On August 28, 2003, an election of union officers under the supervision of the DOLE was conducted.
The Bañez faction emerged as the winner thereof. The Aliazas faction contested the election
16
results.
On October 29, 2003, the Bañez faction was formally proclaimed as the winner in the August 28,
2003 election of union officers.17
The Complaint for Unfair Labor

Practices and Three Notices of
Strike
On March 20, 2001, despite the brewing conflict between the Aliazas and Bañez factions, petitioner
entered into a five-year CBA covering the period from June 1, 2000 to May 31, 2005. 18
On August 7, 2001, the Aliazas faction wrote a letter to petitioner requesting it to place in escrow the
union dues and other fees deducted from the salaries of employees pending the resolution of the
intra-union conflict. We quote the pertinent portion of the letter here:
The [BLR], in its March 19, 2001 [decision], declared that the hold-over capacity as president of Mr.
Baylon Bañez, as well as that of the other officers [of respondent] has been extinguished. It was
likewise stated in the [decision] that "to further defer the holding of a local election is whimsical,
capricious and is a violation of the union members’ rights under Article 241 and is punishable by
expulsion."
This being so, we would like to request [petitioner] to please put on escrow all union dues/agency
fees and whatever money considerations deducted from salaries of the concerned co-academic
personnel until such time that an election of union officials has been scheduled and subsequent
elections has been held. We fully understand that putting the collection on escrow means the
continuance of our monthly deductions but the same will not be remitted to respondent’s funds. 19
Petitioner acceded to the request of the Aliazas faction and informed the Bañez faction of such fact
in a letter dated August 16, 2001. Petitioner explained:
It is evident that the intra-union dispute between the incumbent set of officers of your Union on one
hand and a sizeable number of its members on the other hand has reached serious levels. By virtue
of the 19 March 2001 Decision and the 06 July 2001 Order of the Department of Labor and
Employment (DOLE), the hold-over authority of your incumbent set of officers has been considered
extinguished and an election of new union officers, to be conducted and supervised by the DOLE,
has been directed to be held. Until the result of this election [come] out and a declaration by
the DOLE of the validly elected officers is made, a void in the Union leadership exists.
In light of these circumstances, the University has no other alternative but to temporarily do the
following:
1. Establish a savings account for the Union where all the collected union dues and
agency fees will be deposited and held in trust; and
2. Discontinue normal relations with any group within the Union including the
incumbent set of officers.
We are informing you of this decision of [petitioner] not only for your guidance but also for the
apparent reason that [it] does not want itself to be unnecessarily involved in your intra-union dispute.
This is the only way [petitioner] can maintain neutrality on this matter of grave concern. (Emphasis
20
supplied.)
In view of the foregoing decision of petitioner, respondent filed a complaint for unfair labor practice in
the National Labor Relations Commission (NLRC) on August 21, 2001. It alleged that petitioner
21
committed a violation of Article 248(a) and (g) of the Labor Code which provides:
Article 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of
the following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization.
xxxx
(d) To initiate, dominate, assist or otherwise interfere with the formation or administrator of any labor
organization, including the giving of financial or other support to it or its organizers or supporters.
Respondent union asserted that the creation of escrow accounts was not an act of neutrality as it
was influenced by the Aliazas factions’s letter and was an act of interference with the internal affairs
of the union. Thus, petitioner’s non-remittance of union dues and discontinuance of normal relations
with it constituted unfair labor practice.
Petitioner, for its defense, denied the allegations of respondent and insisted that its actions were
motivated by good faith.
Meanwhile, on March 7, 2002, respondent filed a notice of strike in the National Conciliation and
Mediation Board (NCMB). 22
Shortly thereafter, or on July 12, 2002, Labor Arbiter Felipe P. Pati dismissed the August 21, 2001
complaint for unfair labor practice against petitioner for lack of merit in view of the May 23, 2002
decision of the BLR, affirming the need to conduct an election of the union’s officers. The labor
23
arbiter, in effect, upheld the validity of petitioner’s view that there was a void in the leadership of
respondent.
The July 12, 2002 Decision of Labor Arbiter Pati, however, did not settle matters between
respondent and petitioner.
On March 15, 2003, respondent sent a letter to petitioner requesting for the renegotiation of the
economic terms for the fourth and fifth years of the then current CBA, to wit:
This refers to the re-negotiation of the economic provisions for the [fourth and fifth] year[s] of the
2000-2005 [CBA] that will commence sometime in March 2003.
In this regard, the [Bañez faction] for and in behalf of [respondent] would like to respectfully request
your good office to provide us a copy of the latest Audited Financial Statements of [petitioner,]
including its budget performance report so that [petitioner] and [respondent through] their respective
authorized representatives could facilitate the negotiations thereof.
We are furnishing [petitioner through] your good self a copy of [our] CBA economic proposals for the
[fourth and fifth] year[s] of the 2000-2005 CBA signed by its authorized negotiating panel.
We also request [petitioner] to furnish us a copy of its counter proposals as well as a list of its
negotiating panel not later than ten (10) days from receipts of [our] CBA proposals so that [we] and
[petitioner] can now proceed with the initial conference to discuss the ground rules that will govern
the CBA negotiation. 24
In a letter dated March 20, 2003, petitioner denied respondent’s request. It stated therein:
25
Pursuant to the [d]ecisions of appropriate government authority, and consistent with the position
enunciated and conveyed to you by [petitioner] in my letter dated August 16, 2001, there is a
conclusion of fact that there is an absolute void in the leadership of [respondent]. Accordingly,
your representation as President or officer of, as well as, that of all persons purporting to be officers
and members of the board of the said employees association [will] not [be] recognized. Normal
relations with the union cannot occur until the said void in the leadership of [respondent] is
appropriately filled. Affected by the temporary suspension of normal relations
with [respondent] is the renegotiation of the economic provisions of the 2002-2005 CBA. No
renegotiation can occur given the void in the leadership of [respondent.] 26
As a consequence of the aforementioned letter, respondent filed a second notice of strike on April 4,
2003. Upon the petition filed by petitioner on April 11, 2003, the Secretary of Labor assumed
27 28
jurisdiction over the matter pursuant to Article 263 of the Labor Code as petitioner, an educational
29
institution, was considered as belonging to an industry indispensable to national interest and

docketed the case as OS-AJ-0015-2003. 30
On June 26, 2003, the Second Division of the NLRC affirmed the July 12, 2002 Decision of Labor
Arbiter Pati. Respondent moved for reconsideration but it was denied by the NLRC in a Resolution
31
dated September 30, 2003. 32
Meanwhile, on July 28, 2003, the Secretary of Labor issued a Decision in OS-AJ-0015-2003, finding
33
petitioner guilty of violating Article 248(g) in relation to Article 252 of the Labor Code. The salient
34
portion thereof stated:
The University is guilty of refusal to bargain amounting to an unfair labor practice under Article
248(g) of the Labor Code. Indeed there was a requirement on both parties of the performance of the
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement. Undoubtedly, both [petitioner] and [respondent] entered into a [CBA] on
[March 20, 2001. The term of the said CBA commenced on [June 1, 2000 and with the expiration of
the economic provisions on the third year, [respondent] initiated negotiation by sending a letter dated
March 15, 2003, together with the CBA proposal. In reply to the letter of [respondent], [petitioner] in
its letter dated [March 20, 2003 refused.
Such an act constituted an intentional avoidance of a duty imposed by law. There was nothing in the
[March 19, 2001 and July 6, 2001 orders] of Director Maraan and Cacdac which restrained or
enjoined compliance by the parties with their obligations under the CBA and under the law. The
issue of union leadership is distinct and separate from the duty to bargain.
In fact, BLR Director Cacdac clarified that there was no void in [respondent’s] leadership. The
pertinent decision dated March 19, 2001 x x x reads : 35
We take this opportunity to clarify that there is no void in [respondent’s] leadership. The [March 19,
2001 decision] x x x should not be construed as an automatic termination of the incumbent officers[’]
tenure of office. As duly-elected officers of [respondent], their leadership is not deemed terminated
by the expiration of their terms of office, for they shall continue their functions and enjoy the rights
and privileges pertaining to their respective positions in a hold-over capacity, until their successors
shall have been elected and qualified.
It is thus very clear. x x x. This official determination by the BLR Director [Cacdac] removes whatever
cloud of doubt on the authority of the incumbent to negotiate for and in behalf of [respondent] as the
bargaining agent of all the covered employees. [Petitioner] is duty bound to negotiate collectively
pursuant to Art. 252 of the Labor Code, as amended.
xxxx
On the question: [i]s [petitioner] guilty of unfair labor practice? This office resolves the issue in the
affirmative. Citing the case of the Divine Word University of Tacloban v. Secretary of Labor,
[petitioner] is guilty of unfair labor practice in refusing to abide by its duty to bargain collectively. The
refusal of [petitioner] to bargain is tainted with bad faith amounting to unfair labor practice. There is
no other way to resolve the issue given the facts of the case and the law on the matter.
WHEREFORE, premises considered, this Office finds [petitioner] guilty of refusal to bargain
collectively in violation of Article 252 in relation to Article 248 of the Labor Code, as amended.
Management is hereby directed to cease and desist from refusing to bargain collectively. The parties
are therefore directed to commence negotiations effective immediately. (Citations omitted.)
36
On August 1, 2003, respondent reiterated its demand on petitioner to bargain collectively pursuant to
the aforementioned Decision of the Secretary of Labor. 37
On August 4, 2003, petitioner sent a letter to respondent explaining that it cannot act on the latter’s
letter. The August 4, 2003 letter of petitioner stated:
[Petitioner’s] counsel is preparing a Motion for Reconsideration that would be filed with the Office of
the Secretary of Labor and Employment. Under the Rule, [petitioner] still has the remedy of filing
such Motion with the Office of the Secretary before elevating the matter to higher authorities should
it become necessary.
We, therefore, regret to advise you that [petitioner] cannot accede to your demand to immediately
commence negotiations for the CBA with your group or any other group of Union members, as the
case may be, until such time that the case before the Secretary is resolved with finality. We will,
therefore, continue to defer the CBA negotiations pending final resolution of the matter.
As regards your other demands, [petitioner] is of the position that the matters subject of said
demands are still pending before the various offices of the Labor Arbiters and NLRC and, therefore,
it cannot act on the same until such time that said cases are likewise resolved with finality. It cannot
be assumed that all these cases that you filed have been rendered moot and academic by the
Secretary’s Decision, otherwise you would, in effect, be admitting that you have engaged in "forum
shopping." 38
Failing to secure a reconsideration of the July 28, 2003 Decision of the Secretary of Labor, petitioner
assailed the same in the Court of Appeals via a petition for certiorari docketed as CA-G.R. SP No.
81649.
On August 27, 2003, respondent filed the third notice of strike, in the wake of petitioner’s August 4,
39
2003 letter and citing among others petitioner’s alleged violation of the CBA and continuing refusal to
bargain in good faith. Petitioner, on the other hand, filed a petition for assumption of jurisdiction for
this third notice of strike. Again, the Secretary of Labor assumed jurisdiction. This case was
40
docketed as OS-AJ-0033-2003.
On November 17, 2003, the Secretary of Labor, in resolving OS-AJ-0033-2003, cited the July 28,
2003 Decision in OS-AJ-0015-2003, and consequently declared that petitioner committed an unfair
labor practice. The salient portions of said Decision stated:
Considering that this case, docketed as Case No. OS-AJ-0033-2003 is based on the same set
of facts with another case, involving the same parties numbered as OS-AJ-0015-2003, and
based on the same factual and legal circumstances, we have to consistently hold that the
[petitioner] has indeed failed to comply with its obligation under the law. As a matter of fact, it
admits in persisting to refuse despite the fact that there is no more legal obstacle preventing the
commencement of the Collective Bargaining Negotiation between the parties. Anent the so called
void in the Union leadership, We declared that the same does not constitute a valid ground to
refuse to negotiate because [petitioner’s] duty to bargain under the law is due and
demandable under the law by [respondent] as a whole and not by any faction within the
union.
xxxx
x x x Events have lately turned out in favor of [respondent], thereby obliterating any further
justification on the part of [petitioner] not to bargain. On October 29, 2003, the new Regional
Director of DOLENCR, Ciriaco E. Lagunzad III, issued a resolution declaring the Bañez group
as the duly elected officers of the Union. x x x.
xxxx
The above election results were the outcome of a duly-held union election, supervised by the
Department’s Regional Office. This was the election ordered in the [July 6, 2001 and March
19, 2001 orders of the BLR]. This was also the same election invoked by [petitioners] in trying
to justify it continuing refusal to bargain.
The [members of the Bañez faction have] reportedly taken their oath of office and have qualified.
[Petitioner] is now under estoppel from recognizing them, considering that it committed in writing to
recognize and commence bargaining once a set of duly elected officers [is] proclaimed after an
election duly conducted under the supervision of the Department.
xxxx
Not only has [petitioner] refused to negotiate with [respondent], it has unduly withheld the money
belonging to the bargaining agent. Both these acts are illegal and are tantamount to Unfair
Labor Practice under Article 248 in relation to Article 252 of the Labor Code x x x.
ACCORDINGLY, all the foregoing premises being duly considered, this Office hereby declares that
[petitioner] committed Unfair Labor Practice in violation of [Article 248 in relation to Article 252 of the
Labor Code x x x. [Petitioner] and its duly authorized officers and personnel are therefore ordered to
cease and desist from committing said acts under pain of legal sanction.
[Petitioner] is therefore specifically directed to commence collective bargaining negotiation with

[respondents] without further delay and to immediately turn over to the Bañez group the unlawfully
withheld union dues and agency fees with legal interest corresponding to the period of the unlawful
withholding. All these specific directives should be done within ten (10) days from receipt of this
Decision and with sufficient proof of compliance herewith to be submitted immediately thereafter. 41
In accordance with the terms of the aforementioned Decision, petitioner turned over to respondent
the collected union dues and agency fees from employees which were previously placed in escrow
amounting to ₱ 441,924.99. 42
Nonetheless, petitioner moved for the reconsideration of the November 17, 2003 Decision of the
Secretary of Labor but it was denied in an Order dated January 20, 2004.
Aggrieved, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court with the Court
of Appeals. Petitioner alleged therein that the Secretary of Labor committed grave abuse of
discretion by holding that it (petitioner) was liable for unfair labor practice. Taking a contrary stance
to the findings of the Secretary of Labor, petitioner stressed that it created the escrow accounts for
the benefit of the winning faction and undertook temporary measures in light of the March 19, 2001
and July 6, 2001 Orders of the BLR. Thus, it should not be penalized for taking a hands-off stance in
the intra-union controversy between the Aliazas and Bañez factions.
In a Decision dated March 4, 2005, the Court of Appeals affirmed the November 17, 2003 Decision
and January 20, 2004 Order of the Secretary of Labor and dismissed the said petition. It held:
[Petitioner] finds reason to refuse to negotiate with [respondent’s incumbent officers] because of the
alleged "void in the union leadership" declared by the Regional Director in his March 19, 2001
decision, [but] after the election of the union officers held on August 28, 2003, continued refusal by
the University to negotiate amounts to unfair labor practice. The non-proclamation of the newly
elected union officers cannot be used as an excuse to fulfill the duty to bargain
collectively. (Emphasis supplied.)
43
Petitioner moved for reconsideration but it was denied in a Resolution dated August 5, 2005. The
Court of Appeals noted that petitioner’s arguments were a mere "rehash of the issues and
discussions it presented in its petition and in the relevant pleadings submitted x x x." 44
Meanwhile, the Court of Appeals dismissed CA-G.R. SP No. 81649 (which assailed the July 28,
2003 Decision in OS-AJ-0015-2003), in a Decision dated March 18, 2005. The said decision
45
likewise found that petitioner erred in unilaterally suspending negotiations with respondent since the
pendency of the intra-union dispute was not a justifiable reason to do so.
Petitioner moved for reconsideration of the aforesaid decision in CAG. R. SP No. 81649 but it was
denied in a Resolution dated June 7, 2005 due to lack of merit.
46
Aggrieved, petitioner elevated both the assailed decisions and resolutions in this case and in CA-
G.R. SP No. 81649, which was docketed as G.R. No. 168477, to this Court. Petitioner, in both
instances, essentially argued that it did not maliciously evade its duty to bargain. On the contrary, it
asserts that it merely relied in good faith on the March 19, 2001 Decision of the BLR that there was a
void in respondent’s leadership. 47
This Court, through its Third Division, denied G.R. No. 168477 in a minute resolution dated July 20,
2005 due to the petition’s "failure x x x to show that a reversible error had been committed by the
appellate court." The motion for reconsideration was denied with finality on September 21,
48
2005 and entry of judgment was made on November 3, 2005.

49 50
Meanwhile, respondent was ordered to file a comment herein, and, subsequently, this petition was
given due course.
We note that both G.R. No. 168477 and this petition are offshoots of petitioner’s purported
temporary measures to preserve its neutrality with regard to the perceived void in the union
leadership. While these two cases arose out of different notices to strike filed on April 3, 2003 and
August 27, 2003, it is undeniable that the facts cited and the arguments raised by petitioner are
almost identical. Inevitably, G.R. No. 168477 and this petition seek only one relief, that is, to
absolve petitioner from respondent’s charge of committing an unfair labor practice, or
specifically, a violation of Article 248(g) in relation to Article 252 of the Labor Code.
For this reason, we are constrained to apply the law of the case doctrine in light of the finality of our
July 20, 2005 and September 21, 2005 resolutions in G.R. No. 168477. In other words, our previous
affirmance of the Court of Appeals’ finding – that petitioner erred in suspending collective bargaining
negotiations with the union and in placing the union funds in escrow considering that the intra-union
dispute between the Aliazas and Bañez factions was not a justification therefor — is binding herein.
Moreover, we note that entry of judgment in G.R. No. 168477 was made on November 3, 2005, and
that put to an end to the litigation of said issues once and for all. 51
The law of the case has been defined as the opinion delivered on a former appeal. It means that
whatever is once irrevocably established as the controlling legal rule or decision between the same
parties in the same case continues to be the law of the case, whether correct on general principles
or not, so long as the facts on which such decision was predicated continue to be the facts of the
case before the court. 52
In any event, upon our review of the records of this case, we find that the Court of Appeals
committed no reversible error in its assailed Decision dated March 4, 2005 and Resolution dated
August 5, 2005. Petitioner’s reliance on the July 12, 2002 Decision of Labor Arbiter Pati, and the
NLRC’s affirmance thereof, is misplaced. The unfair labor practice complaint dismissed by Labor
Arbiter Pati questioned petitioner’s actions immediately after the March 19, 2001 Decision of BLR
Regional Director Maraan, finding that "the reason for the hold-over [of the previously elected union
officers] is already extinguished." The present controversy involves petitioner’s actions subsequent
to (1) the clarification of said March 19, 2001 Maraan Decision by BLR Director Cacdac who opined
in a May 16, 2003 memorandum that the then incumbent union officers (i.e., the Bañez faction)
continued to hold office until their successors have been elected and qualified, and (2) the July 28,
2003 Decision of the Secretary of Labor in OS-AJ-0015-2003 ruling that the very same intra-union
dispute (subject of several notices of strike) is insufficient ground for the petitioner to suspend CBA
negotiations with respondent union. We take notice, too, that the aforesaid Decision of Labor Arbiter
Pati has since been set aside by the Court of Appeals and such reversal was upheld by this Court’s
Second Division in its Decision dated April 7, 2009 in G.R. No. 177283, wherein petitioner was found
liable for unfair labor practice.
53
Neither can petitioner seek refuge in its defense that as early as November 2003 it had already
released the escrowed union dues to respondent and normalized relations with the latter. The fact
remains that from its receipt of the July 28, 2003 Decision of the Secretary of Labor in OS-AJ-0015-
2003 until its receipt of the November 17, 2003 Decision of the Secretary of Labor in OS-AJ-0033-
2003, petitioner failed in its duty to collectively bargain with respondent union without valid reason.
At most, such subsequent acts of compliance with the issuances in OS-AJ-0015-2003 and OS-AJ-
0033-2003 merely rendered moot and academic the Secretary of Labor’s directives for petitioner to
commence collective bargaining negotiations within the period provided.
To conclude, we hold that the findings of fact of the Secretary of Labor and the Court of Appeals, as
well as the conclusions derived therefrom, were amply supported by evidence on record. Thus, in
line with jurisprudence that such findings are binding on this Court, we see no reason to disturb the
same. 54
SO ORDERED.

Associate Justice
Acting Chairperson, First Division
WE CONCUR:
LUCAS P. BERSAMIN
Associate Justice
MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.

Associate Justice
ATTESTATION

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's
before the case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 295,
The Judiciary Act of 1948, as amended)
Footnotes
* Per Special Order No. 1226 dated Mav 30, 2012. I •
* Per Special Order No. 1227 dated May 30, 2012.
Rollo (Ci.R. No. 169252), pp. 46-55; penned by Associate .Justice Arcangelita M. Rornilla-
1
Lontok with Associate Justices Rodrigo V. Cosico and Danilo B. Pine, concurring.
Id. at 74-75.
2
Id. at 119-125; signed by Acting Secretary Manuel G. Imson.

3
Id. at 127-133; signed by Secretary Patricia A. Sto. Tomas.

4
Id. at 241; docketed as BLR-A-TR-41-5-8-01 (NLRC-OD-005-006-LRD).

5
Petitioner contends that the non-holding of elections was also contrary to Article 241(c) of
6
the Labor Code.
Rollo (G.R. No. 169252), pp. 241-242.

7
LABOR CODE, Article 253-A. Terms of a Collective Bargaining Agreement. - Any Collective

8
Bargaining Agreement [CBA] that the parties may enter into shall, insofar as the
representations aspect is concerned, be for a term of five (5) years. No petition questioning
the majority status of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of Labor and Employment
outside of the sixty-day period immediately before the date of expiry of such five-year term of
the [CBA]. All other provisions of the [CBA] shall be renegotiated not later than three (3)
years after its execution. Any agreement of such other provisions of the [CBA] entered into
within six (6) months from the date of expiry of the term of such other provisions as fixed in
such [CBA], shall retroact to the day immediately following such date. If any such agreement
is entered into beyond six months, the parties shall agree on the duration of retroactivity
thereof. In case of a deadlock in the renegotiation of the [CBA], the parties may exercise
their rights under this Code.
Rollo (G.R. No. 169252), pp. 218-224. The decretal portion stated:

9
WHEREFORE, in view of the foregoing, the petition for the conduct of an election of officers
among the members of [respondent] is hereby GRANTED. Let the election of officers be
conducted not later than 30 days from receipt of this order subject to pre-election conference
to be presided by the Labor Relations Division to discuss/thresh out the mechanics of
election.
10
Id. at 219-220.
11
Id. at 226.
12
Id. at 226-227. The decretal portion stated:
WHEREFORE, without necessarily resolving the merits of the appeal and considering the
urgency of the issues raised by [the Aliazas faction] and the limited time x x x the motion is
hereby GRANTED. Consequently, [the Bañez faction] and/or the members of the
DLSUEACOMELEC x x x are hereby directed to cease and desist from conducting the x x x
election of DLSUEA officers on July 9, 2001 until further orders from this office.
13
Id. at 227.
14
Id. at 241-246.
15
Id. at 416.
Id. at 345-346; Minutes of the Election of Officers at the De La Salle University Employees
16
Association with Case No. NCR-OD-0005-006-LRD on August 28, 2003.
17
Id. at 124; Resolution issued by Regional Director Ciriaco N. Lagunzad.
18
Rollo (G.R. No. 168477), pp. 46-47.
19
Records, p. 26.
Id. at 24; Letter dated August 2001 of DLSU Executive Vice President (EVP), Dr. Carmelita
20
L. Quebengco, to the Bañez faction.
Rollo (G.R. No. 169254), pp. 230-231; docketed as NLRC NCR South Sector Case No. 30-
21
08-03757-01.
22
Docketed as NCMB-NCR-NS-03-093-02.
23
Rollo (G.R. No. 169254), pp. 247-258.
24
Id. at 533.
25
Id. at 534.
Contra note 15, May 16, 2003 memorandum of BLR Director Cacdac regarding the effect of
26
the March 19, 2001 order of the BLR.

27
Rollo (G.R. No. 169254), p. 121; docketed as NCMB-NCR-NS-08-246-03.
28
Id. at 147-162.
LABOR CODE, Article 263. Strikes, Picketing and Lockouts. – x x x (g) When, in his
29
opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or certification, all
striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce the
same.
30
Rollo (G.R. No. 169254), pp. 260-270.
Id. at 288-291; Resolution dated June 26, 2003. Penned by Presiding Commissioner Raul
31
T. Aquino and concurred in by Commissioners Victoriano R. Calaycay and Angelita A.

Gacutan.
32
Id. at 409-410.
33
Rollo (G.R. No. 168477), pp. 101-110.
Labor Code, Article 248. Unfair labor practices of employers. – It shall be unlawful for an
34
employer to commit any of the following unfair labor practice:
xxxx
(g) To violate the duty to bargain collectively as prescribed by this Code.
xxxx
Article 252. Meaning of Duty to Bargain Collectively. The duty to bargain collectively means
good faith for the purpose of negotiating an agreement with respect to wages, hours of work
grievances or questions arising under such agreement and executing a contract under such
agreements of requested by either party but such duty does not compel any party to agree to
a proposal or to make any concessions.
35
This should refer to the May 16, 2003 memorandum of BLR Director Cacdac.
36
Rollo (G.R. No. 168477), pp. 106-110.
37
Rollo (G.R. No. 169254), pp. 535-536.
38
Id. at 537-538.
39
Id. at 135-136.
40
Id. at 147-162.
41
Id. at 123-125.
42
Id. at 385; letter and acknowledgment receipt dated November 28, 2008.
43
Id. at 53-54.
44
Id. at 75.
Rollo (G.R. No. 168477), pp. 44-55; penned by Associate Justice Rosmari D. Carandang
45
with Associate Justices Remedios Salazar-Fernando and Monina Arevalo-Zenarosa,

concurring.
46
Id. at 57-58.
47
Rollo (G.R. No. 169254), pp. 3-44 and rollo (G.R. No. 168477), pp. 3-43.
48
Rollo (G.R. No. 168477), p. 526.
49
Id. at 550.
50
Id. at 553.
51
See Alcantara v. Ponce, 514 Phil. 222, 244-245 (2005).
Padillo v. Court of Appeals, 422 Phil. 334, 351-352 (2001); See also Banco de Oro-EPCI,

52
Inc. v. Tansipek, G.R. No. 181235, July 22, 2009, 593 SCRA 456, 464.
De La Salle University v. De La Salle University Employees Association (DLSUEA-

53
NAFTEU), G.R. No. 177283, April 7, 2009, 584 SCRA 592.
See Colegio de San Juan de Letran v. Association of Employees and Faculty of

54
Letran, 394 Phil. 936, 949 (2000); Rural Bank of Alaminos Employees Union v. National
Labor Relations Commission, 376 Phil. 18, 27-28 (1999).

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 169254 August 23, 2012

DE LA SALLE UNIVERSITY, Petitioner,
vs.
DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA-NAFTEU), Respondent.
LEONARDO-DE CASTRO,*
PERLAS-BERNABE, **
DECISION
LEONARDO-DE CASTRO, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing
the March 4, 2005 Decision and August 5, 2005 Resolution of the Court of Appeals in CA-G.R. SP
1 2
No. 82472, entitled De La Salle University versus the Honorable Secretary of Labor and De La Salle
University Employees Association (DLSUEA-NAFTEU), which affirmed the November 17, 2003
Decision and January 20, 2004 Order of the Secretary of Labor in OS-AJ-0033-2003 (NCMB-NCR-
3 4
NS-08-246-03). These decisions and resolutions consistently found petitioner guilty of unfair labor
practice for failure to bargain collectively with respondent.
This petition involves one of the three notices of strike filed by respondent De La Salle University
Employees Association (DLSUEANAFTEU) against petitioner De La Salle University due to its
refusal to bargain collectively with it in light of the intra-union dispute between respondent’s two
opposing factions. The following narration of facts will first discuss the circumstances surrounding
the said intra-union conflict between the rival factions of respondent union and, thereafter, recite the
cases relating to the aforementioned conflict, from the complaint for unfair labor practice to the
subsequent notices of strike, and to the assumption of jurisdiction by the Secretary of Labor.
Petition for Election of Union

Officers
On May 30, 2000, some of respondent’s members headed by Belen Aliazas (the Aliazas faction)
filed a petition for the election of union officers in the Bureau of Labor Relations (BLR). They alleged
5
therein that there has been no election for respondent’s officers since 1992 in supposed violation of
the respondent union’s constitution and by-laws which provided for an election of officers every three
years. It would appear that respondent’s members repeatedly voted to approve the hold-over of the
6
previously elected officers led by Baylon R. Bañez (Bañez faction) and to defer the elections to
expedite the negotiations of the economic terms covering the last two years of the 1995-2000
collective bargaining agreement (CBA) pursuant to Article 253-A of the Labor Code.
7 8
On March 19, 2001, BLR Regional Director Alex E. Maraan issued a Decision ordering the conduct
of an election of union officers to be presided by the Labor Relations Division of the Department of
Labor and Employment-National Capital Region (DOLE-NCR). He noted therein that the members of
9
the Bañez faction were not elected by the general membership but were appointed by the Executive
Board to their positions since 1985.10
The Bañez faction appealed the said March 19, 2001 Decision of the BLR Regional Director.
While the appeal was pending, the Aliazas faction filed a Very Urgent Motion for Intervention in the
BLR. They alleged therein that the Bañez faction, in complete disregard of the March 19, 2001
Decision, scheduled a "regular" election of union officers without notice to or participation of the
DOLE-NCR. 11
In an Order dated July 6, 2001, BLR Director IV Hans Leo J. Cacdac granted the motion for
intervention. He held that the unilateral act of setting the date of election on July 9, 2001 and the
12
disqualification of the Aliazas faction by the DLSUEA-COMELEC supported the intervening faction’s
fear of biased elections.13
Thereafter, in a Resolution dated May 23, 2002, BLR Director Cacdac dismissed the appeal of the
Bañez faction. The salient portions thereof stated:
The exercise of a union member’s basic liberty to choose the union leadership is guaranteed in
Article X of [respondent’s] constitution and by-laws. Section 4 mandates the conduct of a regular
election of officers on the first Saturday of July and on the same date every three years thereafter.
In unequivocal terms, Article 241(c) of the Labor Code states that "[t]he members shall directly elect
their officers, including those of the national union or federation, to which they or their union is
affiliated, by secret ballot at intervals of five (5) years."
[The Bañez faction] admitted that no elections were conducted in 1992 and 1998, when the
terms of office of the officers expired. This Office emphasizes that even the decision to dispense
with the elections and allow the hold-over officers to continue should have been subjected to a
secret ballot under Article 241(d) which states:
The members shall determine by secret ballot, after due deliberation, any question of major policy
affecting the entire membership of the organization, unless the nature of the organization or force
majeure renders such secret ballot impractical, in which case the board of directors of the
organization may make the decision in behalf of the general membership.
With the clear and open admission that no election transpired even after the expiration of the
union officers’ terms of office, the call for the conduct of elections by the Regional Director
was valid and should be sustained. (Emphases supplied.)
14
Subsequently, in a memorandum dated May 16, 2003, BLR Director Cacdac stated that there was
no void in the union leadership as the March 19, 2001 Decision of Regional Director Maraan did not
automatically terminate the Bañez faction’s tenure in office. He explained therein that "[a]s duly-
elected officers of [respondent], their leadership is not deemed terminated by the expiration of their
terms of office, for they shall continue their functions and enjoy the rights and privileges pertaining to
their respective positions in a hold-over capacity, until their successors shall have been elected and
qualified."
15
On August 28, 2003, an election of union officers under the supervision of the DOLE was conducted.
The Bañez faction emerged as the winner thereof. The Aliazas faction contested the election
16
results.
On October 29, 2003, the Bañez faction was formally proclaimed as the winner in the August 28,
2003 election of union officers.17
The Complaint for Unfair Labor

Practices and Three Notices of
Strike
On March 20, 2001, despite the brewing conflict between the Aliazas and Bañez factions, petitioner
entered into a five-year CBA covering the period from June 1, 2000 to May 31, 2005. 18
On August 7, 2001, the Aliazas faction wrote a letter to petitioner requesting it to place in escrow the
union dues and other fees deducted from the salaries of employees pending the resolution of the
intra-union conflict. We quote the pertinent portion of the letter here:
The [BLR], in its March 19, 2001 [decision], declared that the hold-over capacity as president of Mr.
Baylon Bañez, as well as that of the other officers [of respondent] has been extinguished. It was
likewise stated in the [decision] that "to further defer the holding of a local election is whimsical,
capricious and is a violation of the union members’ rights under Article 241 and is punishable by
expulsion."
This being so, we would like to request [petitioner] to please put on escrow all union dues/agency
fees and whatever money considerations deducted from salaries of the concerned co-academic
personnel until such time that an election of union officials has been scheduled and subsequent
elections has been held. We fully understand that putting the collection on escrow means the
continuance of our monthly deductions but the same will not be remitted to respondent’s funds. 19
Petitioner acceded to the request of the Aliazas faction and informed the Bañez faction of such fact
in a letter dated August 16, 2001. Petitioner explained:
It is evident that the intra-union dispute between the incumbent set of officers of your Union on one
hand and a sizeable number of its members on the other hand has reached serious levels. By virtue
of the 19 March 2001 Decision and the 06 July 2001 Order of the Department of Labor and
Employment (DOLE), the hold-over authority of your incumbent set of officers has been considered
extinguished and an election of new union officers, to be conducted and supervised by the DOLE,
has been directed to be held. Until the result of this election [come] out and a declaration by
the DOLE of the validly elected officers is made, a void in the Union leadership exists.
In light of these circumstances, the University has no other alternative but to temporarily do the
following:
1. Establish a savings account for the Union where all the collected union dues and
agency fees will be deposited and held in trust; and
2. Discontinue normal relations with any group within the Union including the
incumbent set of officers.
We are informing you of this decision of [petitioner] not only for your guidance but also for the
apparent reason that [it] does not want itself to be unnecessarily involved in your intra-union dispute.
This is the only way [petitioner] can maintain neutrality on this matter of grave concern. (Emphasis
20
supplied.)
In view of the foregoing decision of petitioner, respondent filed a complaint for unfair labor practice in
the National Labor Relations Commission (NLRC) on August 21, 2001. It alleged that petitioner
21
committed a violation of Article 248(a) and (g) of the Labor Code which provides:
Article 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of
the following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization.
xxxx
(d) To initiate, dominate, assist or otherwise interfere with the formation or administrator of any labor
organization, including the giving of financial or other support to it or its organizers or supporters.
Respondent union asserted that the creation of escrow accounts was not an act of neutrality as it
was influenced by the Aliazas factions’s letter and was an act of interference with the internal affairs
of the union. Thus, petitioner’s non-remittance of union dues and discontinuance of normal relations
with it constituted unfair labor practice.
Petitioner, for its defense, denied the allegations of respondent and insisted that its actions were
motivated by good faith.
Meanwhile, on March 7, 2002, respondent filed a notice of strike in the National Conciliation and
Mediation Board (NCMB). 22
Shortly thereafter, or on July 12, 2002, Labor Arbiter Felipe P. Pati dismissed the August 21, 2001
complaint for unfair labor practice against petitioner for lack of merit in view of the May 23, 2002
decision of the BLR, affirming the need to conduct an election of the union’s officers. The labor
23
arbiter, in effect, upheld the validity of petitioner’s view that there was a void in the leadership of
respondent.
The July 12, 2002 Decision of Labor Arbiter Pati, however, did not settle matters between
respondent and petitioner.
On March 15, 2003, respondent sent a letter to petitioner requesting for the renegotiation of the
economic terms for the fourth and fifth years of the then current CBA, to wit:
This refers to the re-negotiation of the economic provisions for the [fourth and fifth] year[s] of the
2000-2005 [CBA] that will commence sometime in March 2003.
In this regard, the [Bañez faction] for and in behalf of [respondent] would like to respectfully request
your good office to provide us a copy of the latest Audited Financial Statements of [petitioner,]
including its budget performance report so that [petitioner] and [respondent through] their respective
authorized representatives could facilitate the negotiations thereof.
We are furnishing [petitioner through] your good self a copy of [our] CBA economic proposals for the
[fourth and fifth] year[s] of the 2000-2005 CBA signed by its authorized negotiating panel.
We also request [petitioner] to furnish us a copy of its counter proposals as well as a list of its
negotiating panel not later than ten (10) days from receipts of [our] CBA proposals so that [we] and
[petitioner] can now proceed with the initial conference to discuss the ground rules that will govern
the CBA negotiation. 24
In a letter dated March 20, 2003, petitioner denied respondent’s request. It stated therein:
25
Pursuant to the [d]ecisions of appropriate government authority, and consistent with the position
enunciated and conveyed to you by [petitioner] in my letter dated August 16, 2001, there is a
conclusion of fact that there is an absolute void in the leadership of [respondent]. Accordingly,
your representation as President or officer of, as well as, that of all persons purporting to be officers
and members of the board of the said employees association [will] not [be] recognized. Normal
relations with the union cannot occur until the said void in the leadership of [respondent] is
appropriately filled. Affected by the temporary suspension of normal relations
with [respondent] is the renegotiation of the economic provisions of the 2002-2005 CBA. No
renegotiation can occur given the void in the leadership of [respondent.] 26
As a consequence of the aforementioned letter, respondent filed a second notice of strike on April 4,
2003. Upon the petition filed by petitioner on April 11, 2003, the Secretary of Labor assumed
27 28
jurisdiction over the matter pursuant to Article 263 of the Labor Code as petitioner, an educational
29
institution, was considered as belonging to an industry indispensable to national interest and

docketed the case as OS-AJ-0015-2003. 30
On June 26, 2003, the Second Division of the NLRC affirmed the July 12, 2002 Decision of Labor
Arbiter Pati. Respondent moved for reconsideration but it was denied by the NLRC in a Resolution
31
dated September 30, 2003. 32
Meanwhile, on July 28, 2003, the Secretary of Labor issued a Decision in OS-AJ-0015-2003, finding
33
petitioner guilty of violating Article 248(g) in relation to Article 252 of the Labor Code. The salient
34
portion thereof stated:
The University is guilty of refusal to bargain amounting to an unfair labor practice under Article
248(g) of the Labor Code. Indeed there was a requirement on both parties of the performance of the
negotiating an agreement. Undoubtedly, both [petitioner] and [respondent] entered into a [CBA] on
[March 20, 2001. The term of the said CBA commenced on [June 1, 2000 and with the expiration of
the economic provisions on the third year, [respondent] initiated negotiation by sending a letter dated
March 15, 2003, together with the CBA proposal. In reply to the letter of [respondent], [petitioner] in
its letter dated [March 20, 2003 refused.
Such an act constituted an intentional avoidance of a duty imposed by law. There was nothing in the
[March 19, 2001 and July 6, 2001 orders] of Director Maraan and Cacdac which restrained or
enjoined compliance by the parties with their obligations under the CBA and under the law. The
issue of union leadership is distinct and separate from the duty to bargain.
In fact, BLR Director Cacdac clarified that there was no void in [respondent’s] leadership. The
pertinent decision dated March 19, 2001 x x x reads : 35
We take this opportunity to clarify that there is no void in [respondent’s] leadership. The [March 19,
2001 decision] x x x should not be construed as an automatic termination of the incumbent officers[’]
tenure of office. As duly-elected officers of [respondent], their leadership is not deemed terminated
by the expiration of their terms of office, for they shall continue their functions and enjoy the rights
and privileges pertaining to their respective positions in a hold-over capacity, until their successors
shall have been elected and qualified.
It is thus very clear. x x x. This official determination by the BLR Director [Cacdac] removes whatever
cloud of doubt on the authority of the incumbent to negotiate for and in behalf of [respondent] as the
bargaining agent of all the covered employees. [Petitioner] is duty bound to negotiate collectively
pursuant to Art. 252 of the Labor Code, as amended.
xxxx
On the question: [i]s [petitioner] guilty of unfair labor practice? This office resolves the issue in the
affirmative. Citing the case of the Divine Word University of Tacloban v. Secretary of Labor,
[petitioner] is guilty of unfair labor practice in refusing to abide by its duty to bargain collectively. The
refusal of [petitioner] to bargain is tainted with bad faith amounting to unfair labor practice. There is
no other way to resolve the issue given the facts of the case and the law on the matter.
WHEREFORE, premises considered, this Office finds [petitioner] guilty of refusal to bargain
collectively in violation of Article 252 in relation to Article 248 of the Labor Code, as amended.
Management is hereby directed to cease and desist from refusing to bargain collectively. The parties
are therefore directed to commence negotiations effective immediately. (Citations omitted.)
36
On August 1, 2003, respondent reiterated its demand on petitioner to bargain collectively pursuant to
the aforementioned Decision of the Secretary of Labor. 37
On August 4, 2003, petitioner sent a letter to respondent explaining that it cannot act on the latter’s
letter. The August 4, 2003 letter of petitioner stated:
[Petitioner’s] counsel is preparing a Motion for Reconsideration that would be filed with the Office of
the Secretary of Labor and Employment. Under the Rule, [petitioner] still has the remedy of filing
such Motion with the Office of the Secretary before elevating the matter to higher authorities should
it become necessary.
We, therefore, regret to advise you that [petitioner] cannot accede to your demand to immediately
commence negotiations for the CBA with your group or any other group of Union members, as the
case may be, until such time that the case before the Secretary is resolved with finality. We will,
therefore, continue to defer the CBA negotiations pending final resolution of the matter.
As regards your other demands, [petitioner] is of the position that the matters subject of said
demands are still pending before the various offices of the Labor Arbiters and NLRC and, therefore,
it cannot act on the same until such time that said cases are likewise resolved with finality. It cannot
be assumed that all these cases that you filed have been rendered moot and academic by the
Secretary’s Decision, otherwise you would, in effect, be admitting that you have engaged in "forum
shopping." 38
Failing to secure a reconsideration of the July 28, 2003 Decision of the Secretary of Labor, petitioner
assailed the same in the Court of Appeals via a petition for certiorari docketed as CA-G.R. SP No.
81649.
On August 27, 2003, respondent filed the third notice of strike, in the wake of petitioner’s August 4,
39
2003 letter and citing among others petitioner’s alleged violation of the CBA and continuing refusal to
bargain in good faith. Petitioner, on the other hand, filed a petition for assumption of jurisdiction for
this third notice of strike. Again, the Secretary of Labor assumed jurisdiction. This case was
40
docketed as OS-AJ-0033-2003.
On November 17, 2003, the Secretary of Labor, in resolving OS-AJ-0033-2003, cited the July 28,
2003 Decision in OS-AJ-0015-2003, and consequently declared that petitioner committed an unfair
labor practice. The salient portions of said Decision stated:
Considering that this case, docketed as Case No. OS-AJ-0033-2003 is based on the same set
of facts with another case, involving the same parties numbered as OS-AJ-0015-2003, and
based on the same factual and legal circumstances, we have to consistently hold that the
[petitioner] has indeed failed to comply with its obligation under the law. As a matter of fact, it
admits in persisting to refuse despite the fact that there is no more legal obstacle preventing the
commencement of the Collective Bargaining Negotiation between the parties. Anent the so called
void in the Union leadership, We declared that the same does not constitute a valid ground to
refuse to negotiate because [petitioner’s] duty to bargain under the law is due and
demandable under the law by [respondent] as a whole and not by any faction within the
union.
xxxx
x x x Events have lately turned out in favor of [respondent], thereby obliterating any further
justification on the part of [petitioner] not to bargain. On October 29, 2003, the new Regional
Director of DOLENCR, Ciriaco E. Lagunzad III, issued a resolution declaring the Bañez group
as the duly elected officers of the Union. x x x.
xxxx
The above election results were the outcome of a duly-held union election, supervised by the
Department’s Regional Office. This was the election ordered in the [July 6, 2001 and March
19, 2001 orders of the BLR]. This was also the same election invoked by [petitioners] in trying
to justify it continuing refusal to bargain.
The [members of the Bañez faction have] reportedly taken their oath of office and have qualified.
[Petitioner] is now under estoppel from recognizing them, considering that it committed in writing to
recognize and commence bargaining once a set of duly elected officers [is] proclaimed after an
election duly conducted under the supervision of the Department.
xxxx
Not only has [petitioner] refused to negotiate with [respondent], it has unduly withheld the money
belonging to the bargaining agent. Both these acts are illegal and are tantamount to Unfair
Labor Practice under Article 248 in relation to Article 252 of the Labor Code x x x.
ACCORDINGLY, all the foregoing premises being duly considered, this Office hereby declares that
[petitioner] committed Unfair Labor Practice in violation of [Article 248 in relation to Article 252 of the
Labor Code x x x. [Petitioner] and its duly authorized officers and personnel are therefore ordered to
cease and desist from committing said acts under pain of legal sanction.
[Petitioner] is therefore specifically directed to commence collective bargaining negotiation with

[respondents] without further delay and to immediately turn over to the Bañez group the unlawfully
withheld union dues and agency fees with legal interest corresponding to the period of the unlawful
withholding. All these specific directives should be done within ten (10) days from receipt of this
Decision and with sufficient proof of compliance herewith to be submitted immediately thereafter. 41
In accordance with the terms of the aforementioned Decision, petitioner turned over to respondent
the collected union dues and agency fees from employees which were previously placed in escrow
amounting to ₱ 441,924.99. 42
Nonetheless, petitioner moved for the reconsideration of the November 17, 2003 Decision of the
Secretary of Labor but it was denied in an Order dated January 20, 2004.
Aggrieved, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court with the Court
of Appeals. Petitioner alleged therein that the Secretary of Labor committed grave abuse of
discretion by holding that it (petitioner) was liable for unfair labor practice. Taking a contrary stance
to the findings of the Secretary of Labor, petitioner stressed that it created the escrow accounts for
the benefit of the winning faction and undertook temporary measures in light of the March 19, 2001
and July 6, 2001 Orders of the BLR. Thus, it should not be penalized for taking a hands-off stance in
the intra-union controversy between the Aliazas and Bañez factions.
In a Decision dated March 4, 2005, the Court of Appeals affirmed the November 17, 2003 Decision
and January 20, 2004 Order of the Secretary of Labor and dismissed the said petition. It held:
[Petitioner] finds reason to refuse to negotiate with [respondent’s incumbent officers] because of the
alleged "void in the union leadership" declared by the Regional Director in his March 19, 2001
decision, [but] after the election of the union officers held on August 28, 2003, continued refusal by
the University to negotiate amounts to unfair labor practice. The non-proclamation of the newly
elected union officers cannot be used as an excuse to fulfill the duty to bargain
collectively. (Emphasis supplied.)
43
Petitioner moved for reconsideration but it was denied in a Resolution dated August 5, 2005. The
Court of Appeals noted that petitioner’s arguments were a mere "rehash of the issues and
discussions it presented in its petition and in the relevant pleadings submitted x x x."44
Meanwhile, the Court of Appeals dismissed CA-G.R. SP No. 81649 (which assailed the July 28,
2003 Decision in OS-AJ-0015-2003), in a Decision dated March 18, 2005. The said decision
45
likewise found that petitioner erred in unilaterally suspending negotiations with respondent since the
pendency of the intra-union dispute was not a justifiable reason to do so.
Petitioner moved for reconsideration of the aforesaid decision in CAG. R. SP No. 81649 but it was
denied in a Resolution dated June 7, 2005 due to lack of merit.
46
Aggrieved, petitioner elevated both the assailed decisions and resolutions in this case and in CA-
G.R. SP No. 81649, which was docketed as G.R. No. 168477, to this Court. Petitioner, in both
instances, essentially argued that it did not maliciously evade its duty to bargain. On the contrary, it
asserts that it merely relied in good faith on the March 19, 2001 Decision of the BLR that there was a
void in respondent’s leadership. 47
This Court, through its Third Division, denied G.R. No. 168477 in a minute resolution dated July 20,
2005 due to the petition’s "failure x x x to show that a reversible error had been committed by the
appellate court." The motion for reconsideration was denied with finality on September 21,
48
2005 and entry of judgment was made on November 3, 2005.

49 50
Meanwhile, respondent was ordered to file a comment herein, and, subsequently, this petition was
given due course.
We note that both G.R. No. 168477 and this petition are offshoots of petitioner’s purported
temporary measures to preserve its neutrality with regard to the perceived void in the union
leadership. While these two cases arose out of different notices to strike filed on April 3, 2003 and
August 27, 2003, it is undeniable that the facts cited and the arguments raised by petitioner are
almost identical. Inevitably, G.R. No. 168477 and this petition seek only one relief, that is, to
absolve petitioner from respondent’s charge of committing an unfair labor practice, or
specifically, a violation of Article 248(g) in relation to Article 252 of the Labor Code.
For this reason, we are constrained to apply the law of the case doctrine in light of the finality of our
July 20, 2005 and September 21, 2005 resolutions in G.R. No. 168477. In other words, our previous
affirmance of the Court of Appeals’ finding – that petitioner erred in suspending collective bargaining
negotiations with the union and in placing the union funds in escrow considering that the intra-union
dispute between the Aliazas and Bañez factions was not a justification therefor — is binding herein.
Moreover, we note that entry of judgment in G.R. No. 168477 was made on November 3, 2005, and
that put to an end to the litigation of said issues once and for all.
51
The law of the case has been defined as the opinion delivered on a former appeal. It means that
whatever is once irrevocably established as the controlling legal rule or decision between the same
parties in the same case continues to be the law of the case, whether correct on general principles
or not, so long as the facts on which such decision was predicated continue to be the facts of the
case before the court.52
In any event, upon our review of the records of this case, we find that the Court of Appeals
committed no reversible error in its assailed Decision dated March 4, 2005 and Resolution dated
August 5, 2005. Petitioner’s reliance on the July 12, 2002 Decision of Labor Arbiter Pati, and the
NLRC’s affirmance thereof, is misplaced. The unfair labor practice complaint dismissed by Labor
Arbiter Pati questioned petitioner’s actions immediately after the March 19, 2001 Decision of BLR
Regional Director Maraan, finding that "the reason for the hold-over [of the previously elected union
officers] is already extinguished." The present controversy involves petitioner’s actions subsequent
to (1) the clarification of said March 19, 2001 Maraan Decision by BLR Director Cacdac who opined
in a May 16, 2003 memorandum that the then incumbent union officers (i.e., the Bañez faction)
continued to hold office until their successors have been elected and qualified, and (2) the July 28,
2003 Decision of the Secretary of Labor in OS-AJ-0015-2003 ruling that the very same intra-union
dispute (subject of several notices of strike) is insufficient ground for the petitioner to suspend CBA
negotiations with respondent union. We take notice, too, that the aforesaid Decision of Labor Arbiter
Pati has since been set aside by the Court of Appeals and such reversal was upheld by this Court’s
Second Division in its Decision dated April 7, 2009 in G.R. No. 177283, wherein petitioner was found
liable for unfair labor practice.
53
Neither can petitioner seek refuge in its defense that as early as November 2003 it had already
released the escrowed union dues to respondent and normalized relations with the latter. The fact
remains that from its receipt of the July 28, 2003 Decision of the Secretary of Labor in OS-AJ-0015-
2003 until its receipt of the November 17, 2003 Decision of the Secretary of Labor in OS-AJ-0033-
2003, petitioner failed in its duty to collectively bargain with respondent union without valid reason.
At most, such subsequent acts of compliance with the issuances in OS-AJ-0015-2003 and OS-AJ-
0033-2003 merely rendered moot and academic the Secretary of Labor’s directives for petitioner to
commence collective bargaining negotiations within the period provided.
To conclude, we hold that the findings of fact of the Secretary of Labor and the Court of Appeals, as
well as the conclusions derived therefrom, were amply supported by evidence on record. Thus, in
line with jurisprudence that such findings are binding on this Court, we see no reason to disturb the
same. 54
SO ORDERED.
Associate Justice
WE CONCUR:
LUCAS P. BERSAMIN
Associate Justice
MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.

Associate Justice
ATTESTATION

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's
before the case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 295,
The Judiciary Act of 1948, as amended)
Footnotes
* Per Special Order No. 1226 dated Mav 30, 2012. I •
* Per Special Order No. 1227 dated May 30, 2012.
Rollo (Ci.R. No. 169252), pp. 46-55; penned by Associate .Justice Arcangelita M. Rornilla-
1
Lontok with Associate Justices Rodrigo V. Cosico and Danilo B. Pine, concurring.
Id. at 74-75.
2
Id. at 119-125; signed by Acting Secretary Manuel G. Imson.

3
Id. at 127-133; signed by Secretary Patricia A. Sto. Tomas.
4
Id. at 241; docketed as BLR-A-TR-41-5-8-01 (NLRC-OD-005-006-LRD).

5
Petitioner contends that the non-holding of elections was also contrary to Article 241(c) of
6
the Labor Code.
Rollo (G.R. No. 169252), pp. 241-242.

7
LABOR CODE, Article 253-A. Terms of a Collective Bargaining Agreement. - Any Collective

8
Bargaining Agreement [CBA] that the parties may enter into shall, insofar as the
representations aspect is concerned, be for a term of five (5) years. No petition questioning
the majority status of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of Labor and Employment
outside of the sixty-day period immediately before the date of expiry of such five-year term of
the [CBA]. All other provisions of the [CBA] shall be renegotiated not later than three (3)
years after its execution. Any agreement of such other provisions of the [CBA] entered into
within six (6) months from the date of expiry of the term of such other provisions as fixed in
such [CBA], shall retroact to the day immediately following such date. If any such agreement
is entered into beyond six months, the parties shall agree on the duration of retroactivity
thereof. In case of a deadlock in the renegotiation of the [CBA], the parties may exercise
their rights under this Code.
Rollo (G.R. No. 169252), pp. 218-224. The decretal portion stated:

9
WHEREFORE, in view of the foregoing, the petition for the conduct of an election of officers
among the members of [respondent] is hereby GRANTED. Let the election of officers be
conducted not later than 30 days from receipt of this order subject to pre-election conference
to be presided by the Labor Relations Division to discuss/thresh out the mechanics of
election.
10
Id. at 219-220.
11
Id. at 226.
12
Id. at 226-227. The decretal portion stated:
WHEREFORE, without necessarily resolving the merits of the appeal and considering the
urgency of the issues raised by [the Aliazas faction] and the limited time x x x the motion is
hereby GRANTED. Consequently, [the Bañez faction] and/or the members of the
DLSUEACOMELEC x x x are hereby directed to cease and desist from conducting the x x x
election of DLSUEA officers on July 9, 2001 until further orders from this office.
13
Id. at 227.
14
Id. at 241-246.
15
Id. at 416.
Id. at 345-346; Minutes of the Election of Officers at the De La Salle University Employees
16
Association with Case No. NCR-OD-0005-006-LRD on August 28, 2003.

17
Id. at 124; Resolution issued by Regional Director Ciriaco N. Lagunzad.
18
Rollo (G.R. No. 168477), pp. 46-47.
19
Records, p. 26.
Id. at 24; Letter dated August 2001 of DLSU Executive Vice President (EVP), Dr. Carmelita
20
L. Quebengco, to the Bañez faction.
Rollo (G.R. No. 169254), pp. 230-231; docketed as NLRC NCR South Sector Case No. 30-
21
08-03757-01.
22
Docketed as NCMB-NCR-NS-03-093-02.
23
Rollo (G.R. No. 169254), pp. 247-258.
24
Id. at 533.
25
Id. at 534.
Contra note 15, May 16, 2003 memorandum of BLR Director Cacdac regarding the effect of
26
the March 19, 2001 order of the BLR.
27
Rollo (G.R. No. 169254), p. 121; docketed as NCMB-NCR-NS-08-246-03.
28
Id. at 147-162.
LABOR CODE, Article 263. Strikes, Picketing and Lockouts. – x x x (g) When, in his
29
opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
same.
30
Rollo (G.R. No. 169254), pp. 260-270.
Id. at 288-291; Resolution dated June 26, 2003. Penned by Presiding Commissioner Raul
31
T. Aquino and concurred in by Commissioners Victoriano R. Calaycay and Angelita A.

Gacutan.
32
Id. at 409-410.
33
Rollo (G.R. No. 168477), pp. 101-110.
Labor Code, Article 248. Unfair labor practices of employers. – It shall be unlawful for an
34
employer to commit any of the following unfair labor practice:
xxxx
(g) To violate the duty to bargain collectively as prescribed by this Code.
xxxx
Article 252. Meaning of Duty to Bargain Collectively. The duty to bargain collectively means
good faith for the purpose of negotiating an agreement with respect to wages, hours of work
grievances or questions arising under such agreement and executing a contract under such
agreements of requested by either party but such duty does not compel any party to agree to
a proposal or to make any concessions.
35
This should refer to the May 16, 2003 memorandum of BLR Director Cacdac.
36
Rollo (G.R. No. 168477), pp. 106-110.
37
Rollo (G.R. No. 169254), pp. 535-536.
38
Id. at 537-538.
39
Id. at 135-136.
40
Id. at 147-162.
41
Id. at 123-125.
42
Id. at 385; letter and acknowledgment receipt dated November 28, 2008.
43
Id. at 53-54.
44
Id. at 75.
Rollo (G.R. No. 168477), pp. 44-55; penned by Associate Justice Rosmari D. Carandang
45
with Associate Justices Remedios Salazar-Fernando and Monina Arevalo-Zenarosa,

concurring.
46
Id. at 57-58.
47
Rollo (G.R. No. 169254), pp. 3-44 and rollo (G.R. No. 168477), pp. 3-43.
48
Rollo (G.R. No. 168477), p. 526.
49
Id. at 550.
50
Id. at 553.
51
See Alcantara v. Ponce, 514 Phil. 222, 244-245 (2005).
Padillo v. Court of Appeals, 422 Phil. 334, 351-352 (2001); See also Banco de Oro-EPCI,

52
Inc. v. Tansipek, G.R. No. 181235, July 22, 2009, 593 SCRA 456, 464.
De La Salle University v. De La Salle University Employees Association (DLSUEA-

53
NAFTEU), G.R. No. 177283, April 7, 2009, 584 SCRA 592.
See Colegio de San Juan de Letran v. Association of Employees and Faculty of

54
Letran, 394 Phil. 936, 949 (2000); Rural Bank of Alaminos Employees Union v. National
Labor Relations Commission, 376 Phil. 18, 27-28 (1999).
FIRST DIVISION
G.R. No. 141471 September 18, 2000
COLEGIO DE SAN JUAN DE LETRAN, petitioner,

vs.
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR
AMBAS, respondents.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals,
promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran
(hereinafter, "petitioner") and affirming the Order of the Secretary of Labor, dated December 2, 1996,
finding the petitioner guilty of unfair labor practice on two (2) counts.
The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:
"On December 1992, Salvador Abtria, then President of respondent union, Association of
Employees and Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement
with petitioner Colegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year
lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private
respondent Eleanor Ambas emerged as the newly elected President (Secretary of Labor and
Employment's Order dated December 2, 1996, p. 12).
Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao,
claimed that the CBA was already prepared for signing by the parties. The parties submitted the
disputed CBA to a referendum by the union members, who eventually rejected the said CBA (Ibid, p.
2).
Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations
Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However,
the Labor Arbiter's decision was reversed on appeal before the NLRC (Ibid, p. 2).
On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its
intention to strike on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to
delete the name of Atty. Federico Leynes as the union's legal counsel; and (2) refusal to bargain
(Ibid, p. 1).
On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a
new five-year CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to
petitioner, which notified the union six days later or on February 13, 1996 that the same had been
submitted to its Board of Trustees. In the meantime, Ambas was informed through a letter dated
February 15, 1996 from her superior that her work schedule was being changed from Monday to
Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to
a grievance machinery under the old CBA (Ibid, p. 2-3).
Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on
March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29,
1996, the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the
union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 2-3).
On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation.
However, petitioner stopped the negotiations after it purportedly received information that a new
group of employees had filed a petition for certification election (Ibid, p. 3).
On June 18, 1996, the union finally struck. On July 2, 1996, public 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 under the same terms and
conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The
parties then submitted their pleadings including their position papers which were filed on July 17,
1996 ( Ibid, pp. 2-3).
On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor
practice on two counts and directing the reinstatement of private respondent Ambas with
backwages. Petitioner filed a motion for reconsideration which was denied in an Order dated May
29, 1997 (Petition, pp. 8-9)."
1
Having been denied its motion for reconsideration, petitioner sought a review of the order of the
Secretary of Labor and Employment before the Court of Appeals. The appellate court dismissed the
petition and affirmed the findings of the Secretary of Labor and Employment. The dispositive portion
of the decision of the Court of Appeals sets forth:
WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit
in fact and in law.
With cost to petitioner.
SO ORDERED. 2
Hence, petitioner comes to this Court for redress.
Petitioner ascribes the following errors to the Court of Appeals:
I
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND
EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO
BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE
BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE THE FACT THAT
THE SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING
OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED
TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT.
II
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND
EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR
PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER
DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER
REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE. 3
The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair
labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing
negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition
for certification has been filed by another legitimate labor organization? (2) whether the termination
of the union president amounts to an interference of the employees' right to self-organization?
The petition is without merit.
After a thorough review of the records of the case, this Court finds that petitioner has not shown any
compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of
the Secretary of Labor and Employment. It is axiomatic that the findings of fact of the Court of
Appeals are conclusive and binding on the Supreme Court and will not be reviewed or disturbed on
appeal. In this case, the petitioner failed to show any extraordinary circumstance justifying a
departure from this established doctrine.
As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to
bargain collectively," as follows:
Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect to wages, hours of work and all other terms
and conditions of employment including proposals for adjusting any grievances or questions arising
under such agreement and executing a contract incorporating such agreements if requested by
either party but such duty does not compel any party to agree to a proposal or to make any
concession.
Noteworthy in the above definition is the requirement on both parties of the performance of the
negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran
(AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to
petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to
prevent the negotiation.
Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely
reply to the proposals presented by the latter. More than a month after the proposals were submitted
by the union, petitioner still had not made any counter-proposals. This inaction on the part of
petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could
only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter
as its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor Code
governing the procedure in collective bargaining, to wit:
Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in
collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other
party with a statement of its proposals. The other party shall make a reply thereto not later than ten
(10) calendar days from receipt of such notice. 4
xxx
As we have held in the case of Kiok Loy vs. NLRC, the company's refusal to make counter-proposal
5
to the union's proposed CBA is an indication of its bad faith. Where the employer did not even bother
to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to
bargain collectively. In the case at bar, petitioner's actuation show a lack of sincere desire to
6
negotiate rendering it guilty of unfair labor practice.
Moreover, the series of events that transpired after the filing of the first notice of strike in January
1996 show petitioner's resort to delaying tactics to ensure that negotiation would not push through.
Thus, on February 15, 1996, or barely a few days after the union proposals for the new CBA were
submitted, the union president was informed by her superior that her work schedule was being
changed from Mondays to Fridays to Tuesdays to Saturdays. A request from the union president
that the issue be submitted to a grievance machinery was subsequently denied. Thereafter, the
petitioner and the union met on March 27, 1996 to discuss the ground rules for negotiation.
However, just two days later, or on March 29, 1996, petitioner dismissed the union president for
alleged insubordination. In its final attempt to thwart the bargaining process, petitioner suspended
the negotiation on the ground that it allegedly received information that a new group of employees
called the Association of Concerned Employees of Colegio (ACEC) had filed a petition for
certification election. Clearly, petitioner tried to evade its duty to bargain collectively.
Petitioner, however, argues that since it has already submitted the union's proposals to the Board of
Trustees and that a series of conferences had already been undertaken to discuss the ground rules
for negotiation such should already be considered as acts indicative of its intention to bargain. As
pointed out earlier, the evidence on record belie the assertions of petitioner.
Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the
petition for certification election the issue on majority representation of the employees has arose.
According to petitioner, the authority of the union to negotiate on behalf of the employees was
challenged when a rival union filed a petition for certification election. Citing the case of Lakas Ng
Manggagawang Makabayan v. Marcelo Enterprises, petitioner asserts that in view of the pendency
7
of the petition for certification election, it had no duty to bargain collectively with the union.
We disagree. In order to allow the employer to validly suspend the bargaining process there must be
a valid petition for certification election raising a legitimate representation issue. Hence, the mere
filing of a petition for certification election does not ipso facto justify the suspension of negotiation by
the employer. The petition must first comply with the provisions of the Labor Code and its
Implementing Rules. Foremost is that a petition for certification election must be filed during the
sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus
Rules Implementing the Labor Code, provides that: " .… If a collective bargaining agreement has
been duly registered in accordance with Article 231 of the Code, a petition for certification election or
a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of
such agreement." The rule is based on Article 232, in relation to Articles 253, 253-A and 256 of the
8
Labor Code. No petition for certification election for any representation issue may be filed after the
lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is
that despite the lapse of the formal effectivity of the CBA the law still considers the same as
continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract
9
bar rule still applies. The purpose is to ensure stability in the relationship of the workers and the
10
company by preventing frequent modifications of any CBA earlier entered into by them in good faith
and for the stipulated original period. 11
In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for
1âwphi1
certification election by ACEC, allegedly a legitimate labor organization, was filed with the
Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed
outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid
and existing collective bargaining agreement. Consequently, there is no legitimate representation
issue and, as such, the filing of the petition for certification election did not constitute a bar to the
ongoing negotiation. Reliance, therefore, by petitioner of the ruling in Lakas Ng Manggagawang
Makabayan v. Marcelo Enterprises is misplaced since that case involved a legitimate representation
12
issue which is not present in the case at bar.
Significantly, the same petition for certification election was dismissed by the Secretary of Labor on
October 25, 1996. The dismissal was upheld by this Court in a Resolution, dated April 21, 1997.
1âwphi1
13
In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern
refusal to bargain in good faith with respondent union.
Concerning the issue on the validity of the termination of the union president, we hold that the
dismissal was effected in violation of the employees' right to self-organization.
To justify the dismissal, petitioner asserts that the union president was terminated for cause,
allegedly for insubordination for her failure to comply with the new working schedule assigned to her,
and pursuant to its managerial prerogative to discipline and/or dismiss its employees. While we
recognize the right of the employer to terminate the services of an employee for a just or authorized
cause, nevertheless, the dismissal of employees must be made within the parameters of law and
pursuant to the tenets of equity and fair play. The employer's right to terminate the services of an
14
employee for just or authorized cause must be exercised in good faith. More importantly, it must not
15
amount to interfering with, restraining or coercing employees in the exercise of their right to self-
organization because it would amount to, as in this case, unlawful labor practice under Article 248 of
the Labor Code.
The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was
dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the
bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten
(10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10)
years her working schedule was from Monday to Friday. However, things began to change when she
was elected as union president and when she started negotiating for a new CBA. Thus, it was when
she was the union president and during the period of tense and difficult negotiations when her work
schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge,
although her schedule was changed, she was outrightly dismissed for alleged insubordination. We 16
quote with approval the following findings of the Secretary of Labor on this matter, to wit:
"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid
ground to teminate her employment. The disputed management action was directly connected with
Ms. Ambas' determination to change the complexion of the CBA. As a matter of fact, Ms. Ambas'
unflinching position in faithfully and truthfully carrying out her duties and responsibilities to her Union
and its members in getting a fair share of the fruits of their collective endeavors was the proximate
cause for her dismissal, the charge of insubordination being merely a ploy to give a color of legality
to the contemplated management action to dismiss her. Thus, the dismissal of Ms. Ambas was
heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the
members' right to self-organization.
Admittedly, management has the prerogative to discipline its employees for insubordination. But
when the exercise of such management right tends to interfere with the employees' right to self-
organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms.
Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College
that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely
a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of
the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When
management refused to treat the charge of insubordination as a grievance within the scope of the
Grievance Machinery, the action of the College in finally dismissing her from the service became
arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process." 17
In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the
findings of the Secretary of Labor and Employment. The right to self-organization of employees must
not be interfered with by the employer on the pretext of exercising management prerogative of
disciplining its employees. In this case, the totality of conduct of the employer shows an evident
attempt to restrain the employees from fully exercising their rights under the law. This cannot be
done under the Labor Code.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, and Pardo, JJ., concur.

Ynares-Santiago, J., on leave.
Footnotes
Rollo, pp. 32-34.

1
Id., at 37-38.
2
Id., at 16.
3
Underscoring supplied.
4
141 SCRA 179, 186 (1986).
5
The Bradman Co., Inc. vs. Court of Industrial Relations, 78 SCRA 10, 15 (1977).
6
118 SCRA 422 (1982).

7
Article 232. Prohibition on Certification Election. -- The Bureau shall not entertain any
8
petition for certification election or any other action which may disturb the administration of
duly registered existing collective bargaining agreements affecting the parties except under
Articles 253, 253-A and 256 of this Code.
Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confesor, 241 SCRA 294, 307
9
(1995).
National Congress of Unions in the Sugar Industry of the Philippines vs. Ferrer-Calleja, 205

10
SCRA 478, 485 (1992).
11
Ibid.
12
Supra; note 6.
G.R. No 128483, Association of Concerned Employees of Colegio (ACEC) vs. Secretary of

13
Labor and Employment, et al.
14
Philippine Singapore Transport Services, Inc. vs. NLRC, 277 SCRA 506, 512 (1997).
15
Samar II Electric Cooperative, Inc. vs. NLRC, 270 SCRA 290, 295 (1997).
16
Rollo, p. 45.
17
Id., at 46.
SECOND DIVISION
March 06, 2019
G.R. No. 200487
BIGG’S INC., Petitioner
vs.
JAY BONCACAS, THELMA DIVINA, ALLAN DY, CHARVIE NEO, RICHARD SABATER,
ARACELI ENRIQUEZ, MA. REBECCASANJOSE,ALFREDO ODIAMAR, JR., MICHAEL MAPA,
DANTE BAYTA, GLEN REBUSI, RACHELLE MEA, ALBERT TINASAS, WILHELMN
JARDINERO," JUN LADABAN, ARLENE CO1\1IA, AND PURA SABATER, Respondents
G.R. No. 200636

JUNNIE ARINES,[ ] MARY JEAN SAN JUAN-REPUESTO, REYNALDO LIRIA, EMMANUEL STA.
*
ROSA, MENANDRO[ ] RAMOS, ARNOLD SARTE, SHEILA RAYMUNDO-PONTE, MARILYN

*
JANA, MARIANO AYCARDO, ROSENDO CHICA, JOCELYN AYCARDO, JAY ARINES,

ANTONIO MONSALVE, JOSELITO ENRIQUEZ, SEGUNDINO CHICA, WINCESLAO LIRAG, LINA
BARTOLOME-ODIAMAR, ANA MARIE FRANCISCO-SATUR, CARMEN TEJERO-BAYTA,
NORBERTO PASANO, AND HEIRS OF EDWIN AYCARDO, REPRESENTED BY MARIA JOSEFA
P. AYCARDO, Petitioners
vs.
BIGG'S INCORPORATED, ARLENE ACABADO, TERESITA AREJOLA, TERESA BUENAFLOR,
CONSUELO BI CHARA, and MARI CAR MANJON, Respondents
DECISION
CAGUIOA, J.:
Before the Court are consolidated petitions for review on certiorari under Rule 45 of the Rules of
1
Court assailing the Decision dated June 10, 2011 and Amended Decision dated January 20, 2012
2 3
of the Court of Appeals (CA) in CA-G.R. SP No. 78149.
The Facts
The facts, as summarized from the records, are narrated below.
Bigg's, Inc. (Bigg's) was the employer of Jay Boncacas (Boncacas), Junnie Arines, Mary Jean San
Juan-Repuesto, Meynardo Ramos, Sheila Raymundo-Ponte, Mariano Aycardo, Jay Arines,
Segundino Chica, Ana Marie Francisco-Satur, and Maria Josefa R. Aycardo (collectively, union
members). They are represented by their union president Boncacas. Bigg's is represented by Arlene
Acabado (Acabado) and Teresita Arejola (Arejola) who were the personnel officer and general
manager, respectively, of Bigg's at the time of filing of the petitions.
Bigg's operates a chain of restaurants with principal place of business in Naga City, Camarines Sur.
Its employees formed a labor union named Bigg's Employees Union (union) which was issued a
Certificate of Registration by the Department of Employment (DOLE) on January 30, 1996.
Both parties have contrasting versions of the incidents leading to the conflict between the Bigg's
management and the union members.
Bigg's alleges that on February 16, 1996, around 50 union members staged an illegal "sit-down
strike" in Bigg's restaurant. The union did not comply with the requirements of sending Notice of
Strike to the National Conciliation and Mediation Board (NCMB). Neither did the union obtain the
"strike vote" from its members. According to Bigg's, the union belatedly filed a Notice of Strike with
the NCMB on the same day to conceal the illegality of the sit-down strike. Bigg's issued a
memorandum to the striking union members placing them under preventive suspension and
requiring them to explain their actions within 24 hours from notice. The union members did not
comply with the company's order. Thus, they were sent employment termination letters on February
19, 1996.4
On the other hand, the union members accuse Bigg's of interfering with union activities. Allegedly, in
February 1996, union members were asked to withdraw their membership under threat of losing
their employment. In the same month, employees Mariano Aycardo and Marilyn Jana were
dismissed from service purportedly due to their union membership. On February 16, 1996, the day of
the alleged sit-down strike, union president Boncacas and other union members were prevented
from entering the premises of Bigg's. On the same day, they filed a Notice of Strike with the NCMB.
They attempted to return to work on February 17, 1996, but they were informed to obtain their
respective memoranda from the main office in Naga City. The memoranda informed them of their
suspension from work for participating in a sit-down strike. Some union members tried to talk with
the Bigg's management, but they were told not to report for work the next day. 5
The union members filed a complaint before the NCMB for unfair labor practices, illegal dismissal,
and damages, docketed as Sub RAB Case No. 05-03-00037-96. Bigg's also filed a complaint before
the NCMB for illegal strike against the union members docketed as Sub RAB Case No. 05-03-
00034-96. The two complaints were consolidated and the NCMB conducted mediation proceedings.
When mediation reached an impasse, the union conducted another strike on March 5, 1996. 6
Bigg's further alleges that during the strike on March 5, 1996, the union members were disruptive
and violent. They prevented ingress and egress of employees and customers to and from the
company's premises. They also stopped Bigg's vans from making deliveries by throwing stones at
the vans which caused injury to the driver as well as damage to vehicles and to the guardhouse.
They shouted at customers using megaphones to prevent them from going to Bigg's Diner. The
strike was later stopped when both parties agreed to compulsory arbitration. 7
Findings of the labor tribunals
After several conferences and hearings, and upon the filing of the parties' respective position papers
and memoranda, Labor Arbiter Rolando L. Bobis (LA) issued a Joint Decision dated January 31,
8
2000.
The LA first noted that some union members manifested that they entered into a settlement with
Bigg's and executed Quitclaims and Releases. The LA also found that there were union members
9
who were contractual employees whose contracts with Bigg's had ended prior to the
controversy. Thus, said employees were removed as parties.
10
On the issue of the illegality of the strikes, the LA ruled in favor of Bigg's. Under the provisions of
Articles 263 of the Labor Code and its implementing rules, for a strike to enjoy the protection of law,
the union must observe the following procedural requirements:
1. A notice of strike with the required contents should be filed with the [DOLE], specifically the
regional branch of the [NCMB], copy furnished the employer;
2. A cooling-off period must be observed, i.e., a time gap is required to cool off tempers between the
filing of the notice and the actual execution of the strike;
3. During the cooling-off period, the NCMB mediates and conciliates the parties. They are not
allowed to do any act that may disrupt or impede the early settlement of the dispute;
4. Before a strike may actually be started, a strike vote should be taken by secret balloting, with 24-
hour prior notice to NCMB;
5. The result of the strike vote should be reported to the NCMB at least seven (7) days before the
intended strike or lockout, subject to the cooling off period.
11
Thus, the LA ruled that the first strike conducted by the union members on February 16, 1996 was
illegal for failure to comply with the above requirements. The union did not furnish Bigg's a Notice of
Strike and did not observe the cooling-off period. 12
The second strike conducted on March 5, 1996, was likewise held illegal by the LA. Although the
union complied with the procedural requirements to conduct a valid strike, the union members
performed prohibited acts which rendered the strike illegal, such as acts of violence, aggression, and
obstruction of the free ingress and egress from company premises. The LA found that union
members prevented the ingress and egress of Bigg's delivery vans by forming human barricades
and throwing stones at the vans, as well as putting big rocks along the road. It was also established
that union members were using megaphones to discourage customers from going to Bigg's, causing
fear and fright to its customers.13
As to the issue of illegal dismissal, the LA ruled that the dismissal from employment of the union
officers, Boncacas (president), Rey Liria (Liria) (vice president), Jean San Juan (San Juan)
(treasurer), and Junnie Arines (Arines) (secretary) was valid as it was proven that they instigated
14
and participated in the illegal strikes based on Article 279 (formerly Article 264) (a) of the Labor
15
Code. 16
While the dismissal of the union officers Boncacas, Liria, San Juan, and Arines was held valid, as to
the union members, the LA held that there was no evidence that they knowingly participated in the
illegal sit-down strike on February 16, 1996 or that they committed illegal acts during the March 5,
1996 strike. Thus, Bigg's was ordered to reinstate the following employees to their former positions:
1. Alfredo Odiamar, Jr. 9. Jun Ladaban

2. Albert Tinasas 10. Ma. Rebecca San Jose
3. Araceli Enriquez 11. Michael Mapa
4. Arlene Comia 12. Michael Valenzuela
5. Dante Bayta 13. Pura Sabater
6. Egino Palmera 14. Rachelle Mea
7. Glen Rebusi 15. Richard Sabater
8. Joseph A. Rull 16. Wilheim Jardenario
On the allegation of unfair labor practice and union busting, the LA held that the union members
were unable to prove the same with substantial evidence. The union members' prayer for moral and
exemplary damages was consequently denied. 17
On appeal, the NLRC reversed the LA Decision. In its Decision dated April 30, 2002 (NLRC's First
18
Decision), the NLRC ruled that the strike on February 16,1996 was valid because it was grounded
on unfair labor practices committed by Bigg's. As such, the union members were not bound to wait
for 15 days from the filing of the Notice of Strike before staging the same. The NLRC also ruled that
there was no evidence to establish that the union members displayed violence, coercion, or
prevented the free ingress to and egress from Bigg's premises during the March 5, 1996 strike. The
dispositive portion of the NLRC's First Decision reads:
WHEREFORE, the assailed Decision of January 31, 2000 is REVERSED AND SET ASIDE.
Accordingly, respondent-appellee BIGG's is hereby directed to immediately reinstate complainants-
appellants to their former positions without loss of seniority rights and to pay them full backwages up
to actual reinstatement, damages, of P 100,000.00 each and attorney's fee of 10%. 19
However, on motion for reconsideration (MR), the NLRC reversed its own ruling and reinstated the
LA Decision in its Decision dated October 22, 2002 (NLRC's Amended Decision). The NLRC
declared that there were material points which it had unintentionally missed in its First Decision.20
The NLRC held that the two strikes staged by the union were illegal. As to the February 16, 1996
strike, there was no notice of strike filed with the NCMB. More significantly, the union had not yet
1awp++i1
been qualified as the certified bargaining agent of Bigg's employees. Thus, it could not, as a matter
of right, stage a strike. The NLRC also held that there was no conclusive proof of union busting or
unfair labor practice.
21
Regarding the March 5, 1996 strike, the NLRC held that audio-video footage was presented showing
the acts of violence, aggression, and prevention of ingress to and egress from the premises of
Bigg's. As well, during the hearings before the LA, counsel for the union members stated that he was
not contesting the allegation that some of the union members had attempted to block the passage of
Bigg's delivery vans.22
The dispositive portion of the NLRC's Amended Decision reads:
WHEREFORE, prescinding from the foregoing considerations, Our assailed decision of April 30,
2011 is hereby SET ASIDE and the Decision of the Labor Arbiter is hereby REINSTATED. This is,
however, without prejudice to those employees/complainants who have already opted to be
separated by receiving their respective separation benefits. 23
Both parties elevated the case to the CA. In its Decision dated June 10, 2011, the CA partially
24
granted the union's appeal.
The CA overturned the findings of the NLRC as to the finding of a sit-down strike on February 16,
1996. The CA held that Bigg's failed to adduce substantial evidence showing that the union
conducted a sit-down strike on February 16, 1996. Only one representative of Bigg's, Carmen
Manjon (corporate officer of Bigg's), attested that the union members conducted a sit-down strike.
Bigg's did not even bother to present corroborative evidence to substantiate the allegation. 25
On the other hand, the union clearly established that some of its members were barred from entering
the premises or threatened with dismissal by reason of their union membership. This, said the CA,
was a clear manifestation of unfair labor practice.
26
With respect to the March 5, 1996 strike, the Court ruled that it was illegal for having been conducted
with violence and aggression. However, the CA clarified that a strike need not always be declared by
the duly certified bargaining representative. The implementing rules of the Labor Code recognize the
power of a legitimate labor organization to conduct a strike in the absence of a certified or duly
recognized bargaining representative, provided that the reason therefor is unfair labor practice. The
CA held that a legitimate labor organization may take direct action and forego the usual procedural
requirements if the raison d'etre is unfair labor practice or dismissal of its members which constitutes
union busting.27
The CA further found that Bigg's was guilty of anti-unionism by preventing Boncacas and other union
members from entering the premises and firing other union members on the same day when they
opted to retain union membership. As of February 16, 1996, the union had been effectively busted.
Thus, the CA held that it was no longer necessary to file the requisite notice of strike.
28
Nonetheless, the CA held that indeed, the strike held on March 5, 1996 was illegal as it was marred
by violence and restraint on the free passage and use of property of Biggs. It was not disputed that
the union members formed a human barricade and prevented delivery vehicles from passing through
Bigg's gates. They also placed three big stones along the gate entrance to keep the vehicles from
exiting the premises and flung stones at another van while it was on its way out of the area.29
The dismissal of union officers Liria, San Juan, and Arines was upheld by the CA for their illegal acts
during the strike. However, the CA exonerated union president Boncacas as it was not shown that
he initiated or participated in any of the illegal acts that characterized the strike as shown in the
video evidence of the strike. 30
The CA also held that Bigg's failed to prove that union members Maruja De Vera, Thelma Divina,
Allan Dy, Charvie Neo, Willy Oyarde, and Marlon Romero were contractual employees.
Thus, the C A ordered the reinstatement of the following union members with payment of
backwages:
1. Alfredo Odiamar, Jr. 13. Ma. Rebecca San Jose

2. Albert Tinasas 14. Marlon Romero
3. Allan Dy 15. Maruja De Vera
4. Araceli Enriquez 16. Michael Mapa
5. Arlene Comia 17. Michael Valenzuela
6. Charvie Neo 18. Pura Sabater
7. Dante Bayta 19. Rachelle Mea
8. Egino Palmera 20. Richard Sabater
9. Glen Rebusi 21. Thelma Divina
10. Jay Boncacas 22. Wilheim Jardenario
11. Joseph A. Rull 23. Willy Oyarde
12. Jun Ladaban
Both parties filed their respective MRs. 31
The union argued that union members Menandro Ramos, Lina Bartolome, Carmen Tejero, Sheila
Raymundo, and Gregorio Come should also be reinstated and their names were just inadvertently
32
omitted from the LA Decision. 33
For its part, Bigg's alleged that Michael Mapa, Rachelle Mea, Richard Sabater, Albert Tinasas,
Alfredo Odiamar, Jr., Dante Bayta, and Glen Rebusi should be excluded in the award as they had
already entered into a settlement with Bigg's and signed Quitclaims and Releases. Meanwhile,
Maruja De Vera, Willie Oyarde, Marlon Romero, Michael Valenzuela, Egino Palmar, and Joseph Rull
should be excluded as well because they were no longer listed as petitioners in the union's petition
before the CA. 34
The CA promulgated an Amended Decision on January 20, 2012. On the matter of the union's
35
assertion that some union members' names had been omitted, the CA held that the exclusion of said
names from the LA Decision was not unintentional as they were found to have participated in the
illegal strike and as such, ineligible for reinstatement.
On the issue of the Compromise Agreement executed by Michael Mapa, Rachelle Mea, Joseph
36
Rull, Richard Sabater, Araceli Enriquez, Albert Tinasas, Alfredo Odiamar, Jr., Dante Bayta, and Glen
Rebusi, the CA held that the same was vague as it merely indicated the payment received by the
employees without any indication of whether it constituted backwages or separation pay. Neither did
it state that the said employees waived their right to reinstatement if so decided by the court. The
document also stated that "this agreement shall be without prejudice to the case [titled Biggs,
Incorporated v. Bigg's Employees Union], Sub RAB Case No. 05-03-00034-96 and [the case
titled, Jay Boncacas et al. v. Biggs, Inc. et al.], Sub RAB Case No. 05-00037-96 now pending before
the [NLRC]." Thus, there was no relinquishment of the employees' rights to pursue their case in spite
of the agreement.
However, the CA held that it had not acquired jurisdiction over Maruja De Vera, Willie Oyarde,
Marlon Romero, Michael Valenzuela, Egino Palmar, and Joseph Rull as they were not named as
petitioners in the CA. Thus, they could not lawfully claim any benefit from the decision rendered by
the CA. Only the following union members/employees remained entitled to the award:
1. Alfredo Odiamar, Jr. 10. Jun Ladaban

2. Albert Tinasas 11. Ma. Rebecca San Jose
3. Allan Dy 12. Michael Mapa
4. Araceli Enriquez 13. Pura Sabater
5. Arlene Comia 14. Rachelle Mea
6. Charvie Neo 15. Richard Sabater
7. Dante Bayta 16. Thelma Divina
8. Glen Rebusi 17. Wilheim J ardenario
9. Jay Boncacas
The Petitions
Both parties filed their respective petitions for review on certiorari before the Court. 37
At the outset, the Court notes that only the following persons joined in the petition for the union in
G.R. No. 200636 and signed the verification and certification of non-forum shopping: Jay Boncacas,
Junnie Arines, Menandro Ramos, Mariano Aycardo, Segundina Chica, Maria Josefa Aycardo, Mary
Jean San Juan, Sheila Raymundo, Jay Arines, and Ana Marie Francisco-Satur. Reynaldo Liria, Lina
Bartolome, and Rosendo Chica executed Special Powers of Attorney authorizing Jay Boncacas to
represent them in the case. 38
The union members maintain that the strike held on March 5, 1996 was not illegal. They did not
commit violence, coercion, or any other prohibited act during the said strike. 39
Granting arguendo that the March 5, 1996 strike was illegal, the union members contend that their
dismissal was still illegal because their employment had already been illegally terminated prior
thereto. Bigg's had sent them notices of termination on February 19, 1996. Thus, the commission of
any alleged prohibited acts during the March 5, 1996 strike cannot be used as a justification for their
illegal dismissal on February 19, 1996. The union members thus prayed that its union officers Liria,
San Juan, and Junie Arines should also be reinstated, with payment of backwages. 40
The union members pray for reinstatement of all petitioners without loss of seniority rights and
backwages. The union members also reiterate that union members Menandro Ramos, Lina
Bartolome, Carmen Tejero, Sheila Raymundo, and Gregorio Come should also be reinstated. They
were listed in the body of the LA Decision as entitled to reinstatement, but their names were omitted
from the dispositive portion without any explanation. There was also no mention in the LA Decision
of their purported participation in any illegal acts, contrary to the ruling of the CA. Additionally, the
union members pray for moral and exemplary damages each, and attorney's fees. 41
On the other hand, Bigg's, in its petition in G.R. No. 200487, alleges that the CA committed
reversible error in overturning the findings of the NLRC which had affirmed the findings of fact and
law of the LA, who had conducted hearings on the case. Bigg's argues that in a petition
for certiorari under Rule 65, it is not for the CA to review again the evidence of the parties. The CA's
purview is merely to determine if the NLRC committed grave abuse of discretion amounting to lack
or excess of jurisdiction in reaching its decision.
42
Bigg's also alleges that in reassessing the evidence of the parties, the CA misappreciated the facts
when it ruled that no strike was held on February 16, 1996 and gave credence to the union
members' testimonies that they were not allowed to enter Bigg's premises. Contrary to their
allegations, Bigg's claims that it was the employees who refused to perform their respective jobs
during the first shift of the day, such that the Bigg's management had to close its store at 10:00 a.m.
and request the second shift employees to come to work earlier. 43
Bigg's also maintains that union members Marilyn Jana, Jay Arines, Edwin Aycardo, Jocelyn
Aycardo, Mariano Aycardo, Rosendo Chica, Segundino Chica, Joselito Enriquez, Ana Marie
Francsico, Wenceslao Lirag, Antonio Monsalve, Eddie Nacario, Norberto Antonio Pasano, and
Arnold Sarte had already filed a manifestation with the LA that they had voluntarily accepted their
separation pay. 44
Granting for the sake of argument, that the union members are entitled to reimbursement, Bigg's
argues that they are not entitled to backwages because the strike that they conducted was illegal.
Bigg's avers that assuming without admitting that there was illegal dismissal, separation pay should
be awarded instead of reinstatement considering the long period of time that has already elapsed
form the time of dismissal.45
Issues
The issues for the Court's consideration are the following:
1. Whether the strikes held on February 16, 1996 and March 5, 1996 were illegal;
2. Whether the union officers and employees were validly dismissed; and,
3. The proper award and parties to the case.

Ruling
Petitions for review under Rule 45 are generally limited to questions of law as the Court is not a trier
of facts. However, in exceptional cases, such as when there are conflicting findings of facts of the
courts or tribunals below, the Courts may reevaluate and review the facts of a case. In this case,
46
the Court deems a review of the facts necessary in view of the inconsistent and contrary findings of
the CA and the labor tribunals.
Requirements of a valid strike
As defined under Article 219 (formerly Article 212) (o) of the Labor Code, a strike means any
temporary stoppage of work by the concerted action of employees as a result of an industrial or
labor dispute.
Under Article 278 (formerly Article 263) of the Labor Code, there are different procedural
requirements depending on the ground of the strike:
(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of lockout with the Ministry at least 30 days before
the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and
in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by
any legitimate labor organization in behalf of its members. However, in case of dismissal from
employment of union officers duly elected in accordance with the union constitution and by-laws,
which may constitute union busting where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action immediately.
(d) The notice must be in accordance with such implementing rules and regulations as the Minister
of Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at mediation
and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse
of the requisite number of days from the mandatory filing of the notice, the labor union may strike or
the employer may declare a lockout.
(f) A decision to declare a strike must be approved by a majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose.
A decision to declare a lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting
called for that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was taken. The Ministry
may, at its own initiative or upon the request of any affected party, supervise the conduct of the
secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the
voting at least seven days before the intended strike or lockout, subject to the cooling-off period
herein provided.
This provision was further implemented by Department Order (DO) Order No. 40-03, Amending the
Implementing Rules of Book V of the Labor Code of the Philippines (IRR) and DO 40-A-03 which 47
amended Section 5, Rule XXII of the IRR.
The Labor Code and the IRR limit the grounds for a valid strike to: (1) a bargaining deadlock in the
course of collective bargaining, or (2) the conduct of unfair labor practices by the employer. 48
Only a certified or duly recognized bargaining representative may declare a strike in case of a
bargaining deadlock. However, in cases of unfair labor practices, the strike may be declared by any
legitimate labor organization.
49
In both instances, the union must conduct a "strike vote" which requires that the actual strike is
approved by majority of the total union membership in the bargaining unit concerned. The union is
required to notify the regional branch of the NCMB of the conduct of the strike vote at least 24 hours
before the conduct of the voting. Thereafter, the union must furnish the NCMB with the results of the
voting at least seven days before the intended strike or lockout. This seven-day period has been
50
referred to as the "seven-day strike ban" or "seven-day waiting period."

51 52
In Lapanday Workers Union v. National Labor Relations Commission, the Court reasoned that the
53
period is intended to give the NCMB an opportunity to verify whether the projected strike really
carries the imprimatur of the majority of the union members. In a strike due to bargaining deadlocks,
54
the union must file a notice of strike or lockout with the regional branch of the NCMB at least 30 days
before the intended date of the strike and serve a copy of the notice on the employer. This is the so-
called "cooling-off period" when the parties may enter into compromise agreements to prevent the
strike. In case of unfair labor practice, the period of notice is shortened to 15 days; in case of union
busting, the "cooling-off period" does not apply and the union may immediately conduct the strike
after the strike vote and after submitting the results thereof to the regional arbitration branch of the
NCMB at least seven days before the intended strike. 55
Thus, in a strike grounded on unfair labor practice, the following are the requirements: (1) the strike
may be declared by the duly certified bargaining agent or legitimate labor organization; (2) the
conduct of the strike vote in accordance with the notice and reportorial requirements to the NCMB
and subject to the seven-day waiting period; (3) notice of strike filed with the NCMB and copy
furnished to the employer, subject to the 15-day cooling-off period. In cases of union busting, the 15-
day cooling-off period shall not apply.
The union conducted an illegal sit-down strike on February 16, 1996
With regard to the first strike conducted by the union members on February 16, 1996 (first strike),
the Court holds that the CA committed reversible error in overturning the findings of the NLRC and
LA. The CA held that no substantial evidence was presented to prove that the union staged a "sit-
down strike" as only one representative from Bigg's attested to the fact. However, a review of the
records proves otherwise.
Several employees of Bigg's executed affidavits deposing that the union members conducted a sit-
down strike on February 16, 1996. Ireneo Sumpay, Jr. (Sumpay), security guard, attested that when
he arrived at Bigg's restaurant on said date at 6:00 a.m., the union members who were assigned on
the first shift refused to do their jobs and declared that they were on strike. Bigg's supervisor,
56
Evelyn Rectin (Rectin) affirmed Sumpay's statement. Rectin averred that on February 16, 1996, she
arrived for work at 6:30 a.m. and Sumpay immediately reported to her that some employees had
refused to work. Indeed, she saw that employees Jay Boncacas, Willy Oyarde, Jose Sonny Sio,
Rosendo Chico, Greg Come, Alfred Odiamar, Eddie Nacario, Marlon Romero, Glen Artuz, and Mano
Aycardo were just sitting. She mentioned that other employees were also just sitting on the second
floor of the restaurant. Rectin reported the matter to Bigg's Operations Officer, Teresita Arejola
(Arejola). The latter also corroborated the affidavits of Sumpay and Rectin. In her affidavit, Arejola
57
confirmed that she received a call from Rectin at around 6:00 a.m. informing her that the employees
of Bigg's were staging a sit-down strike. Arejola then reported the matter to corporate officers
Teresita Puenaflor and Carmen Manjon (Manjon). Arejola proceeded to Bigg's restaurant and saw
that the employees were not working. She ordered them to start their work but they still refused. At
around 10:00 a.m. of the same day, the striking employees left and did not return to work. During
58
the conference before the LA on November 11,1999, Manjon testified that she went to Bigg's
restaurant after receiving reports that there was a sit-down strike and upon arriving thereat, she saw
that employees were n performing their work. 59
The consistent and corroborative sworn declarations of Bigg's witnesses constitute substantial
evidence to prove that the union members committed a sit-down strike on February 16, 1996. The
quantum of proof necessary in labor cases is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. Thus, the CA
60
committed reversible error in overturning the findings of the NLRC and LA based on the CA's
incorrect finding that only one representative of Bigg's attested that there was a sit-down strike.
On this score, the Court reinstates and affirms the ruling of the NLRC, which had, for its part,
affirmed the findings of the LA that the union conducted an illegal sit-down strike on February 16,
1996, for failure of the union to comply with the pre-requisites for a valid strike.
The union did not file the requisite Notice of Strike and failed to observe the cooling-off period. In an
effort to legitimize the strike on February 16, 1996, the union filed a Notice of Strike on the same
day. This cannot be considered as compliance with the requirement, as the cooling-off period is
mandatory. The cooling-off period is not merely a period during which the union and the employer
must simply wait. The purpose of the cooling-off period is to allow the parties to negotiate and seek a
peaceful settlement of their dispute to prevent the actual conduct of the strike. In other words, there
must be genuine efforts to amicably resolve the dispute.
Moreover, the Court affirms the findings of the labor tribunals that the union failed to prove with
substantial evidence that Bigg's was guilty of unfair labor practice as defined under Article 259 of
61
the Labor Code to allow the union, a non-certified bargaining agent to initiate the strike. Likewise, the
union failed to prove that there was union busting to exempt compliance with the cooling-off period.
62
The union did not present any substantial evidence to prove its allegations that union members were
actually dismissed or threatened with dismissal for their union membership.
In fine, the union's failure to comply with the mandatory requirements rendered the strike on
February 16, 1996 illegal.
The strike on March 5, 1996 was illegal; dismissal of union president valid
The Court upholds the consistent and uniform findings of the CA, NLRC, and LA on the illegality of
the strike on March 5, 1996, despite the compliance with the procedural requirements of a valid
strike. It was established that the striking union members committed acts of violence, aggression,
vandalism, and blockage of the free passage to and from Bigg's premises.
While the law protects the right of workers to engage in concerted activities for the purpose of
collective bargaining or to seek redress for unfair labor practices, this right must be exercised in
accordance with the law. Article 279 (formerly 264) (e) of the Labor Code provides:
No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct
the free ingress to or egress from the employer's premises for lawful purposes, or obstruct public
thoroughfares.
Thus, in this matter, the CA correctly upheld the findings of the labor tribunals.
The Court, however, reverses the CA's findings that the union president Boncacas' dismissal was
invalid as he did not commit illegal acts during the March 5, 1996 strike. The Labor Code provides
for a stricter standard on union officers. Article 279 (formerly Article 264) (a) provides:
x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer
who knowingly participates in the commission of illegal acts during a strike may be declared to have
lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment, even if a replacement had been hired
by the employer during such lawful strike.
In Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa ng LGS, the Court 63
summarized the above rule accordingly:
We now come to the proper sanctions for the conduct of union officers in an illegal strike and for
union members who committed illegal acts during a strike. The above-cited Art. 264 of the Code
presents a substantial distinction of the consequences of an illegal strike between union officers and
mere members of the union. For union officers, knowingly participating in an illegal strike is a valid
ground for termination of their employment. But for union members who participated in a strike, their
employment may be terminated only if they committed prohibited and illegal acts during the strike
and there is substantial evidence or proof of their participation, i.e., that they are clearly identified to
have committed such prohibited and illegal acts. 64
Thus, for union members, what is required is that they knowing participated in the commission of
illegal acts during the strike for there to be sufficient ground for termination of employment. For
union officers, however, it suffices that they knowingly participated in an illegal strike.
It must be noted that Boncacas not only knowingly participated but was the one who principally
organized two illegal strikes on February 16, 1996 and March 5, 1996. Thus, the dismissal of
Boncacas and the other union officers after the illegal strike on February 16, 1996 as well as the
March 5, 1996 strike was valid. However, as to the union members who did not participate in any
prohibited act during the strikes, their dismissal was invalid.
The proper parties and applicability of the Decision
In their petition, the union members maintain that Menandro Ramos, Lina Bartolome, Carmen
Tejero, Sheila Raymundo, and Gregorio Come should also be reinstated as their names were
merely inadvertently omitted from the dispositive portion of the LA Decision. There was also no
finding in the LA Decision of their purported participation in any illegal act, contrary to the ruling of
the CA.
On this point, the Court finds for the union. Indeed, the LA Decision names the following union
officers as those who participated in the illegal strike on February 16, 1996 and March 5, 1996: Jay
Boncacas, Rey Liria, Jean San Juan, and Junnie Arines. The LA Decision also lists union member
65
Gregorio Come as a participant in the March 5, 1996 but did not state whether he knowingly
participated in the commission of prohibited acts during the strike. Neither did the LA declare that
Menandro Ramos, Lina Bartolome, Carmen Tejero, and Sheila Raymundo as having knowingly
participated in any illegal act during the March 5, 1996 strike. However, as pointed out by the union,
their names were omitted in the dispositive portion of the LA Decision without any explanation.
Absent any definite finding that said members willingly participated in any illegal act, they should
have been included in the award of reinstatement with backwages by the LA.
With regard to the Compromise Agreement executed by Michael Mapa, Rachelle Mea, Joseph Rull,
66
Richard Sabater, Araceli Enriquez, Albert Tinasas, Alfredo Odiamar, Jr., Dante Bayta, and Glen
Rebusi, the Court affirms the CA's Amended Decision. As held by the CA, the agreement is vague
as it was merely an acknowledgment of the receipt of funds. It did not indicate whether the same
constituted backwages or separation pay. More significantly, the Compromise Agreement explicitly
stated that "this agreement shall be without prejudice to the case [titled Biggs, Incorporated v. Bigg's
Employees Union], Sub RAB Case No. 05-03-00034-96 and [the case titled, Jay Boncacas et al. v.
Biggs, Inc. et al.], Sub RAB Case No. 05-03-00037-96 now pending before the [NLRC]." Thus, the
signatories thereto clearly reserved their right to pursue the instant cases.
The CA also correctly ruled that Bigg's failed to prove that union members Maruja De Vera, Thelma
Divina, Allan Dy, Charvie Neo, Willy Oyarde, and Marlon Romero were contractual employees. To
substantiate its claim, Bigg's merely submitted the memorandum addressed to said employees
67
informing them of the termination of their service contracts. Bigg's failed to submit the contracts
themselves, which would have supported its claim that said employees were contractual.
However, the Court also agrees with the CA's removal of the following names in its Amended
Decision: Maruja De Vera, Willie Oyarde, Marlon Romero, Michael Valenzuela, Egino Palmar, and
Joseph Rull. Their names were not included in the list of petitioners in the union's petition for
certiorar before the CA and neither were they signatories to the Verification and Certification of
68
Non-Forum Shopping. Thus, as it stands, the following persons should have been included in the
69
Amended CA Decision as regards its order of reinstatement:
1. Alfredo Odiamar, Jr. 12. Pura Sabater

2. Albert Tinasas 13. Rachelle Mea
3. Allan Dy 14. Richard Sabater
4. ' Araceli Enriquez 15. Thelma Divina
5. Arlene Comia 16. Wilheim Jardenario
6. Charvie Neo 17. Menandro Ramos
7. Dante Bayta 18. Lina Bartolome
8. Glen Rebusi 19. Carmen Tejero
9. Jun Ladaban 20. Sheila Raymundo
10. Ma. Rebecca San Jose 21. Gregorio Come
11. Michael Mapa
However, the Court notes that of the five union members omitted from the LA Decision, only Sheila
Raymundo and Menandro Ramos joined in the instant petition. Thus, the Decision of the Court shall
only apply as to them In Municipality of Orion v. Pereyra the Court held:
70
x x x [A] reversal as to parties appealing does not necessitate a reversal as to parties not appealing,
but that the judgment may be affirmed or left undisturbed as to them. An exception to the rule exists,
however, where a judgment cannot be reversed as to the party appealing without affecting the rights
of his co-debtor.
71
Thus, as Lina Bartolome, Carmen Tejero, and Gregorio Come no longer participated in the instant
petition, they are no longer parties and the Court cannot issue a judgment as to them.
Lastly, the Court deletes the award of backwages in conformity with jurisprudence that backwages
are not granted to dismissed employees who participated in an illegal strike even if they are later
reinstated. In Escario v. NLRC (Escario), the Court held:
72
Conformably with the long honored principle of a fair day's wage for a fair day's labor, employees
dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if
they are reinstated by virtue of their being merely members of the striking union who did not commit
any illegal act during the strike.
73
In Philippine Diamond Hotel & Resort, Inc. v. Manila Diamond Hotel Employees Union (Philippine
74
Diamond Hotel & Resort, Inc.), the Court laid down the exceptions to this rule:
Jurisprudential law, however, recognizes several exceptions to the "no backwages rule," to wit: when
the employees were illegally locked to thus compel them to stage a strike; when the employer is
guilty of the grossest form of ULP; when the employer committed discrimination in the rehiring of
strikers refusing to readmit those against whom there were pending criminal cases while admitting
non-strikers who were also criminally charged in court; or when the workers who staged a voluntary
ULP strike offered to return to work unconditionally but the employer refused to reinstate them. Not
any of these or analogous instances is, however, present in the instant case.
Respondent urges this Court to apply the exceptional rule enunciated in Philippine Marine Officers'
Guild v. Compañia Maritima and similar cases where the employees unconditionally offered to return
to work, it arguing that there was such an offer on its part to return to work but the Hotel screened
the returning strikers and refused to readmit those whom it found to have perpetrated prohibited acts
during the strike.
It must be stressed, however, that for the exception in Philippine Marine Officers' Guild to apply, it is
required that the strike must be legal. 75
None of the exceptions mentioned above is existing in these cases and, as found by the Court, both
strikes conducted by the union were illegal. Thus, the listed employees are not entitled to backwages
despite the CA's order of reinstatement.
Separation pay in lieu of reinstatement
In certain cases, separation pay is awarded in lieu of reinstatement. The circumstances were
enumerated in Escario:
x x x (a) when reinstatement can no longer be effected in view of the passage of a long period of
time or because of the realities of the situation; (b) reinstatement is inimical to the employer's
interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of
the parties involved; (e) the employer is prejudiced by the workers' continued employment; (f) facts
that make execution unjust or inequitable have supervened; or (g) strained relations between the
employer and employee. 76
As prayed for by Bigg's, considering that 23 years have passed since the dismissal of the union
members on February 19, 1996, and bearing in mind Bigg's manifestation that they could no longer
77
trust the striking employees especially as the company is in the food service industry, separation
78
pay may be more appropriate in lieu of reinstatement.
In Philippine Diamond Hotel & Resort, Inc., the Court made the following discussion:
Reinstatement without backwages of striking members of respondent who did not commit illegal acts
would thus suffice under the circumstances of the case. If reinstatement is no longer possible, given
the lapse of considerable time from the occurrence of the strike, the award of separation pay of one
(1) month salary for each year of service, in lieu of reinstatement, is in order.
79
Thus, the Court adopts the above disquisition in this case. Finally, the monetary award herein
granted shall earn legal interest of 12% per annum from February 19, 1996, the date of termination,
until June 30, 2013 in line with the Court's ruling in Nacar v. Gallery Frames and from July 1, 2013
80
until full satisfaction of the award, the interest rate shall be at 6%.
81
WHEREFORE, premises considered, the petitions in G.R. Nos. 200487 & 200636 are
PARTIALLY GRANTED. The Court further RESOLVES to MODIFY the assailed Decision dated
June 10, 2011 and Amended Decision dated January 20, 2012 of the Court of Appeals (CA) in CA-
G.R. SP No. 78149, accordingly:
1. DECLARE the strike of February 16, 1996 illegal;
2. DELETE the award of backwages;
3. GRANT separation pay in lieu of reinstatement at the rate of one (1) month pay for every year of
service from the time of dismissal on February 19, 1996 until the finality of this Decision;
4. INCLUDE MENANDRO RAMOS and SHEILA RAYMUNDO in the award. The complete list of
employees ENTITLED to the award follows:
a. Alfredo Odiamar, Jr. k. Michael Mapa

b. Albert Tinasas l. Pura Sabater
c. Allan Dy m. Rachelle Mea
d. Araceli Enriquez n. Richard Sabater
e. Arlene Comia o. Thelma Divina
f. Charvie Neo p. Wilheim Jardenario
g. Dante Bayta q. Menandro Ramos
h. Glen Rebusi r. Sheila Raymundo
i. Jun Ladaban
j. Ma. Rebecca San Jose
5. The monetary award shall earn legal interest of 12% per annum from February 19, 1996 until
June 30, 2013. From July 1, 2013 until full satisfaction of the award, the interest rate shall be at 6%.
6. REMAND THE CASE TO THE LABOR ARBITER FOR EXECUTION OF THE AWARD AND
COMPUTATION OF SEPARATION PAY.
SO ORDERED.
Carpio (Chairperson), J. Reyes, Jr., and Hernando,[ ], JJ., concur.

*
Perlas-Bernabe, J., on wellness leave.
Footnotes
*
Also referred to as "Wilheim Jardinerio" in some parts of the records.
**
Also referred to as "Junie Arines," and "Junnie Arenas" in some parts of the records.
**
Also referred to as "Meynandro" in some parts of the records.
*
Additional Member per S.O. No. 2630 dated December 18, 2018.
1
Rollo (G.R. No. 200487), pp. 8-27; rollo, (G.R. No. 200636), pp. 13-54.
Rollo (G.R. No. 200487), pp. 29-47; penned by Associate Justice Stephen C. Cruz with the
2
concurrence of Associate Justices Isaias P. Dicdican and Edwin D. Sorongon.
3
Id. at 50-55.
4
Id. at 33.
5
Id. at 31-32.
6
Id.
7
Supra note 4.
8
Id. at 72-93.
Namely, Andy Abellano, Juan Alvaro, Jr., Jay Arines, Glennen Artuz, Edwin Aycardo,
9
Jocelyn Aycardo, Mariano Aycardo, Romeo Batalla, Dante Capistrano, Rosendo Chica,
Segundino Chica, Gregorio Come, Joselito Enriquez, Ana Marie Francisco, Johnvy Huelgas,
Marilyn Jana, Wenceslao Lirag, Antonio Monsalve, Rogelio Murillo, Eddie Nacario, Daily F.
Nobleza, Norberto Pasano, Edgar Regalario, Arnold Sarte, Emmanuel Sta. Rosa, Jose
Sonny Sio, Elmer Solsona, Agosto Valenzuela, and Randy Valenzuela.
Namely, Maruja De Vera, Thelma Divina, Allan Dy, Charvie Neo, Willy Oyarde, and Marlon
10
Romero.
Rollo (G.R. No. 200487), pp. 83-84. See Grand Boulevard Hotel v. Genuine Labor
11
Organization of Workers in Hotel, Restaurant and Allied Industries, 454 Phil. 463, 487-488
(2003).
12
Rollo (G.R. No. 200487), p. 84.
Id.
13
The union members clarified in the petition they submitted to the Court of Appeals that Liria
14
was the union auditor (not vice president); Arines was the treasurer (not secretary); and that
San Juan had never been an officer in the union. Rollo, [G.R. No. 200636], p. 98.
Art. 279 [264] (a). x x x Any union officer who knowingly participates in an illegal strike and
15
any worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination
of his employment, even if a replacement had been hired by the employer during such lawful
strike.
Presidential Decree No. 442 (Amended and Renumbered), July 21, 2015.
16
Rollo (G.R. No. 200487), pp. 90-91.

17
Id. at 94-116; penned by Presiding Commissioner Raul T. Aquino, and concurred in by

18
Commissioners Victoriano R. Calaycay and Angelita A. Gacutan.
Id. at 115.
19
Id. at 117-134.
20
Id. at 132.
21
Id. at 124.
22
Id. at 134.
23
Id. at 29-47.
24
Id. at 37-38.
25
Id.
26
Id. at 41-42.
27
Id. at 42.
28
Id. at 43.
29
Id. at 44.
30
CA rollo, pp. 850-857; 881-892.

31
In the LA Decision, Gregorio Come is also listed as among those who had executed
32
Quitclaims and voluntarily accepted their separation pay. See LA Decision, rollo (G.R. No.
200487), pp. 81.
See CA Amended Decision, id. at 51.
33
Id. at 52.
34
Id. at 50-55.
35

36
Rollo (G.R. No. 200487), pp. 8-27; rollo (G.R. No. 200636), pp. 13-54.

37
Rollo (G.R. No. 200363), pp. 615, 619 and 622.

38
Id. at 39.
39
Id. at 40-41.
40
Id. at 47-48.
41
Rollo (G.R. No. 200487), p. 12.

42
Id. at 227, 231.

43
Id. at 19.
44
Id. at 23.
45
Pascual v. Burgos, 776 Phil. 167, 182 (2016).

46
Amending Section 5, Rule XXII of the Implementing Rules of Book V of the Labor Code of
47
the Philippines (March 12, 2003).
Section 5. Grounds for strike or lockout. — A strike or lockout may be declared in cases of
48
bargaining deadlocks and unfair labor practices. Violations of collective bargaining

agreements, except flagrant and/or malicious refusal to comply with its economic provisions,
shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout
may be declared on grounds involving inter-union and intra-union disputes or without first
having filed a notice of strike or lockout or without the necessary strike or lockout vote having
been obtained and reported to the Board. Neither will a strike be declared after assumption
of jurisdiction by the Secretary or after certification of submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the same
grounds or the strike or lockout.
Section 6. Who May Declare a Strike or Lockout. — Any certified or duly recognized

49
bargaining representative may declare a strike in cases of bargaining deadlocks and unfair
labor practices. The employer may declare a lockout in the same cases. In the absence of a
certified or duly recognized bargaining representative, any legitimate labor organization in
the establishment may declare a strike but only on grounds of unfair labor practices. (DO 40-
03: Amending the Implementing Rules of Book V of the Labor Code of the Philippines
[February 17, 2003])
Section 10. Strike or Lockout Vote. — A decision to declare a strike must be approved by a
50
majority of the total union membership in the bargaining unit concerned obtained by secret
ballot in meetings or referenda called for the purpose. A decision to declare a lockout must
be approved by a majority of the Board of Directors of the employer, corporation or
association or the partners in a partnership obtained by a secret ballot in a meeting called for
the purpose.
The regional branch of the Board may, at its own initiative or upon request of any
affected party, supervise the conduct of the secret balloting. In every case, the union
1âшphi1
or the employer shall furnish the regional branch of the Board and the notice of
meetings referred to in the preceding paragraph at least twenty-four (24) hours
before such meetings as well as the results of the voting at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period provided in this
Rule. (DO 40-03) (Emphasis supplied)
CCBPI Postmix Workers Union v. NLRC, 359 Phil. 741, 757-758 (1998).
51
Lapanday Workers Union v. NLRC, 318 Phil. 114, 126-127 (1995).

52
318 Phil. 114 (1995).

53
Id. at 125.
54
Section 7. Notice of Strike or Lockout. — In bargaining deadlocks, a notice of strike or

55
lockout shall be filed with the regional branch of the Board at least thirty (30) days before the
intended date thereof, a copy of said notice having been served on the other party
concerned. In cases of unfair labor practice, the period of notice shall be fifteen (15) days.
However, in case of unfair labor practice involving the dismissal from employment of any
union officer duly elected in accordance with the union constitution and by-laws which may
constitute union-busting where the existence of the union is threatened, the fifteen-day
cooling-off period shall not apply and the union may take action immediately after the strike
vote is conducted and the results thereof submitted to the appropriate regional branch of the
Board.
xxxx
Section 10. Strike or Lockout Vote. — A decision to declare a strike must be

approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in meetings or referenda called for the purpose.
A decision to declare a lockout must be approved by a majority of the Board of
Directors of the employer, corporation or association or the partners in a partnership
obtained by a secret ballot in a meeting called for the purpose.
The regional branch of the Board may, at its own initiative or upon request of any
affected party, supervise the conduct of the secret balloting. In every case, the union
or the employer shall furnish the regional branch of the Board and the notice of
meetings referred to in the preceding paragraph at least twenty-four (24) hours
before such meetings as well as the results of the voting at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period provided in this
Rule. (DO 40-03)
Rollo (G.R. No. 200487), pp. 239-240.
56
Id. at 241-242.
57
Id. at 245-247.
58
Id. at 294-304.
59
Valencia v. Classique Vinyl Products Corporation, 804 Phil. 492, 504 (2017).
60
Art. 259. [248] Unfair Labor Practices of Employers. — It shall be unlawful for an employer
61
to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(b) To require as a condition of employment that a person or an employee shall not

join a labor organization or shall withdraw from one to which he belongs;
(c) To contract out services or functions being performed by union members when
such will interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or

administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions
of employment in order to encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of another union at
the time of the signing of the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the dues and
other fees paid by members of the recognized collective bargaining agent, if such
non-union members accept the benefits under the collective bargaining agreement:
Provided, That the individual authorization required under Article 242, paragraph (o)
of this Code shall not apply to the non-members of the recognized collective
bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee

for having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or its officers or agents as part
of the settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations, associations or partnerships who have actually participated
in, authorized or ratified unfair labor practices shall be held criminally liable.
To constitute union busting under Article 263 of the Labor Code, there must be: 1) a
62
dismissal from employment of union officers duly elected in accordance with the union
constitution and by-laws; and 2) the existence of the union must be threatened by such
dismissal. (Pilipino Telephone Corp. v. Pilipino Telephone Employees Association, 552 Phil.
432, 445 [2007]).
675 Phil. 861 (2011).

63
Id. at 872.
64
Rollo (G.R. No. 200487), p. 87.

65

66
Rollo (G.R. No. 200487), pp. 269-270.

67
Id. at 52.
68
Id. at 402.
69
Municipality of Orion v. Pereyra, 50 Phil. 679 (1927).

70
Id. at 684.
71
645 Phil. 503 (2010).

72
Id. at 507.
73
526 Phil. 679 (2006).

74
Id. at 697-699.
75
Supra note 72 at 516.
76
Rollo (G.R. No. 200487), p. 23.

77
Testimony of Carmen Manjon, CA rollo, pp. 130-131.

78
Supra note 74 at 699.
79
x x x Consequently, the twelve percent (12%) per annum legal interest shall apply only until
80
June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the
prevailing rate of interest when applicable. (716 Phil. 267, 280-281 [2013])
Id.
81
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 160058 June 22, 2007
PILIPINO TELEPHONE CORPORATION, petitioner,

vs.
PILIPINO TELEPHONE EMPLOYEES ASSOCIATION (PILTEA), PELAGIO S. BRIONES II,
GEORGE L. DE LEON, LECEL M. FIDEL, AUGUSTO C. FRANCISCO, OLIVER B. ANTONIO,
RONALDO B. CORONEL, CHRISTOPHER L. HERRERA and GEM TORRES, respondents.
x-----------------------------x
G.R. No. 160094 June 22, 2007
PILIPINO TELEPHONE EMPLOYEES ASSOCIATION (PILTEA), PELAGIO S. BRIONES II,

GEORGE L. DE LEON, and GEM TORRES, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PILIPINO TELEPHONE
CORPORATION, respondents.
DECISION
PUNO, C.J.:
At bar are two consolidated petitions seeking review of the decision1 and resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 59799 which modified the decision3 of the National Labor Relations
Commission (NLRC) by affirming the illegality of the strike conducted by Pilipino Telephone
Employees Association (the Union) but reducing the penalty against union officers Pelagio S.
Briones II, George De Leon, Lecel M. Fidel and Gem Torres from dismissal to suspension for six (6)
months.
First, we unfurl the facts.
The Collective Bargaining Agreement (CBA) between the Union and Pilipino Telephone Corporation
(the Company) was due to expire on December 31, 1997. On October 30, 1997, the Union submitted
to the Company its proposals for the renegotiation of the non-representation aspects of their CBA.
As there was a standstill on several issues, the parties submitted their dispute to the National
Conciliation and Mediation Board (NCMB) for preventive mediation.4 The conciliation proceedings
before the NCMB failed.
On July 13, 1998, the Union filed a Notice of Strike5 with the NCMB for unfair labor practice due to
the alleged acts of "restraint and coercion of union members and interference with their right to self-
organization" committed by the Company's Revenue Assurance Department (RAD) Manager
Rosales and its Call Center Department Manager, Manny Alegado, to wit:
1. Requiring employees to execute undated resignation letters prior to regularization as a

condition for continued employment.
2. Preventing employees from displaying Union flags and CBA's slogans.
3. Prohibiting employees from conducting and preventing employees from participating in

Union activities.
4. Requiring employees to render forced overtime to prevent them from attending Union
meetings and activities after office hours.
5. Using vulgar and insulting language such as "Kahit sa puwet n'yo isaksak ang mga
banderang yan!"
6. Threatening employees who join concerted Union activities with disciplinary action.
7. Discouraging employees from participating in Union activities by branding the activities

illegal and prohibited by law.
8. Abuse of Company Rules and Regulations to prevent the free exercise by the Union and
its members of their right to self organization and free expression (e.g. issuing show cause
memos for refusal to render overtime and vandalism).
9. Utilizing security guards to harass employees who participate in Union activities by

requiring the guards to take down the names of employees who participate in the Union
activities.6
The Company filed a petition for Consolidated Assumption of Jurisdiction with the Office of the
Secretary of Labor. On August 14, 1998, then Secretary Bienvenido E. Laguesma issued an Order,
the dispositive portion of which states:
WHEREFORE, premises considered, this Office hereby assumes jurisdiction over the entire
labor dispute at Pilipino Telephone Corporation pursuant to Art. 263(g) of the Labor Code,
as amended.
Accordingly, any strike or lockout, whether actual or intended, is hereby enjoined.
Furthermore, the parties are likewise directed to cease and desist from committing any
or all acts that might exacerbate the situation.
To expedite the resolution of the dispute, the parties are hereby directed to file their
respective position papers and documentary evidence within TEN (10) days from receipt of
this Order.
SO ORDERED.7 (Emphases supplied.)
On September 4, 1998, the Union filed a second Notice of Strike8 with the NCMB on the grounds of:
a) union busting, for the alleged refusal of the Company to turn over union funds; and b) the mass
promotion of union members during the CBA negotiation, allegedly aimed at excluding them from the
bargaining unit during the CBA negotiation. On the same day, the Union went on strike.
On September 9, 1998, Secretary Laguesma directed the striking Union officers and members to
return to work within twenty-four (24) hours from receipt of the Order and for the Company to accept
all strikers under the same terms and conditions of employment prior to the strike. The Union and its
members complied.
On December 7, 1998, the Company filed with the NLRC a petition9 to declare the Union's
September 4, 1998 strike illegal. On August 16, 1999, Labor Arbiter Aliman D. Mangandog issued a
decision, the dispositive portion of which states:
WHEREFORE, premises considered, the September 4, 1998 strike conducted by PILTEA is

declared illegal.
Accordingly, the following union officers of PILTEL/MKP, namely: George de Leon, Pelagio
S. Briones, Nelson C. Pineda, Rolando U. Sta. Ana, Elna E. Escalante, Gem P. Torres, Ma.
Rica D. Hilotin, Gerald Joseph P. Tayas, Lecel M. Fidel and Jose Rudylin R. Gamboa are
declared to have lost their employment status.
While the following members, namely: Romeo Anonuevo, Jonathan Molaer, Cris Herrera,
Edgar Alan Aquino, Aris Ablis, Dorothy Zulieta, Ronald Cornel, Arnel Garcia, Ranelio
Mendoza, Oliver Antonio, Alvin Usman, Augusto Francisco, Celia Mogol and Erlinda Madrid
are hereby suspended for six (6) months without pay.
SO ORDERED.10
The Labor Arbiter found the strike illegal for having been conducted in defiance of Secretary
Laguesma's August 14, 1998 assumption order and for non-compliance with the procedural
requirements for the conduct of a strike under the Labor Code and its implementing rules. The Labor
Arbiter cited Scholastica's College v. Ruben Torres11 which ruled that a strike undertaken despite
the issuance of an assumption or certification order by the Secretary of Labor is a prohibited activity,
hence, illegal under Article 264 of the Labor Code. He found that the grounds relied upon by the
Union in its second notice of strike were substantially the same as those set forth in its first notice of
strike. Moreover, he held that the Company's alleged refusal to turn over the checked-off union dues
was not a strikeable issue as it was not a gross and blatant violation of the economic provisions of
the CBA. He also held that the mass promotion of the Union's members was not tantamount to
dismissal, hence, did not constitute union busting. The staging of the strike was likewise found to
suffer from fatal procedural defects, to wit: a) the notice of strike was filed on the same day that the
strike was conducted; b) the fifteen (15)-day cooling-off period was not observed; c) the Union failed
to conduct a strike vote within the time prescribed by law; and d) the result of the strike vote was not
furnished to the NCMB at least seven (7) days prior to the intended strike. Certain illegal acts were
likewise found to have been committed during the strike, among which were the following: 1) striker
Manny Costales prevented the Company's Director, Lilibeth Pasa, from entering the Bankers Centre
Building; 2) union officers Judilyn Gamboa and Rolly Sta. Ana physically blocked the front entrance
of the same building; 3) striker Aris Ablis drove a company vehicle and used it to block the driveway
of PILTEL Centre II, thus, the cars inside the building were prevented from going out. The tires of
said company vehicle were found deflated the following day; 4) strikers Dorothy Zulieta and Ronald
Cornel prevented the Warehousing Manager assigned at the PILTEL Metropolitan Warehouse from
going out of his office; 5) the strikers, led by Nelson Pineda, blocked the Detachment Supervisor of
Protection Specialists and the uniformed company guards from delivering food to the non-striking
employees trapped inside PILTEL Call Center at the Manila Memorial Park Building; 6) in General
Santos City, some union members tied the entrance doors of the PILTEL Building and tied the
company vehicles together; 7) Fe Carandang, Estrella Anonical, Zaldy Logos and Jovencio Laderas
blocked the main entrance of the Boac, Marinduque office of the Company; 8) strikers Edna Carrion,
Celia Mogol, Erlinda Madrid, Raul Montalan, Rolly Miraflor, Zaldy de Chavez and Dina Madla of the
Company's office in Boac, Marinduque were also heard telling the Company's clients not to transact
business with the company; and 9) strikers Zaldy Logos, Rizaldy de Chavez, Raul Montalan, Rolly
Milaflor and Jovencio Laderas were seen preventing the free ingress and egress of the Company's
office premises in Boac, Marinduque. The Labor Arbiter ruled that since the September 4, 1998
strike was illegal, the Union officers were deemed to have lost their employment status. He further
ruled that the illegal acts committed during the strike were not serious enough to merit the dismissal
of the erring Union members as they were merely acting at the order of their leaders. Hence, the
erring union members were merely suspended for six (6) months.
On appeal, the NLRC affirmed the decision of the Labor Arbiter in toto.12 The Union, its dismissed
officers and its suspended members filed a motion for reconsideration, to no avail.13
The Union, its officers Briones, De Leon, Fidel and Torres, and its members Francisco, Antonio,
Coronel and Herrera filed a Petition for Certiorari under Rule 65 of the Rules of Court with the CA,
attributing grave abuse of discretion amounting to excess of jurisdiction on the part of the
NLRC.14 On September 20, 2002, the CA modified the ruling of the NLRC as follows:
WHEREFORE, the assailed decision of the NLRC dated February 29, 2000 is MODIFIED.
Petitioners Pelagio S. Briones, George L. De Leon, Lecel M. Fidel and Gem Torres shall be
suspended for six (6) months without pay instead of being dismissed. If already dismissed,
petitioners shall be reinstated back to their former positions, or, if already filled, then to any
other equal positions and shall be entitled to backwages computed from date of dismissal
until date of actual reinstatement less the pay for the six (6) months suspension they were
supposed to serve. The suspension of petitioners Augusto C. Francisco, Oliver B. Antonio,
Ronaldo B. Coronel and Christopher L. Herrera for six (6) months without pay and the finding
of illegality of the September 4, 1998 strike STANDS.
SO ORDERED.15
Both parties filed their respective partial motions for reconsideration - the company assailed the CA
decision decreasing the penalty of the union officers while the Union and its dismissed officers
assailed the decision declaring the strike illegal. Both motions were denied.16
Hence, the instant petitions.
In G.R. No. 160058, the Company raises the issue of:
[WHETHER] THE ASSAILED 20 SEPTEMBER 2002 DECISION AND 17 SEPTEMBER

2003 RESOLUTION OF THE COURT OF APPEALS ARE CONTRARY TO LAW AND
JURISPRUDENCE.17
It prays that the September 20, 2002 Decision and September 17, 2003 Resolution of the CA be
reversed in part and judgment be rendered affirming in toto the February 29, 2000 Decision of the
NLRC.
In G.R. No. 160094, the Union and Union officers Briones, De Leon and Torres raise the issue of:
[WHETHER] THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR IN UPHOLDING NLRC'S FINDING THAT THE 4 SEPTEMBER 1998 STRIKE HELD
BY PILTEA WAS ILLEGAL AS IT IS NOT IN ACCORDANCE WITH EXISTING LAW OR
JURISPRUDENCE.18
They pray that this Court modify the September 20, 2002 Decision and September 17, 2003
Resolution of the CA and: a) declare the Union's September 4, 1998 strike as legal; b) nullify the six-
month suspension imposed on Briones, De Leon and Torres; and c) order the Company to pay them
backwages covering the period of their suspension.
The twin issues to be resolved are: a) the legality of the Union's strike and b) the penalty to be
imposed on the Union officers, if any.
First, the legality of the strike.
The Union and its officers maintain that their September 4, 1998 strike was legal. They allege that
the Company was guilty of union busting in promoting a substantial number of Union members and
officers to positions outside the bargaining unit during the period of CBA negotiations. Allegedly, said
Union members and officers maintained the same jobs and duties despite their promotion. They also
capitalize on the CA's finding that the company was guilty of unfair labor practice in refusing to turn
over the deducted contingency fees of the union members to the union. Citing Bacus v.
Ople,19 Panay Electric Company v. NLRC20 and PNOC Dockyard and Engineering Corporation
v. NLRC,21 they contend that this finding of unfair labor practice precludes the CA from ruling that the
strike was illegal and that the Union was in bad faith in conducting the strike.
These arguments do not sway.
Article 263 of the Labor Code, as amended by Republic Act (R.A.) No. 6715,22 and Rule XXII, Book
V of the Omnibus Rules Implementing the Labor Code outline the following procedural requirements
for a valid strike:
1) A notice of strike, with the required contents, should be filed with the DOLE, specifically
the Regional Branch of the NCMB, copy furnished the employer of the union;
2) A cooling-off period must be observed between the filing of notice and the actual
execution of the strike thirty (30) days in case of bargaining deadlock and fifteen (15) days in
case of unfair labor practice. However, in the case of union busting where the union's
existence is threatened, the cooling-off period need not be observed.
xxx xxx xxx
4) Before a strike is actually commenced, a strike vote should be taken by secret balloting,
with a 24-hour prior notice to NCMB. The decision to declare a strike requires the secret-
ballot approval of majority of the total union membership in the bargaining unit concerned.
5) The result of the strike vote should be reported to the NCMB at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period.23
It is settled that these requirements are mandatory in nature and failure to comply therewith renders
the strike illegal.24
In the case at bar, the Union staged the strike on the same day that it filed its second notice of strike.
The Union violated the seven-day strike ban. This requirement should be observed to give the
Department of Labor and Employment (DOLE) an opportunity to verify whether the projected strike
really carries the approval of the majority of the union members. 25
Moreover, we agree with the CA that there was no union busting which would warrant the non-
observance of the cooling-off period. To constitute union busting under Article 263 of the Labor
Code, there must be: 1) a dismissal from employment of union officers duly elected in accordance
with the union constitution and by-laws; and 2) the existence of the union must be threatened by
such dismissal. In the case at bar, the second notice of strike filed by the Union merely assailed the
"mass promotion" of its officers and members during the CBA negotiations. Surely, promotion is
different from dismissal. As observed by the Labor Arbiter:
x x x Neither does that (sic) PILTEL's promotion of some members of respondent union
constitutes (sic) union busting which could be a valid subject of strike because they were not
being dismissed. In fact, these promoted employees did not personally come forward to
protest their promotion vis-à-vis their alleged option to remain in the union bargaining unit of
the rank and filers.26
This is consistent with our ruling in Bulletin Publishing Corporation v. Sanchez27 that a promotion
which is manifestly beneficial to an employee should not give rise to a gratuitous speculation that it
was made to deprive the union of the membership of the benefited employee.
The contention of the Union and its officers that the finding of unfair labor practice by the CA
precludes the ruling that the strike was illegal is unmeritorious. The refusal of the Company to turn
over the deducted contingency funds to the union does not justify the disregard of the mandatory
seven-day strike ban and the 15-day cooling-off period.
The Union's reliance on Bacus v. Ople,28 Panay Electric Company v. NLRC29 and PNOC

Dockyard and Engineering Corporation v. NLRC30 is likewise unavailing.
Nowhere in Panay Electric Company and PNOC Dockyard and Engineering Corporation did the

Court rule that the procedural requirements for a valid strike may be dispensed with if the striking
workers believed in good faith that the company was committing acts of unfair labor practice. In both
cases, the striking union members complied with the procedural requirements for a valid strike. It is
correct that this Court, in Bacus, held that "a strike staged by the workers inspired by good faith does
not automatically make the same illegal," but said case was decided before the effectivity of R.A. No.
6715 on March 21, 1989. We have ruled that with the enactment of R.A. No. 6715, the requirements
as to the filing of a notice of strike, strike vote, and notice given to the DOLE are mandatory in
nature.31
Moreover, we agree with the NLRC that the subject strike defied the assumption order of the
Secretary of Labor. The NLRC correctly affirmed the Labor Arbiter that the second notice of strike
was based on substantially the same grounds as the first notice of strike. The Union and its officers
and members alleged that the mass promotion of the union officers and members and the non-
remittance of the deducted contingency fees were the reasons for their concerted activities which
annoyed the Company's RAD Manager and made him commit acts of unfair labor practice,
eventually leading to the Union's filing of the first notice of strike. Clearly then, the issues which were
made as grounds for the second notice of strike, viz, the mass promotion of the union members and
officers and the non-remittance of the deducted contingency fees, were already existing when the
Secretary of Labor assumed jurisdiction over the entire labor dispute between the Company and the
Union on August 14, 1998.
Article 264 of the Labor Code provides:
Art. 264. Prohibited activities.—x x x
No strike or lockout shall be declared after assumption of jurisdiction by the President or the
Secretary or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds for the strike or
lockout.
Having settled that the subject strike was illegal, we shall now determine the proper penalty to be
imposed on the union officers who knowingly participated in the strike.
Both the Labor Arbiter and the NLRC imposed the penalty of dismissal on the striking union officers
after finding that: a) the strike was illegal for having been conducted in defiance of Secretary
Laguesma's August 14, 1998 Order of assumption of jurisdiction and for non-compliance with the
procedural requirements for the conduct of a strike under the Labor Code and its implementing rules;
b) the grounds relied upon by the Union in its second notice of strike were substantially the same as
those set forth in its first notice of strike; c) the Company's alleged refusal to turn over the checked-
off union dues was not a strikeable issue as it was not a gross and blatant violation of the economic
provisions of the CBA; d) the mass promotion of the Union's members was also not tantamount to
dismissal, hence, did not constitute union busting; and e) certain illegal acts were found to have
been committed during the strike.
On the other hand, the CA reduced the penalty of the union officers from dismissal to suspension for
six months after finding that the "supreme penalty of dismissal" imposed on union officers Briones,
De Leon, Fidel and Torres was "so harsh" considering that the Union did not defy the Secretary of
Labor's Assumption Order and that the Company did not have "clean hands" when it filed the instant
case for having committed an unfair labor practice by refusing to turn over the union dues to the
Union.
We find that the CA committed a reversible error in modifying the rulings of the Labor Arbiter and the
NLRC.
For a petition for certiorari under Rule 65 of the Rules of Court to prosper, the tribunal, board or
officer exercising judicial or quasi-judicial functions must be proven to have acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction.32 "Grave abuse of discretion" has been defined as "a capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough, it must be
so grave as when the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty
or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law."33
We note that although the CA modified the ruling of the NLRC, nowhere in its decision did it attribute
grave abuse of discretion to the NLRC. And rightly so.
Article 264 of the Labor Code further provides:
Art. 264. Prohibited activities.— x x x
Any workers whose employment has been terminated as a consequence of an unlawful

lockout shall be entitled to reinstatement with full back wages. Any union officer who
knowingly participates in illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have
lost his employment status: Provided, that mere participation of a worker in a lawful
strike shall not constitute sufficient ground for termination of his employment, even if
a replacement had been hired by the employer during such lawful strike. x x x
We have explained the meaning of this provision as follows:
The effects of illegal strikes, as outlined in Article 264 of the Labor Code, make a distinction
between ordinary workers and union officers who participate therein. Under established
jurisprudence, a union officer may be terminated from employment for knowingly
participating in an illegal strike. The fate of union members is different. Mere participation in
an illegal strike is not a sufficient ground for termination of the services of the union
members. The Labor Code protects ordinary, rank-and-file union members who participated
in such a strike from losing their jobs provided that they did not commit illegal acts during the
strike.34
In Gold City Integrated Port Service, Inc. v. NLRC,35 the Court held that "[t]he law, in using the
word may, grants the employer the option of declaring a union officer who participated in an
illegal strike as having lost his employment." Thus, in a number of cases,36 proof that an
employee who knowingly participated in an illegal strike is a union officer was enough to warrant his
dismissal from employment.
This rule was relaxed in the case of PAL v. Brillantes37 where the Court "invoke[d] its judicial
prerogative to resolve disputes in a way to render to each interested party the most judicious
solution, and in the ultimate scheme, a resolution of a dispute tending to preserve the greater order
of society." In said case, the Court dismissed the petition of PAL seeking the termination from
employment of certain Union members and officers who staged a strike in violation of the Secretary
of Labor's return-to-work order. The Court found that both parties contributed to the volatile
atmosphere that emerged despite the Secretary of Labor's status quo order as PAL terminated en
masse the employment of 183 union officers and members. It noted the finding of the Acting
Secretary of Labor that PAL "did not come to this office with 'clean hands' in seeking the termination
of the officers and members of PALEA who participated in the 16 June 1994 strike."38
This Court exercised this judicial prerogative sparingly in Nissan Motors Philippines, Inc. v.
Secretary of Labor.39 In said case, the Court also found Nissan equally guilty of exacerbating the
situation after the assumption order of the Secretary for suspending a substantial number of Union
officers and members with threat of eventual dismissal and perceived illegal lockout and union
busting. However, while it affirmed the ruling of the Secretary of Labor suspending the union
members who participated in the illegal strike, the Court sustained the dismissal of the union officers,
viz:
While the employer is authorized to declare a union officer who participated in an illegal
strike as having lost his employment, his/its option is not as wide with respect to union
members or workers for the law itself draws a line and makes a distinction between union
officers and members/ordinary workers. An ordinary striking worker or union member cannot,
as a rule, be terminated for mere participation in an illegal strike; there must be proof that he
committed illegal acts during the strike.40
The Court further explained the reason:

x x x Thus in Association of Independent Union in the Philippines vs. NLRC,41 we held
that the responsibility of union officers, as main players in an illegal strike, is greater
than that of the members and, therefore, limiting the penalty of dismissal only for the
former for participation in an illegal strike is in order. Of the same tenor, albeit formulated a
bit differently is our holding in Gold City Integrated Port Service, Inc. vs. NLRC.42 (Emphasis
supplied.)
In the case at bar, we do not find any reason to deviate from our rulings in Gold City Integrated
Port Service, Inc. and Nissan Motors Philippines, Inc. It bears emphasis that the strike staged by
the Union in the instant case was illegal for its procedural infirmities and for defiance of the
Secretary's assumption order. The CA, the NLRC and the Labor Arbiter were unanimous in finding
that bad faith existed in the conduct of the subject strike. The relevant portion of the CA Decision
states:
x x x We cannot go to the extent of ascribing good faith to the means taken in
conducting the strike. The requirement of the law is simple, that is—1. Give a Notice of
Strike; 2. Observe the cooling period; 3. Observe the mandatory seven day strike ban; 3. If
the act is union busting, then the union may strike doing away with the cooling-off period,
subject only to the seven-day strike ban. To be lawful, a strike must simply have a lawful
purpose and should be executed through lawful means. Here, the union cannot claim
good faith in the conduct of the strike because, as can be gleaned from the findings of
the Labor Arbiter, this was an extensively coordinated strike having been conducted
all through out the offices of PILTEL all over the country. Evidently, the strike was
planned. Verily, they cannot now come to court hiding behind the shield of "good faith." Be
that as it may, petitioners claim good faith only in so far as their grounds for the strike but not
on the conduct of the strike. Consequently, they still had to comply with the procedural
requirements for a strike, which, in this case, they failed to do so.43
Thus, in imposing the penalty of dismissal, the NLRC correctly held:
x x x the point We wish to stress is that the [open, blatant] and willful defiance by the
respondents of the Order emanating from the Secretary of Labor and Employment in this
labor dispute only goes to show that the respondents have little or no regard at all for lawful
orders from duly constituted authorities. For what their officers and members have suffered
they have no one else to blame.44
It cannot be overemphasized that strike, as the most preeminent economic weapon of the workers to
force management to agree to an equitable sharing of the joint product of labor and capital, exert
some disquieting effects not only on the relationship between labor and management, but also on
the general peace and progress of society and economic well-being of the State.45 This weapon is so
critical that the law imposes the supreme penalty of dismissal on union officers who irresponsibly
participate in an illegal strike and union members who commit unlawful acts during a strike. The
responsibility of the union officers, as main players in an illegal strike, is greater than that of the
members as the union officers have the duty to guide their members to respect the law.46 The policy
of the state is not to tolerate actions directed at the destabilization of the social order, where the
relationship between labor and management has been endangered by abuse of one party's
bargaining prerogative, to the extent of disregarding not only the direct order of the government to
maintain the status quo, but the welfare of the entire workforce though they may not be involved in
the dispute. The grave penalty of dismissal imposed on the guilty parties is a natural consequence,
considering the interest of public welfare.47
IN VIEW WHEREOF, the petition in G.R. No. 160094 is DENIED. The petition in G.R. No. 160058
is GRANTED. The Decision and Resolution of the CA in CA-G.R. SP No. 59799 dated September
20, 2002 and September 17, 2003, respectively, are REVERSED and the Decision and Resolution
of the NLRC dated February 29, 2000 and April 28, 2000, respectively, are REINSTATED.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna, Garcia, JJ., concur.
Footnotes
1
Dated September 20, 2002; Rollo of G.R. No. 160058, pp. 11-25.
2
Dated September 17, 2003; id. at 28.
3
Dated February 29, 2000; id. at 122-128.
4
The case was docketed as NCMB-NCR-PM-06-171-98.
5
Docketed as NCMB-NCR-NS-07-271-98; CA Rollo, p. 39.
6
Id. at 37.
7
Id. at 43.
8
Id. at 40.
9
Docketed as NLRC NCR Case No. 00-12-09880-98.
10
Rollo of G.R. No. 160058, p. 120.
11
G.R. No. 100158, June 29, 1992, 210 SCRA 565.
12
Decision dated February 29, 2000; Rollo of G.R. No. 160058, pp. 122-128.
13
14
Id. at 2-17.
15
Rollo of G.R. No. 160058, p. 25.
16
CA rollo, p. 307.
17
Rollo of G.R. No. 160058, p. 44.
18
Rollo of G.R. No. 160094, p. 18.
19
No. L-56856, October 23, 1984, 132 SCRA 690.
20
G.R. No. 102672, October 4, 1995, 248 SCRA 688.
21
G.R. No. 118223, June 26, 1998, 291 SCRA 231.
22
Took effect on March 21, 1989.
National Federation of Labor (NFL) v. NLRC, G.R. No. 113466, December 15, 1997, 283
23
SCRA 275, 286.
CCBPI Postmix Workers Union v. NLRC, G.R. No. 114521, November 27, 1998, 299
24
SCRA 410, 424.
25
Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant,
and Allied Industries, G.R. No. 153664, July 18, 2003, 406 SCRA 688, 710; First City
Interlink Transportation Co., Inc. v. Confesor, G.R. No. 106316, May 5, 1997, 272 SCRA
124, 133.
26
CA rollo, p. 88.
27
G.R. No. L-74425, October 7, 1986, 144 SCRA 628, 641.
28
Supra note 19.
29
Supra note 20.
30
Supra note 21.
Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc., G.R. No.

31
140992, March 25, 2004, 426 SCRA 319, 326, citing National Federation of Labor v. NLRC,
supra note 23.
32
Section 1, Rule 65, Rules of Court.
Saliguin v. COMELEC, G.R. No. 166046, March 23, 2006, 485 SCRA 219, citing Carlos v.
33
Angles, G.R. No. 142907, November 29, 2000, 346 SCRA 571, 583.
CCBPI Postmix Workers Union v. NLRC, supra note 24, 426. See also Samahang
34
Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc., supra note 31, 327-328
citing Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and
Employment, G.R. Nos. 122743 and 127215, December 12, 1997, 283 SCRA 145, 151.
35
G.R. No. 103560, July 6, 1995, 245 SCRA 627, 641.
36
See Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel,
Restaurant and Allied Industries, supra note 25; First City Interlink Transportation Co., Inc. v.
Confesor, supra note 25; National Union of Workers in Hotels, Restaurants and Allied
Industries (NUHRAIN)- The Peninsula Manila Chapter (Interim Union Junta) v. NLRC, G.R.
No. 125561, March 6, 1998, 287 SCRA 192.
37
G.R. No. 119360, October 10, 1997, 280 SCRA 515, 518.
38
Id. at 518.
39
G.R. Nos. 158190-91, June 21, 2006, 491 SCRA 604.
40
Id. at 622, citing Gold City Integrated Port Service, Inc. v. NLRC, supra note 35.
41
G.R. No. 120505, March 25, 1999, 305 SCRA 219.
42
Nissan Motors Philippines, Inc. v. Secretary of Labor, supra note 39, 624.
43
44
Id. at 27-28.
Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and
45
Allied Industries, supra note 25, citing Lapanday Workers Union v. NLRC, G.R. No. 95494,
September 7, 1995, 248 SCRA 95.
Continental Cement Corporation Labor Union v. Continental Cement Corporation, G.R. No.

46
51544, August 30, 1990, 189 SCRA 134, 141.
47
PAL v. Brillantes, supra note 37, 517.

SUPREME COURT
Manila
SPECIAL SECOND DIVISION
G.R. No. 155109 March 14, 2012
C. ALCANTARA & SONS, INC., Petitioner,

vs.
COURT OF APPEALS, LABOR ARBITER ANTONIO M. VILLANUEVA, LABOR ARBITER
ARTURO L. GAMOLO, SHERIFF OF NLRC RAB-XI-DAVAO CITY, NAGKAHIUSANG MAMUMUO
SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO
CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO
LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN, RAUL CANTIGA, EDUARDO
CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR, CIRILO MINO,
ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO
MEJOS, HECTOR ESTUITA, BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO
CAGAS, ALEJANDRO HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS,
ERMELANDO BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE
AMOYLIN, TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO SABELLANO,
CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO ALDEPOLLA, LUDIVICO ABAD,
WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO JARABAY, FELICIANO AMPER,
ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO
MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO
MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO
MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN, ARSENIO
MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO, CARLITO BURILLO, LEO
MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA, MARIO NAMOC, CARLITO
CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, EDGARDO ORDIZ, LEONARDO
CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO,
JESUS PATOC, RAMON CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA LLANA,
NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS,
PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO, PATRICIO
SALOMON, NESTOR ENDAYA, MARIO SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE,
VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-AN, SATURNINO YAGON,
CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA
and EDUARDO GENELSA, Respondents.
x-----------------------x
G.R. No. 155135
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG,

JOSHUA BARREDO, ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA,
HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN,
RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO,
BONIFACIO SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO
ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME
CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER,
EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO
LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN, TRANQUILINO ORALLO,
CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA,
JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO
JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO
LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES,
ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY,
JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO,
JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO,
CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA,
MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, JUANITO
NISNISAN, AURELIO CARIN, PRIMO OPLIMO, ANGELITO CASTANEDA, EDGARDO ORDIZ,
LEONARDO CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO
COMPRADO, JESUS PATOC, RAMON CONSTANTINO, MANUEL PIAPE, ROY CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO
GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL,
FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON,
ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO,
ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO,
FERVIE GALVEZ, ALFREDO TORALBA and EDUARDO GENELSA, Petitioners,
vs.
C. ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A. CLAUDIO, CORNELIO
E. CAGUIAT, JESUS S. DELA CRUZ, ROLANDO Z. ANDRES and JOSE MA. MANUEL
YRASUEGUI, Respondents.
x-----------------------x
G.R. No. 179220
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), AND ITS MEMBERS whose

names are listed below, Petitioners,
vs.
C. ALCANTARA & SONS, INC., Respondent.
RESOLUTION
PERALTA, J.:
For resolution are the (1) Motion for Partial Reconsideration filed by C. Alcantara & Sons, Inc.
1
(CASI) and (2) Motion for Reconsideration filed by Nagkahiusang Mamumuo sa Alsons-SPFL (the
2
Union) and the Union officers and their striking members of the Court’s Decision dated September
3 4 5
29, 2010. In a Resolution dated December 13, 2010, the parties were required to submit their
6
respective Comments. After several motions for extension, the parties submitted the required
comments. Hence, this resolution.
For a proper perspective, we state briefly the facts of the case.
The negotiation between CASI and the Union on the economic provisions of the Collective
Bargaining Agreement (CBA) ended in a deadlock prompting the Union to stage a strike, but the
7
strike was later declared by the Labor Arbiter (LA) to be illegal having been staged in violation of the
CBA’s no strike-no lockout provision. Consequently, the Union officers were deemed to have
8
forfeited their employment with the company and made them liable for actual damages plus interest
and attorney’s fees, while the Union members were ordered to be reinstated without backwages
there being no proof that they actually committed illegal acts during the strike.
9
Notwithstanding the provision of the Labor Code mandating that the reinstatement aspect of the
decision be immediately executory, the LA refused to reinstate the dismissed Union members. On
November 8, 1999, the NLRC affirmed the LA decision insofar as it declared the strike illegal and
ordered the Union officers dismissed from employment and liable for damages but modified the
same by considering the Union members to have been validly dismissed from employment for
committing prohibited and illegal acts. 10
On petition for certiorari, the Court of Appeals (CA) annulled the NLRC decision and reinstated that
of the LA. Aggrieved, CASI, the Union and the Union officers and members elevated the matter to
this Court. The cases were docketed as G.R. Nos. 155109 and 155135. 11
During the pendency of the cases, the affected Union members (who were ordered reinstated) filed
with the LA a motion for reinstatement pending appeal and the computation of their backwages.
Instead of reinstating the Union members, the LA awarded separation pay and other benefits. On 12
appeal, the NLRC denied the Union members’ claim for separation pay, accrued wages and other
benefits. When elevated to the CA, the appellate court held that reinstatement pending appeal
13
applies only to illegal dismissal cases under Article 223 of the Labor Code and not to cases under
Article 263. Hence, the petition by the Union and its officers and members in G.R. No. 179220.
14
G.R. Nos. 155109, 155135, and 179220 were consolidated. On September 29, 2010, the Court
rendered a decision the dispositive portion of which reads:
WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and
its officers and members in G.R. No. 155135 for lack of merit, and REVERSES and SETS ASIDE
the decision of the Court of Appeals in CA-G.R. SP 59604 dated March 20, 2002. The Court, on the
other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109 and REINSTATES the
decision of the National Labor Relations Commission in NLRC CA M-004996-99 dated November 8,
1999.
Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa Alsons-
SPFL and their dismissed members in G.R. No. 179220 and ORDERS C. Alcantara & Sons, Inc. to
pay the terminated Union members backwages for four (4) months and nine (9) days and separation
pays equivalent to one-half month salary for every year of service to the company up to the date of
their termination, with interest of 12% per annum from the time this decision becomes final and
executory until such backwages and separation pays are paid. The Court DENIES all other claims.
SO ORDERED. 15
The Court agreed with the CA on the illegality of the strike as well as the termination of the Union
officers, but disagreed with the CA insofar as it affirmed the reinstatement of the Union members.
The Court, instead, sustained the dismissal not only of the Union officers but also the Union
members who, during the illegal strike, committed prohibited acts by threatening, coercing, and
intimidating non-striking employees, officers, suppliers and customers; obstructing the free ingress to
and egress from the company premises; and resisting and defying the implementation of the writ of
preliminary injunction issued against the strikers.
16
The Court further held that the terminated Union members, who were ordered reinstated by the LA,
should have been immediately reinstated due to the immediate executory nature of the
reinstatement aspect of the LA decision. In view, however, of CASI’s failure to reinstate the
dismissed employees, the Court ordered CASI to pay the terminated Union members their accrued
backwages from the date of the LA decision until the eventual reversal by the NLRC of the order of
reinstatement. In addition to the accrued backwages, the Court awarded separation pay as a form
17
of financial assistance to the Union members equivalent to one-half month salary for every year of
service to the company up to the date of their termination. 18
Not satisfied, CASI filed a Motion for Partial Reconsideration of the above decision based on the
following grounds:
I.
IT IS RESPECTFULLY SUBMITTED THAT A PRECEDENT SETTING RULING OF THIS

HONORABLE COURT IN ESCARIO V. NLRC [G.R. No. 160302, 27 SEPTEMBER 2010] –
PARTICULARLY ON THE PROPER APPLICATION OF ARTICLES 264 AND 279 OF THE
LABOR CODE – SUPPORTS THE AFFIRMATION AND NOT THE REVERSAL OF THE
FINDINGS OF THE COURT OF APPEALS ["CA"], AND NEGATES THE ENTITLEMENT TO
ACCRUED WAGES OF THE UNION MEMBERS WHO COMMITTED ILLEGAL ACTS
DURING THE ILLEGAL STRIKE, NOTWITHSTANDING THAT THE LABOR ARBITER
AWARDED THE SAME.
II.
IT IS RESPECTFULY SUBMITTED THAT THIS HONORABLE COURT ERRED WHEN IT

RESOLVED TO GRANT SEPARATION PAY TO THE UNION MEMBERS WHO
COMMITTED ILLEGAL ACTS DURING THE ILLEGAL STRIKE CONSIDERING THAT
JURISPRUDENCE CITED TO JUSTIFY THE GRANT OF SEPARATION PAY DO NOT
APPLY TO THE PRESENT CASE AS IT APPLIES ONLY TO DISMISSALS FOR A JUST
CAUSE. 19
The Union, its officers and members likewise filed their separate motion for reconsideration assailing
the Court’s conclusions that: (1) the strike is illegal; (2) that the officers of the Union and its
appointed shop stewards automatically forfeited their employment status when they participated in
the strike; (3) that the Union members committed illegal acts during the strike and are deemed to
have lost their employment status; and (4) that CASI is entitled to actual damages and attorney’s
fees. They also fault the Court in not finding that: (1) CASI and its officers are guilty of acts of unfair
20
labor practice or violation of Article 248 of the Labor Code; (2) the lockout declared by the company
is illegal; (3) CASI and its officers committed acts of discrimination; (4) CASI and its officers violated
Article 254 of the Labor Code; and (5) CASI and its officers are liable for actual, moral, and
exemplary damages to the Union, its officers and members. 21
Simply stated, CASI only questions the propriety of the award of backwages and separation pay,
while the Union, its officers and members seek the reversal of the Court’s conclusions on the
illegality of the strike, the validity of the termination of the Union officers and members, and the
award of actual damages and attorney’s fees as well as the denial of their counterclaims against
CASI.
After a careful review of the records of the case, we find it necessary to reconsider the Court’s
September 29, 2010 decision, but only as to the award of separation pay.
The LA, the NLRC, the CA and the Court are one in saying that the strike staged by the Union,
participated in by the Union officers and members, is illegal being in violation of the no strike-no
lockout provision of the CBA which enjoined both the Union and the company from resorting to the
use of economic weapons available to them under the law and to instead take recourse to voluntary
arbitration in settling their disputes. We, therefore, find no reason to depart from such conclusion.
22
Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and members
participating in illegal strikes and/or committing illegal acts, to wit:
ART. 264. PROHIBITED ACTIVITIES
(a) x x x
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall
be entitled to reinstatement with full backwages. Any Union officer who knowingly participates in an
illegal strike and any worker or Union officer who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer during such lawful strike.
Thus, the above-quoted provision sanctions the dismissal of a Union officer who knowingly
participates in an illegal strike or who knowingly participates in the commission of illegal acts during
a lawful strike. In this case, the Union officers were in clear breach of the above provision of law
23
when they knowingly participated in the illegal strike.24
As to the Union members, the same provision of law provides that a member is liable when he
knowingly participates in the commission of illegal acts during a strike. We find no reason to reverse
the conclusion of the Court that CASI presented substantial evidence to show that the striking Union
members committed the following prohibited acts:
a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and
customers;
b. They obstructed the free ingress to and egress from the company premises; and
c. They resisted and defied the implementation of the writ of preliminary injunction issued
against the strikers.
25
The commission of the above prohibited acts by the striking Union members warrants their dismissal
from employment.
As clearly narrated earlier, the LA found the strike illegal and sustained the dismissal of the Union
officers, but ordered the reinstatement of the striking Union members for lack of evidence showing
that they committed illegal acts during the illegal strike. This decision, however, was later reversed
by the NLRC. Pursuant to Article 223 of the Labor Code and well-established jurisprudence, the
26 27
decision of the LA reinstating a dismissed or separated employee, insofar as the reinstatement

aspect is concerned, shall immediately be executory, pending appeal. The employee shall either be
28
admitted back to work under the same terms and conditions prevailing prior to his dismissal or
separation, or, at the option of the employee, merely reinstated in the payroll. It is obligatory on the
29
part of the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court. If the employer fails to exercise the option of re-admitting
30
the employee to work or to reinstate him in the payroll, the employer must pay the employee’s
salaries during the period between the LA’s order of reinstatement pending appeal and the
resolution of the higher court overturning that of the LA. In this case, CASI is liable to pay the
31
striking Union members their accrued wages for four months and nine days, which is the period from
the notice of the LA’s order of reinstatement until the reversal thereof by the NLRC. 32
Citing Escario v. National Labor Relations Commission (Third Division), CASI claims that the award
33
of the four-month accrued salaries to the Union members is not sanctioned by jurisprudence. In
Escario, the Court categorically stated that the strikers were not entitled to their wages during the
period of the strike (even if the strike might be legal), because they performed no work during the
strike. The Court further held that it was neither fair nor just that the dismissed employees should
litigate against their employer on the latter’s time. In this case, however, the four-month accrued
34
salaries awarded to the Union members are not the backwages referred to in Escario. To be sure,
the awards were not given as their salaries during the period of the strike. Rather, they constitute the
employer’s liability to the employees for its failure to exercise the option of actual reinstatement or
payroll reinstatement following the LA’s decision to reinstate the Union members as mandated by
Article 223 of the Labor Code adequately discussed earlier. In other words, such monetary award
refers to the Union members’ accrued salaries by reason of the reinstatement order of the LA which
is self-executory pursuant to Article 223. We, therefore, sustain the award of the four-month accrued
35
salaries.
1âwphi1
Finally, as regards the separation pay as a form of financial assistance awarded by the Court, we
find it necessary to reconsider the same and delete the award pursuant to prevailing jurisprudence.
Separation pay may be given as a form of financial assistance when a worker is dismissed in cases
such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing
or cessation of operation of the establishment, or in case the employee was found to have been
suffering from a disease such that his continued employment is prohibited by law. It is a statutory
36
right defined as the amount that an employee receives at the time of his severance from the service
and is designed to provide the employee with the wherewithal during the period that he is looking for
another employment. It is oriented towards the immediate future, the transitional period the
37
dismissed employee must undergo before locating a replacement job. As a general rule, when just
38
causes for terminating the services of an employee exist, the employee is not entitled to separation
pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to
39
exceptions. The Court, in Philippine Long Distance Telephone Co. v. NLRC, laid down the
40 41
guidelines when separation pay in the form of financial assistance may be allowed, to wit:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his
dismissal only and that the separation pay has nothing to do with the wrong he has committed x x x. 42
We had the occasion to resolve the same issue in Toyota Motor Phils. Corp. Workers Association
(TMPCWA) v. National Labor Relations Commission. Following the declaration that the strike
43
staged by the Union members is illegal, the Union officers and members were considered validly
dismissed from employment for committing illegal acts during the illegal strike. The Court affirmed
the CA’s conclusion that the commission of illegal acts during the illegal strike constituted serious
misconduct. Hence, the award of separation pay to the Union officials and members was not
44
sustained. 45
Indeed, we applied social justice and equity considerations in several cases to justify the award of
financial assistance. In Piñero v. National Labor Relations Commission, the Court declared the
46
strike to be illegal for failure to comply with the procedural requirements. We, likewise, sustained the
dismissal of the Union president for participating in said illegal strike. Considering, however, that his
infraction is not so reprehensible and unscrupulous as to warrant complete disregard of his long
years of service, and considering further that he has no previous derogatory records, we granted
financial assistance to support him in the twilight of his life after long years of service. The same 47
compassion was also applied in Aparente, Sr. v. NLRC where the employee was declared to have
48
been validly terminated from service after having been found guilty of driving without a valid driver’s
license, which is a clear violation of the company’s rules and regulations. We, likewise, awarded 49
financial assistance in Salavarria v. Letran College to the legally dismissed teacher for violation of
50
school policy because such infraction neither amounted to serious misconduct nor reflected that of a
morally depraved person.
However, in a number of cases cited in Toyota Motor Phils. Corp. Workers Association (TMPCWA)
v. National Labor Relations Commission, we refrained from awarding separation pay or financial
51
assistance to Union officers and members who were separated from service due to their
participation in or commission of illegal acts during the strike. In Pilipino Telephone Corporation v.
52
Pilipino Telephone Employees Association (PILTEA), the strike was found to be illegal because of
53
procedural infirmities and for defiance of the Secretary of Labor’s assumption order. Hence, we
upheld the Union officers’ dismissal without granting financial assistance. In Sukhotai Cuisine and
Restaurant v. Court of Appeals, and Manila Diamond Hotel and Resort, Inc. (Manila Diamond Hotel)
54
v. Manila Diamond Hotel Employees Union, the Union officers and members who participated in and
55
committed illegal acts during the illegal strike were deemed to have lost their employment status and
were not awarded financial assistance.
In Telefunken Semiconductors Employees Union v. Court of Appeals, the Court held that the
56
strikers’ open and willful defiance of the assumption order of the Secretary of Labor constitute
serious misconduct and reflective of their moral character, hence, granting of financial assistance to
them cannot be justified. In Chua v. National Labor Relations Commission, we disallowed the award
57
of financial assistance to the dismissed employees for their participation in the unlawful and violent
strike which resulted in multiple deaths and extensive property damage because it constitutes
serious misconduct on their part.
Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have
knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts
during the strike. Thus, as we concluded in Toyota, Telefunken, Chua and the other cases cited
above, we delete the award of separation pay as a form of financial assistance.
WHEREFORE, premises considered, the motion for reconsideration of the Union, its officers and
members are DENIED for lack of merit, while the motion for partial reconsideration filed by C.
Alcantara & Sons, Inc. is PARTLY GRANTED. The Decision of the Court dated September 29, 2010
is hereby PARTLY RECONSIDERED by deleting the award of separation pay.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
PRESBITERO J. VELASCO, JR. JOSE CATRAL MENDOZA

BIENVENIDO L. REYES
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
Special Second Division, Chairperson
CERTIFICATION
RENATO C. CORONA
Chief Justice
Footnotes
Rollo (G.R. No. 155109), pp. 1485-1499.

1
Id. at 1501-1651.
2
The officers of the Union are the following: Felixberto Irag, Joshua Barredo, Edilberto
3
Demetria, Romulo Lungay, Bonerme Maturan, Eduardo Campuso, Gilberto Gabronino, Cirilo
Mino, Roberto Abonado, Fructoso Cabahog, Alfredo Tropico, Hector Estuita, Eduardo
Capuyan, Alejandro Harder, Jaime Montederamos, Reynaldo Limpajan, Ernesto Cuario,
Edgar Monday, Herminio Robillo, Matroil delos Santos, Raul Cantiga, Rudy Anadon,
Bonifacio Salvador, Florente Seno, Warlito Monte, Pedro Esquierdo, Danilo Mejos,
Bartolome Castillanes, Saturnino Cagas, Eduardo Larena, Ermelando Basadre, Elpidio
Libranza.Teddy Suelo, Tranquilino Orallo, Manolito Sabellano, Primitivo Garcia, Jose
Amoylin, Carlos Baldos, Carmelito Tobias and Juanito Aldepolla.
These are Ludivicio Abad, Ricardo Alto, Feliciano Amper, Roberto Andrade, Julio Anino,
4
Pedro Aquino, Romeo Araneta, Constancio Arnaiz, Justino Ascano, Ernesto Baino, Jesus
Beritan, Diosdado Bongabong, Carilito Cal, Rolando Capuyan, Aurelio Carin, Angelito
Castañeda, Leonaro Casurra, Filemon Cesar, Romeo Comprado, Ramon Constantino, Roy
Constantino, Samuel dela Llana, Rosaldo Dagondon, Bonifacio Dinagudos, Jose Eboran,
Francisco Empuerto, Nestor Endaya, Ernesto Estilo, Vicente Fabroa, Ramon Fernando,
Samson Fulgueras, Sulpecio Gagni, Fervie Galvez, Eduardo Genelsa, Tito Guades,
Armando Gucila, Ernesto Hotoy, Wencislao Inghug, Epifanio Jarabay, Alexander Judilla,
Alfredo Lesula, Benito Magpusao, Eddie Mansanades, Arguilao Mantica, Silverio Maranian,
Ricardo Maturan, Antonio Melargo, Arsenio Melicor, Lauro Montenegro, Leo Mora, Ronaldo
Naboya, Mario Namoc, Gerwino Natividad, Juanito Nisnisan, Primo Oplimo, Edgardo Ordiz,
Patrocino Ortega, Mario Patan, Jesus Patoc, Manuel Piape, Alberto Pielago, Nicasio Plaza,
Fausto Quibod, Procopio Ramos, Rosendo Sajol, Patricio Solomon, Mario Salvaleon,
Bonifacio Sigue, Jaime Sucuahi, Alex Tauto-an, Claudio Tirol, Jose Tolero, Alfredo Toralba,
Eusebio Tumulak, Hermes Villacarlos, Saturnino Yagon and Edilberto Yambao.
Rollo (G.R. No. 155109), pp. 1467-1484.

5
Id. at 1654-1655.
6
Id. at 1473.
7
The LA decision was rendered on June 29, 1999; id. at 1474.

8
Rollo (G.R. No. 155109), p. 1474.

9
10
Id. at 1475.
11
Id.
12
Id.
13
Id. at 1475-1476.
14
Id. at 1476.
15
Id. at 1482-1483.
16
Id. at 1478-1479.
17
Id. at 1480-1481.
18
Id. at 1481-1482.
19
Id. at 1486.
20
Id. at 1511-1513.
21
Id. at 1513-1515.
22
Id. at 1477.
Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
23
Commission, G.R. Nos. 158786 & 158789, October 19, 2007, 537 SCRA 171, 207.
24
Id.
25
Rollo (G.R. No. 155109), p. 1479.
26
Article 223 – Appeal — x x x
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation
or, at the option of the employer, merely reinstated in the payroll. The posting of a
bond by the employer shall not stay the execution for reinstatement provided herein.
x x x.
Islriz Trading/Victor Hugo Lu v. Capada, G.R. No. 168501, January 31, 2011, 641 SCRA 9;
27
Garcia v. Philippine Airlines, Inc., G.R. No. 164856, January 20, 2009, 576 SCRA 479.
28
Garcia v. Philippine Airlines, Inc., supra, at 489.
29
Id.
30
Id. at 493.
Islriz Trading/Victor Hugo Lu v. Capada, supra note 27, at 24; College of Immaculate
31
Conception v. National Labor Relations Commission, G.R. No.167563, March 22, 2010, 616
SCRA 299, 309; Garcia v. Philippine Airlines, Inc., supra note 27, at 493.
32
Rollo (G.R. No. 155109), p. 1481.
33
G.R. No. 160302, September 27, 2010, 631 SCRA 261.
34
Id. at 274.
35
Islriz Trading/Victor Hugo Lu v. Capada, supra note 27, at 16.
36
Gold City Integrated Port Service, Inc. v. NLRC, 315 Phil. 698, 711 (1995).
37
Id. at 712 .
38
Id.
Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations
39
Commission, supra note 23, at 219.
40
Id. at 220.
41
247 Phil. 641 (1988).
42
Id. at 649.
43
Supra note 23.
44
Id.
45
Id. at 227.
46
480 Phil. 534 (2004).
47
Id. at 543-544.
48
387 Phil. 96 (2000).
49
Id.
50
G.R. No. 110396, September 25, 1998, 296 SCRA 184.
51
Supra note 23.
52
Id. at 225.
53
G.R. Nos. 160058 & 160094, June 22, 2007, 525 SCRA 361.
54
G.R. No. 150437, July 17, 2006, 495 SCRA 336.
55
G.R. No. 158075, June 30, 2006, 494 SCRA 195.
56
401 Phil. 776 (2000).
57
G.R. No. 105775, February 8, 1993, 218 SCRA 545.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 102672 October 4, 1995
PANAY ELECTRIC COMPANY, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION AND PANAY ELECTRIC
COMPANY EMPLOYEES AND WORKERS ASSOCIATION, respondents.
VITUG, J.:
In this petition for certiorari, petitioner Panay Electric Company, Inc., seeks to set aside the
questioned resolution of the National Labor Relations Commission ("NLRC") in granting separation
benefits to Enrique Huyan and Prescilla Napiar, in awarding moral and exemplary damages to
Enrique Huyan, and in merely sanctioning the suspension, instead of terminating the employment
status, of other officers and members of respondent labor union.
Here following is a factual backdrop of the case.
On 30 October 1990, petitioner Panay Electric Company, Inc., posted in its premises a notice
announcing the need for a "Report Clerk" who could assume the responsibility of gathering
accounting and computer data at its power plant. The position was open to any employee, "with Pay
Class V," of petitioner company. When nobody applied for the position, the EDP/Personnel Manager
recommended Enrique Huyan who was at the time an Administrative Personnel Assistant at the
head office. Huyan was then also a Vice President of respondent union. The recommendation was
approved by the company's President and General Manager.
In a letter, dated 09 November 1990, Enrique Huyan informed petitioner that he was not interested in
accepting the new position. He gave the following reasons:
a. The manner or procedure of implementing this notice of transfer is skeptical since
from Administrative Personnel Assistant to Report Clerk is apparently a demotion in
my part.
b. The position of Report Clerk is Pay Class III per our Organizational Chart.
c. Being the Vice-President of PECEWA, my transfer would certainly hinder my

function in settling labor matters and other problems with other PECEWA Officers.
d. Currently, the activation of geothermal power plant in Palimpinon, Negros had

gave rise to additional displaced workers in which my transfer would be another onus
to the Power Plant supervisor and my lack of technical knowhow, I presumed would
obstruct the flow of operation in the said department. 1
On 20 November 1990, the EDP/Personnel Manager required Huyan to explain within 48 hours why
no disciplinary action should be taken against him for gross insubordination and for failure to follow
the General Manager's approved directive. Eventually, on 03 December 1990, Huyan was given a
"notice of dismissal" for:
1. Failure to comply with the GM's general directive of 11/9/90 to a new assigned
task in the Power Plant;
2. Failure to comply with your direct superior's (AO) verbal directive to proceed to the
Power Plant 11/10/90 & 11/19/90;
3 Failure to comply with the undersigned's, as personnel manager, verbal directive to

proceed to the Power Plant last 11/16/90;
4. Continued & unauthorized entry & use of the Personnel Section & property from
11/16/90 up to the present; (and)
5. Failure to report to your assigned task in the Power Plant for a period of more than
seven consecutive days from November 16, 1990 up to the present. 2
An administrative investigation was conducted; thereafter, Huyan was ordered dismissed

effective 10 December 1990.
Respondent union, on 20 December 1990, filed a notice of strike. On 02 January 1990, a strike vote
was taken where 113 out of 149 union members voted; the result showed 108 "yes" votes, 1 "no"
vote, and 4 abstentions. On 22 January 1991, the union went on strike. Forthwith, the company filed
a petition to declare the strike illegal. On 25 January 1991, upon receipt of an order from the
Secretary of Labor and Employment certifying the dispute to the NLRC, the union lifted its strike and,
on the day following, the striking employees, including Huyan, reported for work.
In its position paper and memorandum before the NLRC, the union averred that the real reason for
ordering the transfer of Huyan was to penalize him for his union activities, particularly for being the
suspected "Mao," author of the column "Red Corner," in the Union's New Digest which featured an
item on alleged wrongdoings by top company officials at the power plant; that in a letter, dated 10
October 1990, addressed by the Company's Operation Manager to the General Manager, it was
suggested that an investigation of "Mao's" real identity be conducted and, once ascertained, to have
him dismissed from the company; that the company had singled out Huyan for transfer to the power
plant; that the Personnel Manager's recommendation for such transfer was made without Huyan's
prior knowledge; that upon learning of his impending reassignment, Huyan requested for a
reconsideration but the Personnel Manager did not bother to reply, that the transfer of Huyan was a
demotion; and that, per the Company's Code Offenses, the "insubordination" charged was
punishable with dismissal only after a fourth commission of the offense.
Petitioner company, in turn, maintained that Huyan's inexplicable refusal to assume his new position
was an act of insubordination for which reason he was aptly dismissed; that the company's directive
was a valid exercise of management prerogative; that in declaring a strike, the Union, including its
officers and members, committed a serious breach of the "no strike, no lock out clause," of the
Collective Bargaining Agreement ("CBA"); and that during the strike, illegal acts were committed by
the union officers and members, e.g., —
a) . . . union director Rey Espinal blocked the service vehicle of PECO collectors
Domingo Tabobo and James Russel Balin, hurled invectives at them and challenged
them to fight.
b) . . . union (vice-president) Prescilla Napiar, together with union member Ma.

Teresa Cruz approached PECO messenger Douglas Legada . . . and snatched from
him the envelope containing . . . passbooks.
c) when PECO employees Carlos Miguel Borja and Joemar Paloma were on their
way to deliver bank passbook to PECO messengers riding in the car of Willy
Hallares, union (vice-president) Prescilla Napiar blocked their way at the gate and
demanded that the car be inspected for PECO bills. An unidentified union member
placed a big stone against the right front tire. Union auditor, Allen Aquino insisted on
inspecting the glove compartment of the car. 3
The NLRC, in its resolution of 18 October 1991, concluded:
WHEREFORE, in view of all the foregoing, we resolve as follows:
1. We find the strike conducted by the Union from January 22 to 25, 1991 to be
illegal as the same was staged in violation of the no strike, no lock-out clause in the
Collective Bargaining Agreement existing between the parties and also because the
same disregarded the grievance procedure.
2. Enrique Huyan and Prescilla Napiar are deemed to have lost their employment
status but they shall be entitled to separation benefits under the CBA, or one (1)
month pay for every year of service, whichever is higher. Further, Enrique Huyan
shall be paid the wages withheld from him, moral damages in the sum of TWENTY
FIVE THOUSAND (P25,000.00) PESOS and exemplary damages in the amount of
TEN THOUSAND (P10,000.00) PESOS.
3. Rey Espinal and Allen Aquino are penalized by suspension for THREE (3) months.
4. The other officers of the Union, namely: Nieva Glenna Abeto, Noel Orquinaza,
Alex Atutubo, Federico Anatado, and Efren Lopez are penalized with suspension for
ONE (1) month.
No pronouncement as to costs.
SO ORDERED. 4
Petitioner assails NLRC's decision insofar as it has adjudged monetary awards to private
respondents Huyan and Napiar and in not sanctioning the dismissal of other union officers and
members.
We begin by restating the well-settled rule that the findings of fact of the NLRC, except when there is
a grave abuse of discretion committed by it, are practically conclusive on this Court. It is only when
5
NLRC's findings are bereft of any substantial support from the records that the Court can step in and
proceed to make its own and independent evaluation of the facts.
In rejecting petitioner's theory, the NLRC, in a carefully considered assessment, said:
The company's contention that the decision to transfer Huyan was done in the
normal course of business cannot be sustained in the light of the attendant
circumstances.
We note that the request of the Company's Operations Manager which was used as
the basis for Huyan's transfer was made as early as June 18, 1990 but it was acted
only on October 15, 1990 as shown by the handwritten notations thereon changing
the designation of Computer Data Clerk to Report Clerk. Perhaps, it may only be a
pure coincidence that such action came a few days after the Operations Manager
made a strong recommendation to the General Manager to investigate and find out
who "MAO" is and to have him dismissed.
The company argues that, contrary to the Union's claim, Huyan was not being
singled out as shown by the fact that there was an announcement posted in all
bulletin boards of the Company inviting applications for the position of Report Clerk
at the power plant. On its face, this circumstance may indeed show bona fides on the
part of the Company. However, the announcement limited those who are qualified to
employees in the Pay Class V only and there were only 6 or 7 employees in the
entire work force that can qualify. Again, maybe it is purely coincidental that Enrique
Huyan was one of those in the Pay Class V. The point is, what is the logic and
rationale behind posting a general announcement when the Company fully knows
that only 6 or 7 out of over a hundred employees can qualify? To Our mind, the
posting of the announcement stands out as evidence of the Company's attempt to
camouflage its plan to target Huyan. Not only that, even the Company's
EDP/Personnel Manager admitted in his testimony that only Huyan had the best
qualifications among the Pay Class V employees, thus:
xxx xxx xxx
The conclusion is irresistible that even before the announcement was posted, the
Company, or at least the EDP/Personnel Manager, knew that it was Huyan who will
be transferred. After all, when the Company limited the choice to the Pay Class V
employees, it can be assumed that the Company had already reviewed their
qualifications.
That indeed the plan was directed against Huyan is made more evident by the fact
that the EDP/Personnel Manager did not even discuss the matter of the transfer with
Huyan before, and even after, making his recommendation. This circumstance does
not exactly speak well of the way the personnel policies of the company is being
managed. It simply shows that the concern for the well-being and welfare of its
employees is sorely lacking. It reduces the employees to mere pawns that can be
sacrificed whenever the Company or its managers feel like it. We cannot understand
why the Company will dispensed with this elementary courtesy on a very important
matter affecting the work and even the future of the employee. This, by itself, is more
than sufficient evidence to show the arbitrariness of the Company's decision to
transfer Huyan.
We cannot also blame Huyan if he felt, at that time, that he was being demoted. The
announcement did not state that the position of Report Clerk which was formerly Pay
Class III had already been upgraded to Pay Class V. Of course, it may be argued
that because only those employees with Pay Class V are qualified it follows that the
position of Report clerk must be at least Pay Class V. However, it is the Company's
fault that it did not clarify this matter in the announcement. Perhaps had the
EDP/Personnel Manager discussed the matter with Huyan before reassigning the
latter, the misunderstanding could have been avoided. In fact, from Huyan's letter to
the EDP/Personnel Manager, it can be deduced that he did not know about the
upgrading of the position. The least that the EDP/Personnel Manager could have
done was to clarify the matter upon receipt of Huyan's letter. However, it would
appear that the EDP/Personnel Manager was concerned of enforcing his
recommendation to transfer Huyan more than anything else.
As to the subsequent dismissal of Huyan, the grounds therefor arose out of the
disputed transfer. There was never any official written notice addressed to Huyan
concerning his reassignment. The Company's evidence consists simply of the
approved Memorandum from the EDP/Personnel Manager to the General Manager,
a copy of which was furnished to the Union and Huyan. Why no official notice was
ever given to Huyan baffles Us. Even granting for the sake of argument that such is a
mere formality, it betrays the insensitivity of the Company for its employee for it
expects him to rely on and act upon a piece of paper that is not even addressed to
him. Circumstances like this, no matter how trivial, indicate the propensity of the
Company to disregard the feelings of its employees. To top it all, the Company saw
no need to respond to Huyan's letter for reconsideration which was courteous and
respectful.
We grant that Huyan did not comply with the directives of the EDP/Personnel
Manager to transfer. However, We find that his refusal to do so was not without
reason or justification. As We see it, Huyan did not have it in his mind to be defiant,
otherwise he would not have written his superior seeking reconsideration. He had to
stand up for his rights and rightly so, considering the treatment he received. To Our
mind, therefore, in the context of the antecedent circumstances there was no serious
misconduct or willful disobedience committed by Huyan that would warrant his
dismissal. It is as if he was provoked into resisting by what he believed was an
affront to his dignity as a union officer and as a human being. Neither could there be
abandonment, as this concept is understood in termination disputes.
Be that as it may, we cannot sustain the charge of unfair labor practice against the
Company. As admitted by Huyan and the Union, the principal cause behind this
controversy is the Company's suspicion that Huyan was "MAO." That Huyan was the
Union vice-president was purely incidental. Put in another way, any employee who
was suspected of being "MAO" would have been the object of the Company's moves,
irrespective of whether that employee is a union officer or not. Huyan was not
pinpointed because he was a union officer or because the Company is anti-union but
rather because of the suspicion that he wrote the column that caught the ire of the
company's Operations Manager. No matter how detestable, the resultant moves of
the company cannot be considered unfair labor practice.
On the basis of the foregoing, we rule that while the conduct of the company cannot
be strictly considered an unfair labor practice, still, the exercise of its management
prerogative cannot be sustained. The dismissal of Enrique Huyan, is illegal.
Ordinarily, when there is a finding of illegal dismissal, under Article 279 of the Labor
Code, the employee is entitled to reinstatement and the payment of his backwages.
However, in the case at bar, we are of the opinion that reinstatement cannot be
ordered not only because of the strained relationship between the parties herein but
also because Huyan's conduct as a union officer leaves much to be desired . . . .
xxx xxx xxx
Considering also the motivations and actuations of the company in orchestrating the
transfer and dismissal of Huyan, we shall award Moral Damages in the sum of
TWENTY FIVE THOUSAND (P25,000.00) PESOS, and Exemplary Damages in the
amount of TEN THOUSAND (P10,000.00) PESOS. After all Huyan's dismissal was
tainted with bad faith and the motive of the Company for dismissing Huyan was far
from noble as shown by the circumstances surrounding the dismissal. The Company
and its managers are admonished to change their attitude and manner in dealing
with their employees, especially in matters such as this.
xxx xxx xxx
. . . The absence of good faith or the honest belief that the company is committing
Unfair Labor Practice, therefore, is what inclines us to rule that the strike conducted
by the union from January 22 to 25, 1991 is illegal for being in violation of the "no
strike, no lock-out" proviso and the failure to bring the Union's grievance under the
grievance procedure in the CBA. 6
The State guarantees the right of all workers to self-organization, collective bargaining and
negotiations, as well as peaceful concerted activities, including the right to strike, in accordance with
law. The right to strike, however, is not absolute. It has heretofore been held that a "no strike, no
7
lock-out" provision in the Collective Bargaining Agreement ("CBA") is a valid stipulation although the
clause may be invoked by an employer only when the strike is economic in nature or one which is
conducted to force wage or other concessions from the employer that are not mandated to be
granted by the law itself. It would be inapplicable to prevent a strike which is grounded on unfair
8
labor practice. In this situation, it is not essential that the unfair labor practice act has, in fact, been
committed; it suffices that the striking workers are shown to have acted honestly on an impression
that the company has committed such unfair labor practice and the surrounding circumstances could
warrant such a belief in good faith. 9
In the instant case, the NLRC found Enrique Huyan and Prescilla Napiar, the "principal leaders" of
the strike, not to have acted in good faith. The NLRC said:
It is bad enough that the Union struck despite the prohibition in the CBA. What is
worse is that its principal leaders, Napiar and Huyan, cannot honestly claim that they
were in good faith in their belief that the Company was committing unfair labor
practice. The absence of good faith or the honest belief that the Company is
committing Unfair Labor Practice, therefore, is what inclines us to rule that the strike
conducted by the Union from January 22 to 25, 1991 is illegal for being in violation of
the "no strike, no lock-out" proviso and the failure to bring the union's grievances
under the grievance procedure in the CBA. It must be borne in mind that prior to the
dismissal of Huyan, there was sufficient time to have the matter of Huyan's transfer
subjected to the grievance procedure. That the Union considered the procedure an
exercise in futility is not reason enough to disregard the same given the
circumstances in this case. Whatever wrong the Union felt the Company committed
cannot be remedied by another wrong on the part of the Union. 10
Given its own above findings, the NLRC's grant of separation benefits and damages to
Huyan and Napiar would indeed appear to be unwarranted. Article 264, Title VIII, Book V, of
the Labor Code provides that "(a)ny union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly, participates in the commission of illegal
acts during a strike may be declared to have lost his employment status."
In the case of the other union officers, however, the NLRC, having found no sufficient proof to hold
them guilty of "bad faith" in taking part in the strike or of perpetrating "serious disorders" during the
concerted activity, merely decreed suspension. We see no grave abuse of discretion by the NLRC in
this regard and in not thus ordering the dismissal of said officers.
Finally, in the case of Huyan, we sustain the NLRC in holding that he, during the period of his
illegal suspension (from 09 November 1990 when he was effectively suspended until 25 January
1991 when he, along with the striking employees, were directed by the Secretary of Labor and
Employment to return to the work premises), should be entitled to back salaries and benefits plus
moral damages, but in the reduced amount of P10,000.00, in view of the findings of the NLRC, with
which we concur, that petitioner company acted arbitrarily in its decision to transfer Huyan.
Exemplary damages, upon the other hand, are awarded only when a person acts in a wanton,
fraudulent, reckless, oppressive or malevolent manner (Art. 2232, Civil Code). NLRC's findings fall
short of the underhandedness required so as to justify this award.
WHEREFORE, all considered, the questioned decision of public respondent NLRC, dated 18
October 1991, is hereby MODIFIED in that the award of separation benefits in favor of Enrique
Huyan and Prescilla Napiar is DELETED; the award to Huyan of moral damages is REDUCED to
P10,000.00; and the grant of exemplary damages is DELETED. The decision is AFFIRMED in all
other respects. No special pronouncement on costs.
SO ORDERED.
Feliciano and Romero, JJ., concur.
Melo, J., is on leave.
Footnotes
1 Rollo, pp. 50-51.
2 Rollo, pp. 51-52.
3 Rollo, p. 276.
4 Rollo, pp. 70-71.
5 Five J Taxi vs. NLRC, 235 SCRA 556; Inter-Orient Maritime Enterprises,
Inc. vs. NLRC; 235 SCRA 268; Loadstar Shipping Co., Inc. vs. Gallo, 229
SCRA 654.
6 Rollo, pp. 56-68A.
7 Section 3, Article XIII, of the Constitution.
8 Master Iron Labor Union vs. NLRC, 219 SCRA 47.
9 See People's Industrial and Commercial Employees and Workers

Organization (FFW) vs. People's Industrial and Commercial Corporation, 112
SCRA 430, 440.
10 Rollo, p. 68-A.
SECOND DIVISION
April 19, 2017
G.R. No. 190389
MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS, Petitioner

vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY INCORPORATED, Respondent
x-----------------------x
G.R. No. 190390
MANGAGAWA NG KOMUNIKASYON SA PILIPINAS, Petitioner,

vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY INCORPORATED, Respondent.
DECISION
LEONEN, J.:
An employer's declaration of redundancy becomes a valid and authorized cause for dismissal when
the employer proves by substantial evidence that the services of an employee are more than what is
reasonably demanded by the requirements of the business enterprise. 1
This resolves the Petition for Review on Certiorari filed by Manggagawa ng Komunikasyon sa
2
Pilipinas assailing the Court of Appeals' Decision dated August 28, 2008 and Resolution dated
3 4
November 24, 2009 in CA-G.R. SP No. 94365 and CA-G.R. SP No. 98975. CA-G.R. SP No. 94365
upheld the October 28, 2005 and January 31, 2006 Resolutions of the National Labor Relations
5 6
Commission in NLRC Certified Case No. 000232-03 (NLRC NCR NS 11-405-02 & 11-412-02). In
turn, CA-G.R. SP No. 98975 upheld the Secretary of Labor and Employment's August 11, 2006
Resolution and March 16, 2007 Order.
7 8
On June 27, 2002, the labor organization Manggagawa ng Komunikasyon sa Pilipinas, which
represented the employees of Philippine Long Distance Telephone Company, filed a notice of strike
with the National Conciliation and Mediation Board. Manggagawa ng Komunikasyon sa Pilipinas
9
charged Philippine Long Distance Telephone Company with unfair labor practice "for transferring
several employees of its Provisioning Support Division to Bicutan, Taguig." 10
The first notice of strike was amended twice by Manggagawa ng Komunikasyon sa Pilipinas. On its 11
second amendment dated November 4, 2002, docketed as NCMB-NCR-NS No. 11-405-

02, Manggagawa ng Komunikasyon sa Pilipinas accused Philippine Long Distance Telephone
12
Company of the following unfair labor practices:
UNFAIR LABOR PRACTICES, to wit:
1. PLDT's abolition of the Provisioning Support Division. Such action, together with the
consequent redundancy of PSD employees and the farming out of the jobs to casuals and
contractuals, violates the duty to bargain collectively with MKP in good faith.
2. PLDT's unreasonable refusal to honor its commitment before this Honorable Office that it
will provide MKP its comprehensive plan/s with respect to personnel downsizing/
reorganization and closure of exchanges. Such refusal violates its duty to bargain collectively
with MKP in good faith.
3. PLDT's continued hiring of "contractual," "temporary," "project," and "casual" employees

for regular jobs performed by union members, resulting in the decimation of the union
membership and in the denial of the right to self-organization to the concerned employees. 13
On November 11, 2002, while the first notice of strike was pending, Manggagawa ng Komunikasyon
sa Pilipinas filed another notice of strike, docketed as NCMB-NCR-NS No. 11-412-02, and accused
14
Philippine Long Distance Telephone Company of:
UNFAIR LABOR PRACTICES, to wit:
1. PLDT's alleged restructuring of its [Greater Metropolitan Manila] Operation Services December
31, 2002 and its closure of traffic operations at the Batangas, Calamba, Davao, Iloilo, Lucena,
Malolos and Tarlac Regional Operator Services effective December 31, 2002. These twin moves
unjustly imperil the job security of 503 of MKP's members and will substantially decimate the parties'
bargaining unit. And in the light of PLDT' s previous commitment before this Honorable Office that it
will provide MKP its comprehensive plan/s with respect to personnel downsizing/reorganization and
closure of exchanges and of its more recent declaration that the Davao operator services will not be
closed, these moves are treacherous and are thus violative of PLDT's duty to bargain collectively
with MKP in good faith. That these moves were effected with PLOT paying only lip service to its
duties under Art. III, Section 8 of the parties' CBA do [sic] signifies PLDT's gross violation of said
CBA. 15
On December 23, 2002, Manggagawa ng Komunikasyon sa Pilipinas went on strike. 16

On December 31, 2002, Philippine Long Distance Telephone Company declared only 323
employees as redundant as it was able to redeploy 180 of the 503 affected employees to other
positions.
17
On January 2, 2003, the Secretary of Labor and Employment certified the labor dispute for
compulsory arbitration. The dispositive portion of the Secretary of Labor and Employment's Order
18
read as follows:
WHEREFORE, FOREGOING PREMISES CONSIDERED, this Office hereby CERTIFIES the labor
dispute at the Philippine Long Distance Telephone Company to the National Labor Relations
Commission (NLRC) for compulsory arbitration pursuant to Article 263 (g) of the Labor Code, as
amended.
Accordingly, the strike staged by the Union is hereby enjoined. All striking workers are hereby
directed to return to work within twenty four (24) hours from receipt of this Order, except those who
were terminated due to redundancy. The employer is hereby enjoined to accept the striking workers
under the same terms and conditions prevailing prior to the strike. The parties are likewise directed
to cease and desist from committing any act that might worsen the situation.
Let the entire records of the case be forwarded to the NLRC for its immediate and appropriate
action.
SO ORDERED. 19
Manggagawa ng Komunikasyon sa Pilipinas filed a Petition for Certiorari before the Court of

Appeals, challenging the Secretary of Labor and Employment's Order insofar as it created a
distinction among the striking workers in the return-to-work order. The petition was docketed as CA-
G.R. SP No. 76262. 20
On November 25, 2003, the Court of Appeals granted the Petition for Certiorari, setting aside and
nullifying the Secretary of Labor and Employment's assailed Order. 21
The Philippine Long Distance Telephone Company appealed the Court of Appeals' Decision to this
Court. The appeal was docketed as G.R. No. 162783. 22
On July 14, 2005, this Court upheld the Court of Appeals' Decision, and directed Philippine Long
23
Distance Telephone Company to readmit all striking workers under the same terms and conditions
prevailing before the strike. This Court held:
As Article 263(g) is clear and unequivocal in stating that ALL striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and readmit ALL
workers under the same terms and conditions prevailing before the strike or lockout, then the
unmistakable mandate must be followed by the Secretary. 24
On October 28, 2005, the National Labor Relations Commission dismissed Manggagawa ng
Komunikasyon sa Pilipinas' charges of unfair labor practices against Philippine Long Distance
Telephone Company. 25
The National Labor Relations Commission held that Philippine Long Distance Telephone Company's
redundancy program in 2002 was valid and did not constitute unfair legal practice. The redundancy
26
program was due to the decline of subscribers for long distance calls and to fixed line services
produced by technological advances in the communications industry. The National Labor Relations
27
Commission ruled that the termination of employment of Philippine Long Distance Telephone
Company's employees due to redundancy was legal. The dispositive portion of the National Labor
28
Relations Commission's Resolution read:
WHEREFORE, premises considered, the Union[']s charge of unfair labor practice against PLDT is
ordered DISMISSED for lack of merit.
SO ORDERED. 29
On January 31, 2006, the National Labor Relations Commission denied Manggagawa ng
Komunikasyon sa Pilipinas' motion for reconsideration. 30
On May 8, 2006, Manggagawa ng Komunikasyon sa Pilipinas filed a Petition for Certiorari with the
31
Court of Appeals. The petition was docketed as CA-G.R. SP No. 94365, and it assailed the National
Labor Relations Commission's resolutions, which upheld the validity of Philippine Long Distance
Telephone Company's redundancy program. 32
On August 11, 2006, the Secretary of Labor and Employment dismissed Manggagawa ng
Komunikasyon sa Pilipinas' Motion for Execution of this Court's July 14, 2005 Decision.
33 34
On March 16, 2007, the Secretary of Labor and Employment denied Manggagawa ng
35
Komunikasyon sa Pilipinas' motion for reconsideration. 36
On May 21, 2007, Manggagawa ng Komunikasyon sa Pilipinas filed a Petition for Certiorari before 37
the Court of Appeals, assailing the August 11, 2006 Resolution and March 16, 2007 Order of the
Secretary of Labor and Employment. The petition was docketed as CA-G.R. SP No. 98975.
The Court of Appeals consolidated CA-G.R. SP No. 94365 with CAG.R. SP No. 98975, and
dismissed Manggagawa ng Komunikasyon sa Pilipinas' appeals on August 28, 2008. 38
For CA-G.R. SP No. 94365, the Court of Appeals ruled that the National Labor Relations
Commission did not commit grave abuse of discretion when it found that Philippine Long Distance
Telephone Company's declaration of redundancy was justified and valid, as the redundancy program
was based on substantial evidence. 39
The Court of Appeals also found that Philippine Long Distance Telephone Company's 2002
declaration of redundancy "was not attended by [unfair labor practice] . . . [because it was]
transparent and forthright in its implementation of the redundancy program." Philippine Long
40
Distance Telephone Company also successfully redeployed 180 of the 503 affected employees to
other positions.
41
As for CA-G.R. SP No. 98975, the Court of Appeals confirmed that its assailed order of
reinstatement indicated that all employees, even those declared separated effective December 31,
2002, should be reinstated pendentelite. However, the Court of Appeals stated that the order of
42
reinstatement became moot due to the National Labor Relations Commission's October 28, 2005
Decision, which upheld the validity of the dismissal of the employees affected by the redundancy
program.43
The Court of Appeals also denied Manggagawa ng Komunikasyon sa Pilipinas' prayer that:
[T]he affected employees should at least be paid their salaries during the period from January 3,
2003 (the working day immediately following the effectivity of their separation) to April 29, 2006 (the
date when the October 28, 2005 decision of the NLRC (declaring the employees' dismissal as valid)
became final and executory). 44
The Court of Appeals compared the case to an illegal dismissal case where the Labor Arbiter found
for the employee and ordered the payroll reinstatement of the employee; however, the finding of
illegality was later reversed on appeal. 45
The dispositive portion of the Court of Appeals' Decision read:
WHEREFORE, the PETITIONS FOR CERTIORARI IN CA-G.R. SP Nos. 94365 and 98975 are
DISMISSED for lack of merit.
SO ORDERED. (Emphasis in the original)

46
On November 24, 2009, the Court of Appeals denied Manggagawa ng Komunikasyon sa Pilipinas'
motion for reconsideration.47
In its Petition for Review on Certiorari, Manggagawa ng Komunikasyon sa Pilipinas states that
employees in the Provisioning Support Division and in the Operator Services Section had their
positions declared redundant in 2002. Manggagawa ng Komunikasyon sa Pilipinas asserts that the
48
total number of rank-and-file positions actually declared redundant was 538, or 35 positions in the
Provisioning Support Division and 503 positions in the Operator Services Section. 49
Manggagawa ng Komunikasyon sa Pilipinas maintains that Philippine Long Distance Telephone

Company failed to submit evidence in support of its declaration of redundancy of the 35 rank-and-file
employees in the Provisioning Support Division. It claimed that "[Philippine Long Distance
50
Telephone Company] only notified [the Department of Labor and Employment] of the 'closure of
traffic operations at Regional Operator Services affecting three hundred ninety-two (392) employees
and the restructuring of [Greater Metropolitan Manila] Operator Services affecting one hundred
eleven (111) employees."' Manggagawa ng Komunikasyon sa Pilipinas asserts that there was no
51
notice given regarding the closure of Philippine Long Distance Telephone Company's Provisioning
Support Division, and the termination of employment due to redundancy of the affected rank-and-file
employees. It points out that the justifications for the redundancy put forth by Philippine Long
52
Distance Telephone Company "only pertained to the affected operator services positions and not the
affected [Provisioning Support Division] positions." 53
Manggagawa ng Komunikasyon sa Pilipinas also maintains that the National Labor Relations
Commission committed grave abuse of discretion when it disallowed the written interrogatories that
Manggagawa ng Komunikasyon sa Pilipinas submitted. 54
As for the issue of reinstatement pendente lite, Manggagawa ng Komunikasyon sa Pilipinas cites
Garcia v. Philippine Airlines, Inc. to bolster its stand. It holds that an employee is entitled to
55
reinstatement or backwages pending appeal if the Labor Arbiter's finding of illegal dismissal is later
on reversed by the National Labor Relations Commission. 56
For its part, Philippine Long Distance Telephone Company claims that the validity of redundancy of
the affected Provisioning Support Division employees was only raised by Manggagawa ng
Komunikasyon sa Pilipinas for the first time on appeal. Philippine Long Distance Telephone
57
Company asserts that the real issue in that case was whether Philippine Long Distance Telephone
Company was obligated to transfer the affected Provisioning Support Division employees, and not
whether their redundancies were valid. Philippine Long Distance Telephone Company maintains
58
that the affected Provisioning Support Division personnel were given the opportunity to apply for
another division, yet they chose not to. 59
Philippine Long Distance Telephone Company avers that Manggagawa ng Komunikasyon sa

Pilipinas' resort to interrogatories has been denied with finality by the Court of Appeals. It also
60
claims that the National Labor Relations Commission's Rules of Procedure do not allow the use of
discovery proceedings; thus, Manggagawa ng Komunikasyon sa Pilipinas cannot assert that their
resort to interrogatories is a matter of procedural right. 61
Philippine Long Distance Telephone Company states that neither the Court of Appeals nor the
Supreme Court ordered the reinstatement of Manggagawa ng Komunikasyon sa Pilipinas' members,
since their decisions set aside Secretary of Labor and Employment's January 2, 2003 Order. The 62
order enjoined the striking workers to return to work, except those who were terminated due to
redundancy. Philippine Long Distance Telephone Company asserts that "what controls execution
63
is the dispositive or decretal statement of the [d]ecision sought to be executed." Furthermore,

64
Philippine Long Distance Telephone Company maintains that the Court of Appeals correctly ruled
that the reinstatement of the excluded employees was rendered moot when the National Labor
Relations Commission upheld its redundancy program. 65
Finally, Philippine Long Distance Telephone Company holds that Garcia is not applicable because
the case at bar does not involve a reinstatement award by a Labor Arbiter. 66
We resolve the following issues:
First, whether the Court of Appeals committed grave abuse of discretion in upholding the validity of
Philippine Long Distance Telephone Company's 2002 redundancy program; and
Second, whether the return-to-work order of the Secretary of Labor and Employment was rendered
moot when the National Labor Relations Commission upheld the validity of the redundancy program.
The Petition is partly meritorious.
A petition for review on certiorari under Rule 45 is a mode of appeal where the issue is limited only
to questions of law. In labor cases, a Rule 45 petition "can prosper only if the Court of Appeals ...
67
fails to correctly determine whether the National Labor Relations Commission committed grave
abuse of discretion."68
A court or tribunal is said to have acted with grave abuse of discretion when it capriciously acts or
whimsically exercises judgment to be "equivalent to lack of jurisdiction." Furthermore, the abuse of
69
discretion must be so flagrant to amount to a refusal to perform a duty or to act as provided by law. 70
Career Philippines Shipmanagement, Inc. v. Serna, citing Montoyav. Transmed, provides the

71 72
parameters of judicial review for a labor case under Rule 45:
As a rule, only questions of law may be raised in a Rule 45 petition. In one case, we discussed the
particular parameters of a Rule 45 appeal from the CA's Rule 65 decision on a labor case, as
follows:
In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the
review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the
review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we
have to view the CA decision in the same context that the petition for certiorari it ruled upon was
presented to it; we have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not
on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the
NLRC decision challenged before it. (Emphasis in the original)
73
Justice Arturo D. Brion's dissent in AbbotLaboratories, Philippinesv. Alcaraz thereafter laid down

74
the guidelines to be followed in reviewing a petition for review under Rule 45:
If the NLRC ruling has basis in the evidence and the applicable law and jurisprudence, then no grave
abuse of discretion exists and the CA should so declare and, accordingly, dismiss the petition. If
grave abuse of discretion exists, then the CA must grant the petition and nullify the NLRC ruling,
entering at the same time the ruling that is justified under the evidence and the governing law, rules
and jurisprudence. In our Rule 45 review, this Court must deny the petition if it finds that the CA
correctly acted. (Emphasis in the original)
75
We shall adopt these parameters in resolving the substantive issues in the Petition.
II
Redundancy is one of the authorized causes for the termination of employment provided for in
Article 298 of the Labor Code, as amended:
76
Article 298. Closure of Establishment and Reduction of Personnel. - The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at
least one (1) month before the intended date thereof. In case of termination due to the installation of
labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation
of operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
Wiltshire File Co. Inc. v. National Labor Relations Commission has explained that redundancy
77
exists when "the services of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise." 78
While a declaration of redundancy is ultimately a management decision in exercising its business

judgment, and the employer is not obligated to keep in its payroll more employees than are needed
for its day to-day operations, management must not violate the law nor declare redundancy without
79
sufficient basis.
80
Asian Alcohol Corporation v. National Labor Relations Commission listed down the elements for the
81
valid implementation of a redundancy program:

For the implementation of a redundancy program to be valid, the employer must comply with the
following requisites: (1) written notice served on both the employees and the Department of Labor
and Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished. (Citations omitted)
82
To establish good faith, the company must provide substantial proof that the services of the
employees are in excess of what is required of the company, and that fair and reasonable criteria
were used to determine the redundant positions. 83
In order to prove the validity of its redundancy program, Philippine Long Distance Telephone
Company has presented data on the decreasing volume of the received calls by the Operator
Services Center for the years 1996 to 2002: 84
RECEIVED CALLS
YEAR 108 109 TOTAL
1996 33,641,751 430,125,633 463,767,384
1997 34,834,800 318,942,573 353,777,373
1998 28,651,703 209,458,041 238,109,744
1999 24,797,870 212,363,846 237,161,716
2000 21,697,367 218,380,277 240,077,644
2001 15,773,988 158,310,276 174,084,264
2002 14,363,918 114,430,469 128,794,387
Philippine Long Distance Telephone Company has stated that "from f 1996 to 2002, the [t]otal
[d]emand of [c]alls dropped by 334,972,997 or a 72% reduction." It has attributed the reduction of
85
demand for operator-assisted 108/109 calls to "migration calls to direct distance dialing," and to
"more usage/substitution of text message over voice." It has added that "migration of calls from
86
landline to cell," competitors' eating into the Philippine Long Distance Telephone Company's market,
and "compliance with the regulatory requirement of local integration per province" likewise d
aggravated the situation.87
Philippine Long Distance Telephone Company claims that the pattern of decline with operator-
assisted calls has been consistent through the years, 88 and it has summarized the challenges
facing its long distance services as follows:
(a) international long distance revenues in 2001 stood at ₱11.4 billion; in 2002, this declined
to ₱10.6 billion (pg. 33, PLDT's Financial Statement and Annual Report; Annex "4-A") - a
decrease of ₱813 million. More drastically, this figure stood at ₱18.2 billion in 1997,
indicating that international long distance call revenue has declined to the tune of P8 billion
in five years!
(b) national long distance revenues in 2001 were ₱8 .3 88 billion in 2001; in 2002, this
declined to ₱7.6 billion (pg. 35, PLDT's Financial Statement and Annual Report; Annex ''4-
B") - a decrease of ₱719 million. As with international calls, there is a pattern on decline:
PLDT earned ₱10.6 billion from this service in 2000, so it is accurate to say that the
company has seen revenue from national long distance decline by more than a billion pesos
a year. 89
The National Labor Relations Commission has found that Philippine Long Distance Telephone
Company was able to discharge its burden of proving that its redundancy measures had substantial
basis:
Guided by the foregoing jurisprudence, it is evident that PLDT discharged the burden of proving that
the declaration or implementation of redundancy measures have basis. For one, PLDT experienced
a decline of subscribers, long distance calls, operated both local and abroad, has declined, landline
or fixed line services also declined. This decrease of the need of PLDT services resulted from the
advent of wireless telephone, of texting as means of communication, the use of direct dialing
including prepaid telesulit and teletipid measures introduced in the communication services. For
another, PLDT has a debt burden of ₱70 billion pesos and it cannot subsidize the salaries of
employees whose positions are redundant. 90
The Court of Appeals echoed the findings of the National Labor Relations Commission regarding the
validity of Philippine Long Distance Telephone Company's redundancy measures:
We find that MKP demonstrated no such patent and gross evasion of a positive duty on the part of
the NLRC. On the contrary, the NLRC's finding that the 2002 redundancy declaration of PLDT was
justified and valid rested on substantial evidence, for the NLRC ostensibly based its finding on
established facts showing the decline of subscribers, the decline in long distance local and
international calls, and the decline in landline or fixed line services, constraining PLDT to declare
certain positions redundant. There could be no question that such factual circumstances were
traceable to "the advent of wireless telephone, of texting as a means of communication, the use of
direct dialing including prepaid telesulit and teletipid measures introduced in the communication
services."
As such, the NLRC did not commit any grave abuse of discretion when it regarded the technological
advancements resulting in less work for the redundated employees as justifying PLDT's declaration
of redundancy. 91
This Court sees no reason to depart from the findings of the Court of Appeals and of the National
Labor Relations Commission.
Philippine Long Distance Telephone Company's declaration of redundancy was backed by

substantial evidence showing a consistent decline for operator-assisted calls for both local and
international calls because of cheaper alternatives like direct dialing services, and the growth of
wireless communication. Thus, the National Labor Relations Commission did not commit grave
abuse of discretion when it upheld the validity of PLDT's redundancy program. Redundancy is
ultimately a management prerogative, and the wisdom or soundness of such business judgment is
not subject to discretionary review by labor tribunals or even this Court, as long as the law was
followed and malicious or arbitrary action was not shown. 92
III
Nonetheless, there is a need to review the redundancy package awarded to the employees
terminated due to redundancy. For either redundancy or retrenchment, the law requires that the
employer give separation pay equivalent to at least one (1) month pay of the affected employee, or
at least one (1) month pay for every year of service, whichever is higher. The employer must also
serve a written notice on both the employees and the Department of Labor and Employment at least
one (1) month before the effective date of termination due to redundancy or retrenchment. 93
While we agree that Philippine Long Distance Telephone Company complied with the notice
requirement, the same cannot be said as regards the separation pay received by some of the
affected workers.
Philippine Long Distance Telephone Company claims that most employees who were declared
redundant received a very generous separation package or "as much as 2.75 months [worth of
salary] for every year of service, with the average separation package at [₱]586,580.27." However,
94
the records belie its claims as shown by the notice of termination of employment received by the
workers affected by the redundancy program:
November 25, 2002
MYRNA C. CASTRO
OPERATOR SERVICES-NORTH
Dear Ms. Castro:
After a thorough review of operations, Management has determined that there is a need to reduce its
manpower requirements considering technological, organization, and process developments. This
reduction is inevitable to ensure the company's survival in the long term.
Your position is one of those affected by such changes and developments. Thus, with much regret,
your service to the company will be considered completed by December 30, 2002.
In recognition of your loyalty and dedicated service, the company is granting a generous separation
pay package that will assist you in making the necessary adjustments to your new situation.
This separation package consists of your regular retirement benefits plus 75% of basic monthly pay
for every year of service, or a minimum of 175% of basic monthly pay for every year of service for
employees with less than 15 years of service.
Counseling service on financial options in the future will be available to assist you during your period
of adjustment.
We would like to take this opportunity to thank you for your service to the Company and wish you
well in all your future undertakings.
Very truly yours,
PHILIPPINE LONG DISTANCE TELEPHONE CO., INC
(signed)
ERLINDA S. KABIGTING 95
(Emphasis supplied)
The notices of termination of employment96 signed by Erlinda S. Kabigting, Philippine Long
Distance Telephone Company Vice-President for Operator Services Section, provided two (2) types
97
of separation packages for the terminated workers. These were: (1) regular retirement benefits plus
75% basic monthly pay for every year of service for employees who had been with Philippine Long
Distance Telephone Company for more than 15 years; and (2) 175% of basic monthly pay for every
year of service for employees who had been with PLDT for less than 15 years.
When an employer declares redundancy, Article 298 of the Labor Code requires that the employer
provides a separation pay equivalent to at least one (1) month pay of the affected employee, or at
least one (1) month pay for every year of service, whichever is higher.98 In this case, Philippine
Long Distance Telephone Company claims that the terminated workers received a generous
separation package of about 2.75 months' worth of salary for every year of service. But it seems that
the retirement benefits of the terminated workers were added to the separation pay due them, hence
the large payout. This should not be the case.
Aquino v. National Labor Relations Commission differentiated between separation pay and
99
retirement benefits:
Separation pay is required in the cases enumerated in Articles 283 and 284 of the Labor Code,
which include retrenchment, and is computed at at least one month salary or at the rate of one-half
month salary for every month of service, whichever is higher. We have held that it is a statutory right
designed to provide the employee with the wherewithal during the period that he is looking for
another employment.
Retirement benefits, where not mandated by law, may be granted by agreement of the employees
and their employer or as a voluntary act on the part of the employer. Retirement benefits are
intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying
for his financial support, and are a form of reward for his loyalty and service to the
employer. (Citation omitted)
100
Separation pay brought about by redundancy is a statutory right, and it is irrelevant that the
retirement benefits together with the separation pay given to the terminated workers resulted in a
total amount that appeared to be more than what is required by the law. The facts show that instead
of the legally required one (1) month salary for every year of service rendered, the terminated
workers who were with Philippine Long Distance Telephone Company for more than 15 years
received a separation pay of only 75% of their basic pay for every year of service, despite the clear
wording of the law.
The workers, who were terminated from employment as a result of redundancy, are entitled to the
separation pay due them under the law.
IV
Department of Labor and Employment Secretary Patricia A. Sto. Tomas (Secretary Sto. Tomas)
assumed jurisdiction over the labor dispute between Manggagawa ng Komunikasyon sa Pilipinas
and Philippine Long Distance Telephone Company pursuant to Article. 278(g) of the Labor Code.
101
She certified the case to the National Labor Relations Commission for compulsory arbitration. This
102
return-to-work order from the Secretary of Labor and Employment aims to preserve the
status quoante while the validity of the redundancy program is being threshed out in the proper
103
forum.
In Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor, pending resolution of
104
the legality of the· strike, the Secretary of Labor and Employment directed the employer to accept all
the striking workers except the Union Officers, shop stewards, and those with pending criminal
charges. This Court struck down the Secretary of Labor and Employment's order for being issued
105
with grave abuse of discretion, 106 and directed the employer to accept all the striking workers
without l qualifications. 107
The ruling in Telefunken cannot be applied to the case at bar.
In Philippine Long Distance Telephone Co. Inc. v. Manggagawa ng Komunikasyon sa

Pilipinas, which was promulgated on July 14, 2005, this Court struck down the return-to-work order
108
dated January 2, 2003 issued by Secretary Sto. Tomas for being tainted with grave abuse of
discretion. We ruled that the return-to-work order should have included all striking workers, and
should not have excluded the workers affected by the redundancy program. However, barely three
109
(3) months after Philippine Long Distance Telephone Co. Inc. 's promulgation, the National Labor
Relations Commission in its October 28, 2005 Resolution upheld the validity of Philippine Long
110
Distance Telephone Company's redundancy program. This resolution also dismissed the charges of
unfair labor practice, and illegal dismissal against Philippine Long Distance Telephone Company. 111
When petitioner filed its Motion for Execution on January 17, 2006 pursuant to this Court's ruling
112
in Philippine Long Distance Telephone Co. Inc., there was no longer any existing basis for the
return-to-work order. This was because the Secretary of Labor and Employment's return-to-work
order had been superseded by the National Labor Relations Commission's Resolution. Hence, the
Secretary of Labor and Employment did not err in dismissing the motion for execution on the ground
of mootness.
Petitioner cites Garcia v. Philippine Airlines to support its claim that the affected and striking
113
workers are entitled to reinstatement and backwages from January 2, 2003, when Secretary Sto.
Tomas directed the striking workers to return to work, up to April 29, 2006, when the National Labor
Relations Commission's Resolution upholding Philippine Long Distance Telephone Company's
redundancy program became final and executory. 114
Petitioner is mistaken.
Garcia upholds the prevailing doctrine that even if a Labor Arbiter's order of reinstatement is
reversed on appeal, the employer is obligated "to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court." 115
There is no order of reinstatement from a Labor Arbiter in the case at bar, instead, what is at issue is
the return-to-work order from the Secretary of Labor and Employment. An order of reinstatement is
different from a return-to-work order.
The award of reinstatement, including backwages, is awarded by a Labor Arbiter to an illegally

dismissed employee pursuant to Article 294116 of the Labor Code:
Article 294. Security of Tenure. - In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights
and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. (Emphasis supplied)
If actual reinstatement is no longer possible, the employee becomes entitled to separation pay in lieu
of reinstatement.
117
On the other hand, a return-to-work order is issued by the Secretary of Labor and Employment when
he or she assumes jurisdiction over a labor dispute in an industry that is considered indispensable to
the national interest. Article 278(g) of the Labor Code provides that the assumption and certification
of the Secretary of Labor and Employment shall automatically enjoin the intended or impending
strike. When a strike has already taken place at the time the Secretary of Labor and Employment
assumes jurisdiction over the labor dispute, all striking employees shall immediately return to work.
Moreover, the employer shall immediately resume operations, and readmit all workers under the
same terms and conditions prevailing before the strike.
Return-to-work and reinstatement orders are both immediately executory; however, a return-to-work
order is interlocutory in nature, and is merely meant to maintain status quo while the main issue is
being threshed out in the proper forum. In contrast, an order of reinstatement is a judgment on the
merits handed down by the Labor Arbiter pursuant to the original and exclusive jurisdiction provided
for under Article 224(a) of the Labor Code. Clearly, Garcia is not applicable in the case at bar, and
118
there is no basis to reinstate the employees who were terminated as a result of redundancy.
WHEREFORE, premises considered, the Petition is PARTIALLY GRANTED. The Court of Appeals'
August 28, 2008 Decision and November 24, 2009 Resolution in CA-G.R. SP No. 94365 and CA-
G.R. SP No. 98975 are AFFIRMED with MODIFICATION. Private respondent Philippine Long
Distance Telephone Company, Inc. is DIRECTED to pay the workers affected by its 2002
redundancy program and who had been employed for more than fifteen (15) years prior to their
dismissal, the balance of the separation pay due them or a sum equivalent to twenty-five percent
(25%) of their basic monthly pay for every year of service with Philippine Long Distance Telephone
Company, Inc.
A legal interest of 6% per annum shall be imposed on the total judgment award from the finality of
this Decision until its full satisfaction.
SO ORDERED.
MARVIC M.V.F. LEONEN,

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA JOSE CATRAL MENDOZA

SAMUEL R. MARTIRES
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation,
I certify that the conclusions in the above Decision had been reached in consultation before the case

Chief Justice
Footnotes
1
Wiltshire File Co. Inc. v. National Labor Relations Commission, 271 Phil. 694, 703 (1991)
[Per J. Feliciano, Third Division].
2
Rollo, pp. 9-48. Id. at 50-60.
The Decision was penned by Associate Justice Lucas P. Bersamin and concurred in by
3
Associate Justices Estela M. Perlas-Bernabe and Ramon M. Bato, Jr. of the Seventeenth
Division, Court of Appeals, Manila.
Id. at 62-63. The Resolution was penned by Associate Justice Ramon M. Bato, Jr. and
4
concurred in by Associate Justices Josefina Guevara-Salonga and Estela M. Perlas-Bernabe

of the Special Former Seventeenth Division, Court of Appeals, Manila.
5
Id.at96-113.
6
Id. at 115-116.
7
Id. at 669-670.
8
Id. at 671-673.
9
Id. at 51.
10
Id.
11
Id. at 51-52.
12
Id. at 272.
Id.
13
Id. at 273-274.
14
Id. at 273.
15
Id. at 52.
16
Id.
17
Id. at 821-823, Order.

18
Id. at 822-823.
19
Id. at 52.
20
Id. at 660-668. The Decision was penned by Associate Justice Andres B. Reyes, Jr. and
21
concurred in by Associate Justices Buenaventura J. Guerrero and Regalado E. Maambong

of the Second Division, Court of Appeals, Manila.
Id. at 53.
22
501 Phil. 704 (2005) [Per J. Chico-Nazario, Second Division].

23
Id.at719.
24
Id. at 96-113, Resolution.

25
Id. at 109-110.
26
Id.
27
Id. at 112-113.
28
Id. at 113.
29

30
Id. at 64-94.
31
Id. at 54.
32
Id. at 674-677.
33

34
Id. at 671--673, Order.

35
Id. at 678--686.
36
Id. at 631-657.
37
Id. at 50--60.
38
Id. at 56.
39
Id. at 57.
40
Id.
41
Id. at 59.
42
Id.
43
Id.
44
Id. at 59-60.
45
Id. at 60.
46
Id. at 62-63.
47
Id. at 31.
48
Id.
49
Id. at 1098, MKP Memorandum. The memorandum mistakenly reported this as 335 rank-
50
and-file employees.
Id. at 1098-1099.
51
Id. at 1099.
52
Id.
53
Id.at1101-1107.
54
596 Phil. 510 (2009) [Per J. Carpio Morales, En Banc].

55
Rollo, p. 39.
56
Id. at 795-796, Comment.

57
Id. at 797, Comment.

58
Id. at 1038, PLDT Memorandum.

59
Id. at 798-804, Comment.

60
Id. at 1052, PLDT Memorandum.
61
Id. at 1056-1057.
62
Id. at 1056.
63
Id. at 1057.
64
Id. at 1063.
65
Id. at 1064-1065.
66
RULES OF COURT, Rule 45, sec. 1 provides:

67
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from
a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law, may file with the Supreme
Court a verified petition for review on certiorari. The petition shall raise only questions of law
which must be distinctly set forth.
Philippine Airlines v. Dawal, G.R. Nos. 173921 and 173952, February 24, 2016 [Per J.
68
Leonen, Second Division].
Hongkong Shanghai Banking Corporation Employees Union v. National Labor Relations

69
Commission, 421 Phil. 864, 870 (2001) [Per J. Sandoval-Gutierrez, Third Division].
Id.
70
700 Phil. 1 (2012) [Per J. Brion, Second Division].

71
613 Phil. 696 (2009) [Per J. Brion, Second Division].

72
Career Philippines Ship management, Inc. v. Serna, 700 Phil. 1, 9 (2012) [Per J. Brion,
73
Second Division], citing Montoya v. Transmed Manila Corporation, 613 Phil. 696, 707 (2009)
[Per J. Brion, Second Division].
714 Phil. 510 (2013) [Per J. Perlas-Bernabe, En Banc].

74
Dissenting Opinion of J. Brion in Abolt Laboratories, Philippines v. Alcaraz, 714 Phil. 510,
75
549 (2013) [Per J. Perlas-Bernabe, En Banc].
Article 298 was formerly Article 283, before it was renumbered by DOLE Department
76
Advisory No. 1, Series of 2015.
271 Phil. 694 (1991) [Per J. Feliciano, Third Division].

77
Id. at 703.
78
Id.
79
General Milling Corp. v. Viajar, 702 Phil. 532, 543 (2013) [Per J. Reyes, First Division].
80
364 Phil. 912 (1999) [Per J. Puno, Second Division].

81
Id. at 930.
82
General Milling Corp. v. Viajar, 702 Phil. 532, 543 (2013) [Per J. Reyes, First Division].
83
Rollo, p. 412.
84
Id. at 413.
85
Id.
86
Id.
87
Id. at 260, PLDT Position Paper.

88
Id. at 261-262.
89

90
Id. at 56.
91
Wiltshire File Co., Inc. v National Labor Relations Commission, 271 Phil. 694, 703-704
92
(1991) [Per J. Feliciano, Third Division].
LABOR CODE, art. 298.

93
Rollo, p. 1049, PLDT Memorandum.

94
Id. at 496.
95
Id. at 479-557.
96
Id. at 55.
97
LABOR CODE, art. 298 provides: Article 298. Closure of Establishment and Reduction of
98
Personnel. - The employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the establishment or undertaking unless the closing is for
the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least
one-half (1 /2) month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered one (I) whole year.
283 Phil. 1 (1992) [Per J. Cruz, First Division].

99
100
Id. at 6.
LABOR CODE, art. 278 provides: Article 278 - Strikes, Picketing and Lockouts- (g) When,
101
in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
same.
102
Rollo, pp. 821-823. Order.
YSS Employees Union-Philippine Transport and General Workers Organization v YSS

103
Laboratories, Inc. 622 Phil. 201, 212-213 (2009) [Per J. Chico-Nazario, Third Division].
104
347 Phil. 447 (1997) [Per J. Bellosillo, First Division].
105
Id. at 456.
106
Id.
107
Id. at 461.
108
501 Phil. 704 (2005) [Per J. Chico-Nazario, Second Division].
109
Id.at715.
110
Rollo, pp. 96-113.
111
Id. at 112-113.
112
Id. at 674-677.
113
596 Phil. 510 (2009) [Per J. Carpio Morales, En Banc].
114
Rollo, p. 1108.
115
Garcia v Philippine Airlines, 596 Phil. 510, 536 (2009) [Per J. Carpio Morales, En Banc].
Art. 294 was formerly Art. 279, before it was renumbered by DOLE Department Advisory
116
No. 1, Series of 2015.
Golden Ace Builders, et al. v. Ta/de, 634 Phil. 364, 370 (2010) [Per J. Carpio Morales,
117
First Division].
Art. 224 was formerly Art. 217, before it was renumbered by the DOLE Department
118
Advisory No. 1, Series of 2015. LABOR CODE, art. 224 provides: Art. 224. Jurisdiction of the
Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural: (1) Unfair labor practice cases; (2)
Termination disputes; (3) If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and other terms and conditions
of employment; (4) Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations; (5) Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of strikes and lockouts; and (6) Except
claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The
Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters. (c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
119
Nacar v. Gallery Frames, 716 Phil 267, 282-283 (2013) [Per J. Peralta, En Banc].

SUPREME COURT
Manila
SPECIAL THIRD DIVISION
G.R. No. 160138 January 16, 2013
AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL, LOURDES T.

INDUCIL, JOCELYN T. INDUCIL and MA. CONCEPCION I. DONATO, Petitioners,
vs.
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E.
AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ,
RODOLFO MAINIT, JR., FROILAN B. MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R.
NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA,
WILLIAM A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO LUMBAO, JR., and
RENATO SARABUNO, Respondents.
x-----------------------x
G.R. No. 160192
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E.

AGUSTIN, RUPERTO M. MARIANO II, EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ,
RODOLFO MAINIT, JR., FROILAN B. MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R.
NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA BUENA, JR., HERMINIO P. PAPA,
WILLIAM A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C. CAAMPUED,
ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO LUMBAO, JR., and RENA
TO SARABUNO, Petitioners,
vs.
AUTOMOTIVE ENGINEREBUILDERS, INC., and ANTONIO T. INDUCIL, Respondents.
RESOLUTION
MENDOZA, J.:
For resolution is the Motion for Partial Reconsideration filed by Progresibong Unyon Ng Mga
Manggagawa Sa AER (Unyon) which questioned the Court’s July 13, 2011 Decision insofar as it
failed to award backwages to fourteen (14) of its members. The decretal portion of the decision
reads:
WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be
reinstated without backwages. If reinstatement is no longer feasible, the concerned employees
should be given separation pay up to the date set for their return in lieu of reinstatement.1
In arriving at said determination, the Court found out both parties were at fault or in pari delicto and
must bear the consequences of their own wrongdoing.2 Thus, it decreed that the striking employees
must be restored to their respective positions prior to the illegal strike and illegal lockout.
Records disclose that this labor controversy started when both parties filed charges against each
other, blaming the other party for violating labor laws. Thirty-two (32) employees filed and signed a
complaint,3 dated February 18, 1999, against Automotive Engine Rebuilders, Inc. (AER). The
complaint prayed that AER be declared guilty of Unfair Labor Practices, Illegal Dismissal, Illegal
Suspension, and Run-away shop; that the complainants be reinstated; and that they be paid "full
backwages and without loss of seniority rights and privileges, payment of wages during suspension,
plus moral and exemplary damages and attorney’s fees."4
The names of the 32 complaining employees are as follows:
1. Felino Agustin
2. Ruperto Mariano II
3. Eduardo Brizuela
4. Otilio Rabino
5. Arnold Rodriguez
6. Froilan Madamba
7. Ferdinand Flores
8. Jonathan Taborda
9. Rodolfo Mainit, Jr.
10. Danilo Quiboy
11. Christopher Nolasco
12. Roger Belatcha
13. Claud Moncel
14. Cleofas dela Buena, Jr.
15. Edwin Mendoza
16. Herminio Papa
17. Oscar Macaranas
18. William Ritual
19. Roberto Caldeo
20. Rafael Gacad
21. James Caampued
22. Esperidion Lopez, Jr.
23. Frisco Lorenzo, Jr.
24. Bernardino Acosta, Jr.
25. Benson Pingol
26. Tammy Punsalan
27. Edward Ferrancol
28. Crisanto Lumbao, Jr.
29. Arnold Villota
30. Menching Mariano, Jr.

31. Carlos Carolino
32. Renato Sarabuno
Out of the 32, six (6) resigned and signed waivers and quitclaims, namely:
1. Oscar Macaranas
2. Bernardino Acosta
3. Ferdinand Flores
4. Benson Pingol
5. Otillo Rabino
6. Jonathan Taborda
On the other hand, the earlier complaint5 filed by AER against Unyon and eighteen (18) of its
members for illegal concerted activities prayed that, after notice and hearing, judgment be rendered
as follows:
1. Finding respondents guilty of unfair labor practice and illegal concerted activity;
2. Finding respondents guilty of abandonment of work, serious misconduct, gross disrespect,

commission of felonies against the complainant and their respective officers, threats,
coercion and intimidation;
3. Penalizing complainants with dismissal and/or termination of employment; and
4. Adjudging respondents to be jointly and solidarily liable to complainant for moral damages
in the sum of ₱500,000.00, exemplary damages in the sum of ₱500,000.00 and attorney’s
fees and costs.
The names of the 18 workers charged with illegal strike by AER are as follows:
1. Felino Agustin
2. Eduardo Brizuela
3. Otilio Rabino
4. Ferdinand Flores
5. Jonathan Taborda
6. Rodolfo Mainit, Jr.
7. Christopher Nolasco
8. Claud Moncel
9. Cleofas dela Buena
10. Herminio Papa
11. Oscar Macaranas
12. William Ritual
13. Rafael Gacad
14. James Caampued
15. Benson Pingol
16. Frisco Lorenzo, Jr.
17. Bernardino Acosta, Jr.
18. Esperidion Lopez, Jr.
AER likewise suspended seven (7) union members who tested positive for illegal drugs, namely:
1. Froilan Madamba
2. Arnold Rodriguez
3. Roberto Caldeo
4. Roger Bilatcha
5. Ruperto Mariano
6. Edwin Fabian
7. Nazario Madala
Out of the seven (7) suspended employees, only Edwin Fabian and Nazario Madala were allowed by
AER to report back to work. The other five (5) suspended employees were not admitted by AER
without first submitting the required medical certificate attesting to their fitness to work.
On August 9, 2001, after the parties submitted their respective position papers,6 the Labor Arbiter
(LA) rendered a decision7 in favor of Unyon by directing AER to reinstate the concerned employees
but without backwages effective October 16, 2001. Both parties filed their respective appeals8 with
the National Labor Relations Commission (NLRC).
On March 5, 2002, the NLRC issued its Resolution9 modifying the LA decision by setting aside the
order of reinstatement as it ruled out illegal dismissal. The NLRC likewise ruled that the concerned
employees had no valid basis in conducting a strike. On April 19, 2002, Unyon filed a motion for
reconsideration10 insisting, among others, that AER was guilty of unfair labor practice, illegal
suspension and illegal dismissal. Unyon also argued that since AER charged only 18 of the 32
employees with illegal strike, the employees who were not included in the said charge should have
been admitted back to work by AER. Unyon also claimed that there was no allegation that these
employees, who were not included in AER’s charge for illegal strike, were involved in the January
28, 1999 incident.11
After the denial of their motion for reconsideration, Unyon and the concerned employees filed a
petition12 before the Court of Appeals (CA). Unyon reiterated its argument that AER should admit
back to work those excluded from its list of 18 employees charged with illegal strike.13
On June 27, 2003, the CA rendered a decision,14 the dispositive portion of which reads, as follows:
WHEREFORE, premises considered, the petition is GRANTED. Respondents are hereby directed to
reinstate the petitioners effective immediately but without backwages, except those who were tested
positive for illegal drugs and have failed to submit their respective medical certificates.
On October 1, 2003, ruling on the motion for partial reconsideration filed by Unyon, the CA rendered
the assailed Amended Decision,15 ordering the immediate reinstatement of all the suspended
employees without backwages. Thus,
WHEREFORE, the partial motion for reconsideration is GRANTED insofar as the reinstatement of
the suspended employees is concerned. This Court’s decision dated June 27, 2003 is hereby
MODIFIED. Private respondents are hereby directed to reinstate all petitioners immediately without
backwages.
Unsatisfied, both parties filed the present consolidated petitions. Unyon argued that the CA erred in
not awarding backwages to the suspended employees who were ordered reinstated. AER, on the
other hand, argued that the CA erred in ordering the reinstatement of the suspended employees.
On July 13, 2011, this Court rendered a decision,16 the dispositive portion of which reads, as follows:
WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be
reinstated without backwages. If reinstatement is no longer feasible, the concerned employees
should be given separation pay up to the date set for their return in lieu of reinstatement.
Unyon filed the subject Motion for Partial Reconsideration17 questioning the Court’s July 13, 2011
Decision insofar as it failed to award backwages to fourteen (14) of its members.
Unyon argues that backwages should have been awarded to the 14 employees who were excluded
from the complaint filed by AER and that the latter should have reinstated them immediately
because they did not have any case at all.
AER was directed to file its comment. Its Comment,18 however, failed to address the issue except to
say that the motion for partial reconsideration was pro-forma.
After going over the records again, the Court holds that only nine (9) of the fourteen (14) excluded
employees deserve to be reinstated immediately with backwages.
Records disclose that thirty-two (32) employees filed a complaint for illegal suspension and unfair
labor practice against AER. Out of these 32 workers, only eighteen (18) of them were charged by
AER with illegal strike leaving fourteen (14) of them excluded from its complaint. The names of these
14 employees are as follows:
2. Arnold Rodriguez
3. Froilan Madamba
4. Danilo Quiboy
5. Roger Belatcha
6. Edwin Mendoza
7. Roberto Caldeo
8. Tammy Punsalan
9. Edward Ferrancol
11. Arnold Villota
13. Carlos Carolino
14. Renato Sarabuno
Technically, as no charges for illegal strike were filed against these 14 employees, they cannot be
among those found guilty of illegal strike. They cannot be considered in pari delicto. They should be
reinstated and given their backwages.
Out of these 14 employees, however, five (5) failed to write their names and affix their signatures in
the Membership Resolution19 attached to the petition filed before the CA, authorizing Union President
Arnold Villota to represent them. It must be noted that Arnold Villota signed as the Affiant in the
Verification and Certification by virtue of the Membership Resolution.20 The names of these 5
employees are:
1. Edwin Mendoza
2. Tammy Punzalan
3. Edward Ferrancol
5. Carlos Carolina
Because of their failure to affix their names and signatures in the Membership Resolution, Edwin
Mendoza, Tammy Punzalan, Edward Ferrancol, Menching Mariano, Jr. and Carlos Carolina cannot
be granted the relief that Unyon wanted for them in its Motion for Partial Reconsideration.
Only the following nine (9) employees who signed their names in the petition can be granted the
relief prayed for therein, namely:
2. Arnold Rodriguez
3. Froilan Madamba
4. Danilo Quiboy
5. Roger Belatcha
6. Roberto Caldeo
8. Arnold Villota
9. Renato Sarabuno
These excluded nine (9) workers, who signed their names in their petition before the CA, deserve to
be reinstated immediately and gra:1ted backwages. It is basic in jurisprudence that illegally
dismissed workers are entitled to reinstatement with back wages pi us interest at the legal rate.21
As stated in the Amended Decision of the CA, which the Court effectively affirmed after denying the
petition of both parties, the reinstatement shall be "without prejudice to the right of private
respondent AER to subject them for further medical check-up to determine if subject petitioners are
drug dependents."22
WHEREFORE, the Motion for Pa1iial Reconsideration filed by Progresibong Unyon Ng Mga
Manggagawa Sa AER is GRANTED only insofar as the nine (9) employees are concerned, namely:
Ruperto Mariano II, Arnold Rodriguez, Froilan Madamba, Danilo Quiboy, Roger Belateha, Roberto
Caldeo, Crisanto Lumbao, Jr., Arnold Villota, and Renato Sarabuno. 1âwphi1
Accordingly, the July 13, 2011 Decision is hereby MODIFIED in that the aforementioned nine (9)
workers are entitled to be reinstated and granted backwages with interest at the rate of six percent
(6%) per annum which shall be increased to twelve percent (12%) after the finality of this judgment.
SO ORDERED.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:
Chief Justice

ANTONIO T. CARPIO
Associate Justice
Associate Justice
Chairperson
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I attest that the conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Court's Division.

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, l
certify that the conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Court's Division.

Chief Justice
Footnotes
1
Rollo (G.R. No. 160138), p.253.
2
Id. at 245.
3
Rollo (G.R. No. 160138), pp. 121-126; (G.R. No. 160192), pp. 115-120.
4
Rollo (G.R. No. 160138), pp. 121-122.
5
Rollo (G.R. No. 160192), pp. 139-144.
6
Id. at 40-58.
7
Id. at 69-73.
8
Id. at 74-92.
9
Id. at 93-101.
10
Id. at 102-114.
11
Id. at 109.
12
Id. at 123-145.
13
Id. at 139.
14
Id. at 24-32.
15
Id. at 33-34.
16
Id. at 237-259.
17
Id. at 260-266.
18
Rollo (G.R. No. 160138), pp. 263-268.
19
Rollo (G.R. No. 160192), pp. 116-117.
20
Id. at 114.
Session Delights Ice Cream and Fast foods v. CA, G.R. No. 172149, February 8, 2010,
21
612 SCRA 10, 24.
22
CA Amended Decision, rollo (G.R. No. 160138), p. 50.

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 158786 & 158789 October 19, 2007
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA), ED CUBELO, EDWIN

ALARANA, ALEX ALEJO, ERWIN ALFONSO, MELVIN APOSTOL, DANIEL AROLLADO,
DOMINADOR ARRIOLA, LESTER ATUN, ROLANDO BALUYOT, RODERICK BAYANI, ABEL
BERCES, BENNY BERING, MELCHOR BLANCO, JERRY BOLOCON, ELMER BULAN, NELSON
CABAHUG, JESSIE CABATAY, MARCELO CABEZAS, ROQUE CANDELARIO, JR., LORENZO
CARAQUEO, DENNIS CARINGAL, GIENELL CASABA, CHRISTOPHER CATAPUSAN, RICO
CATRAL, JULIUS COMETA, JAY ANTONIO CORAL, REYNALDO CUEVAS, BENIGNO DAVID,
JR., JOEY DE GUZMAN, LEONARDO DE LEON, ROGELIO DELOS SANTOS, JOSELITO DE
OCAMPO, FRANK MANUEL DIA, ANTONIO DIMAYUGA, ARMANDO ERCILLO, DELMAR
ESPADILLA, DENNIS ESPELOA, JASON FAJILAGUTAN, JOHN FAJURA, MELENCIO
FRANCO, DEXTER FULGAR, EDUARDO GADO, ERWIN GALANG, ROBIN GARCES, ARIEL
GARCIA, RONALD GASPI, ANGELO GAVARRA, REYNALDO GOJAR, EDGAR HILANGA,
EUGENE JAY HONDRADA, ALEJANDRO IMPERIAL, FERDINAND JAEN, JOEY JAVILLONAR,
BASILIO LAQUI, ALBERTO LOMBOY, JUDE JONOBELL LOZADA, JOHNNY LUCIDO,
ROMMEL MACALINDONG, NIXON MADRAZO, ROGELIO MAGISTRADO, JR., PHILIP JOHN
MAGNAYE, ALLAN JOHN MALABANAN, ROLANDO MALALUAN, JR., PAULINO MALEON,
MANUEL MANALO, JR., JONAMAR MANAOG, JOVITO MANECLANG, BAYANI MANGUIL, JR.,
CARLITO MARASIGAN, ROMMEL MARIANO, BOBIT MENDOZA, ERICSON MONTERO,
MARLAW MONTERO, EDWIN NICANOR, RODERICK NIERVES, LOLITO NUNEZ, FELIMON
ORTIZ, EDWIN PECAYO, ERWIN PENA, JOWALD PENAMANTE, JORGE POLUTAN, EDDIE
RAMOS, ROLANDO REYES, PHILIP ROXAS, DAVID SALLAN, JR., BERNARDO SALVADOR,
BALDWIN SAN PABLO, JEFFREY SANGALANG, BERNABE SAQUILABON, ALEX SIERRA,
ROMUALDO SIMBORIO, EDWIN TABLIZO, PETRONIO TACLAN, JR., RODEL TOLENTINO,
ROMMEL TOLENTINO, GRANT ROBERT TORAL, FEDERICO TORRES, JR., EMANNUEL
TULIO, NESTOR UMITEN, JR., APOLLO VIOLETA, SR., DOMINADOR ZAMORA, JR., ROMMEL
ARCETA, ANTONIO BORSIGUE, EMILIO COMPLETO, RANDY CONSIGNADO, BASILIO DELA
CRUZ, ALEXANDER ESTEVA, NIKKO FRANCO, RODEL GAMIT, ROBERTO GONZALES,
PHILIP JALEA, JOEY LLANERA, GERONIMO LOPEZ, RUEL MANEGO, EDWIN MANZANILLA,
KENNETH NATIVIDAD, LARRY ORMILLA, CORNELIO PLATON, PAUL ARTHUR SALES,
ALEJANDRO SAMPANG, LAURO SULIT, ROLANDO TOMAS, JOSE ROMMEL TRAZONA,
MICHAEL TEDDY YANGYON, MAXIMINO CRUZ, VIRGILIO COLANDOG, ROMMEL DIGMA,
JOSELITO HUGO, and RICKY CHAVEZ, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, (NLRC-2ND DIVISION), HON. COMMISSIONERS:
VICTORINO CALAYCAY, ANGELITA GACUTAN, and RAUL AQUINO, TOYOTA MOTOR
PHILIPPINES CORPORATION, TAKESHI FUKUDA, and DAVID GO, Respondents,
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 158798-99
TOYOTA MOTOR PHILIPPINES CORPORATION, Petitioner,

vs.
TOYOTA MOTOR PHILIPPINES CORP. WORKERS ASSOCIATION (TMPCWA), Respondent.
DECISION
VELASCO, JR., J.:
The Case
In the instant petition under Rule 45 subject of G.R. Nos. 158786 and 158789, Toyota Motor
Philippines Corporation Workers Association (Union) and its dismissed officers and members seek
to set aside the February 27, 2003 Decision1 of the Court of Appeals (CA) in CA-G.R. SP Nos.
67100 and 67561, which affirmed the August 9, 2001 Decision2 and September 14, 2001
Resolution3 of the National Labor Relations Commission (NLRC), declaring illegal the strikes staged
by the Union and upholding the dismissal of the 227 Union officers and members.
On the other hand, in the related cases docketed as G.R. Nos. 158798-99, Toyota Motor Philippines
Corporation (Toyota) prays for the recall of the award of severance compensation to the 227
dismissed employees, which was granted under the June 20, 2003 CA Resolution4 in CA-G.R. SP
Nos. 67100 and 67561.
In view of the fact that the parties are petitioner/s and respondent/s and vice-versa in the four (4)
interrelated cases, they will be referred to as simply the Union and Toyota hereafter.
The Facts
The Union is a legitimate labor organization duly registered with the Department of Labor and
Employment (DOLE) and is the sole and exclusive bargaining agent of all Toyota rank and file
employees.5
Toyota, on the other hand, is a domestic corporation engaged in the assembly and sale of vehicles
and parts.6 It is a Board of Investments (BOI) participant in the Car Development Program and the
Commercial Vehicle Development Program. It is likewise a BOI-preferred non-pioneer export trader
of automotive parts and is under the "Special Economic Zone Act of 1995." It is one of the largest
motor vehicle manufacturers in the country employing around 1,400 workers for its plants in Bicutan
and Sta. Rosa, Laguna. It is claimed that its assets amount to PhP 5.525 billion, with net sales of
PhP 14.646 billion and provisions for income tax of PhP 120.9 million.
On February 14, 1999, the Union filed a petition for certification election among the Toyota rank and
file employees with the National Conciliation and Mediation Board (NCMB), which was docketed as
Case No. NCR-OD-M-9902-001. Med-Arbiter Ma. Zosima C. Lameyra denied the petition, but, on
appeal, the DOLE Secretary granted the Union’s prayer, and, through the June 25, 1999 Order,
directed the immediate holding of the certification election.7
After Toyota’s plea for reconsideration was denied, the certification election was conducted. Med-
Arbiter Lameyra’s May 12, 2000 Order certified the Union as the sole and exclusive bargaining agent
of all the Toyota rank and file employees. Toyota challenged said Order via an appeal to the DOLE
Secretary.8
In the meantime, the Union submitted its Collective Bargaining Agreement (CBA) proposals to
Toyota, but the latter refused to negotiate in view of its pending appeal. Consequently, the Union
filed a notice of strike on January 16, 2001 with the NCMB, docketed as NCMB-NCR-NS-01-011-01,
based on Toyota’s refusal to bargain. On February 5, 2001, the NCMB-NCR converted the notice of
strike into a preventive mediation case on the ground that the issue of whether or not the Union is
the exclusive bargaining agent of all Toyota rank and file employees was still unresolved by the
DOLE Secretary.
In connection with Toyota’s appeal, Toyota and the Union were required to attend a hearing on
February 21, 2001 before the Bureau of Labor Relations (BLR) in relation to the exclusion of the
votes of alleged supervisory employees from the votes cast during the certification election. The
February 21, 2001 hearing was cancelled and reset to February 22, 2001. On February 21, 2001,
135 Union officers and members failed to render the required overtime work, and instead marched to
and staged a picket in front of the BLR office in Intramuros, Manila.9 The Union, in a letter of the
same date, also requested that its members be allowed to be absent on February 22, 2001 to attend
the hearing and instead work on their next scheduled rest day. This request however was denied by
Toyota.
Despite denial of the Union’s request, more than 200 employees staged mass actions on February
22 and 23, 2001 in front of the BLR and the DOLE offices, to protest the partisan and anti-union
stance of Toyota. Due to the deliberate absence of a considerable number of employees on
February 22 to 23, 2001, Toyota experienced acute lack of manpower in its manufacturing and
production lines, and was unable to meet its production goals resulting in huge losses of PhP
53,849,991.
Soon thereafter, on February 27, 2001, Toyota sent individual letters to some 360 employees
requiring them to explain within 24 hours why they should not be dismissed for their obstinate
defiance of the company’s directive to render overtime work on February 21, 2001, for their failure to
report for work on February 22 and 23, 2001, and for their participation in the concerted actions
which severely disrupted and paralyzed the plant’s operations.10 These letters specifically cited
Section D, paragraph 6 of the Company’s Code of Conduct, to wit:
Inciting or participating in riots, disorders, alleged strikes, or concerted actions detrimental to

[Toyota’s] interest.
1st offense – dismissal.11
Meanwhile, a February 27, 2001 Manifesto was circulated by the Union which urged its members to
participate in a strike/picket and to abandon their posts, the pertinent portion of which reads, as
follows:
YANIG sa kanyang komportableng upuan ang management ng TOYOTA. And dating takot, kimi, at
mahiyaing manggagawa ay walang takot na nagmartsa at nagprotesta laban sa desperadong
pagtatangkang baguhin ang desisyon ng DOLE na pabor sa UNYON. Sa tatlong araw na protesta,
mahigit sa tatlong daang manggagawa ang lumahok.
xxxx
HANDA na tayong lumabas anumang oras kung patuloy na ipagkakait ng management ang
CBA. Oo maari tayong masaktan sa welga. Oo, maari tayong magutom sa piketlayn. Subalit
may pagkakaiba ba ito sa unti-unting pagpatay sa atin sa loob ng 12 taong makabaling likod ng
pagtatrabaho? Ilang taon na lang ay magkakabutas na ang ating mga baga sa mga alipato at usok
ng welding. Ilang taon na lang ay marupok na ang ating mga buto sa kabubuhat. Kung dumating na
ang panahong ito at wala pa tayong CBA, paano na? Hahayaan ba nating ang kumpanya lang ang
makinabang sa yamang likha ng higit sa isang dekadang pagpapagal natin?
HUWAG BIBITIW SA NASIMULANG TAGUMPAY!
PAIGTINGIN ANG PAKIKIBAKA PARA SA ISANG MAKATARUNGANG CBA!
HIGIT PANG PATATAGIN ANG PAGKAKAISA NG MGA MANGGAGAWA SA TOYOTA!

12
(Emphasis supplied.)
On the next day, the Union filed with the NCMB another notice of strike docketed as NCMB-NCR-
NS-02-061-01 for union busting amounting to unfair labor practice.
On March 1, 2001, the Union nonetheless submitted an explanation in compliance with the February
27, 2001 notices sent by Toyota to the erring employees. The Union members explained that their
refusal to work on their scheduled work time for two consecutive days was simply an exercise of
their constitutional right to peaceably assemble and to petition the government for redress of
grievances. It further argued that the demonstrations staged by the employees on February 22 and
23, 2001 could not be classified as an illegal strike or picket, and that Toyota had already condoned
the alleged acts when it accepted back the subject employees.13
Consequently, on March 2 and 5, 2001, Toyota issued two (2) memoranda to the concerned
employees to clarify whether or not they are adopting the March 1, 2001 Union’s explanation as their
own. The employees were also required to attend an investigative interview,14 but they refused to do
so.
On March 16, 2001, Toyota terminated the employment of 227 employees15 for participation in
concerted actions in violation of its Code of Conduct and for misconduct under Article 282 of the
Labor Code. The notice of termination reads:
After a careful evaluation of the evidence on hand, and a thorough assessment of your explanation,
TMP has concluded that there are overwhelming reasons to terminate your services based on Article
282 of the Labor Code and TMP’s Code of Conduct.
Your repeated absences without permission on February 22 to 23, 2001 to participate in a concerted
action against TMP constitute abandonment of work and/or very serious misconduct under Article
The degree of your offense is aggravated by the following circumstances:
1. You expressed to management that you will adopt the union’s letter dated March 1, 2001,
as your own explanation to the charges contained in the Due Process Form dated February
27, 2001. It is evident from such explanation that you did not come to work because you
deliberately participated together with other Team Members in a plan to engage in concerted
actions detrimental to TMP’s interest. As a result of your participation in the widespread
abandonment of work by Team Members from February 22 to 23, 2001, TMP suffered
substantial damage.
It is significant that the absences you incurred in order to attend the clarificatory hearing
conducted by the Bureau of Labor Relations were unnecessary because the union was
amply represented in the said hearings by its counsel and certain members who sought and
were granted leave for the purpose. Your reason for being absent is, therefore, not
acceptable; and
2. Your participation in the organized work boycott by Team Members on February 22 and
23 led to work disruptions that prevented the Company from meeting its production targets,
resulting [in] foregone sales of more than eighty (80) vehicles, mostly new-model Revos,
valued at more than Fifty Million Pesos (50,000,000.00).
The foregoing is also a violation of TMP’s Code of Conduct (Section D, Paragraph 6) to wit:
"Inciting or participating in riots, disorders, illegal strikes or concerted actions

detrimental to TMP’s interest."
Based on the above, TMP Management is left with no other recourse but to terminate
your employment effective upon your receipt thereof.
[Sgd.]
JOSE MARIA ALIGADA
Deputy Division Manager16
In reaction to the dismissal of its union members and officers, the Union went on strike on
March 17, 2001. Subsequently, from March 28, 2001 to April 12, 2001, the Union intensified
its strike by barricading the gates of Toyota’s Bicutan and Sta. Rosa plants. The strikers
prevented workers who reported for work from entering the plants. In his Affidavit, Mr.
Eduardo Nicolas III, Security Department Head, stated that:
3. On March 17, 2001, members of the Toyota Motor Philippines Corporation Workers
Association (TMPCWA), in response to the dismissal of some two hundred twenty seven
(227) leaders and members of TMPCWA and without observing the requirements mandated
by the Labor Code, refused to report for work and picketed TMPC premises from 8:00 a.m.
to 5:00 p.m. The strikers badmouthed people coming in and hurled invectives such as
"bakeru" at Japanese officers of the company. The strikers likewise pounded the officers’
vehicle as they tried to enter the premises of the company.
4. On March 28, 2001, the strikers intensified their picketing and barricaded the gates of
TMPC’s Bicutan and Sta. Rosa plants, thus, blocking the free ingress/egress to and from the
premises. Shuttle buses and cars containing TMPC employees, suppliers, dealers,
customers and other people having business with the company, were prevented by the
strikers from entering the plants.
5. As a standard operating procedure, I instructed my men to take photographs and video

footages of those who participated in the strike. Seen on video footages taken on various
dates actively participating in the strike were union officers Emilio C. Completo, Alexander
Esteva, Joey Javellonar and Lorenzo Caraqueo.
6. Based on the pictures, among those identified to have participated in the March 28, 2001
strike were Grant Robert Toral, John Posadas, Alex Sierra, Allan John Malabanan, Abel
Bersos, Ernesto Bonavente, Ariel Garcia, Pablito Adaya, Feliciano Mercado, Charlie Oliveria,
Philip Roxas, June Lamberte, Manjolito Puno, Baldwin San Pablo, Joseph Naguit, Federico
Torres, Larry Gerola, Roderick Bayani, Allan Oclarino, Reynaldo Cuevas, Jorge Polutan,
Arman Ercillo, Jimmy Hembra, Albert Mariquit, Ramil Gecale, Jimmy Palisoc, Normandy
Castalone, Joey Llanera, Greg Castro, Felicisimo Escrimadora, Rodolfo Bay, Ramon
Clemente, Dante Baclino, Allan Palomares, Arturo Murillo and Robert Gonzales. Attached
hereto as Annexes "1" to "18" are the pictures taken on March 28, 2001 at the Bicutan and
Sta. Rosa plants.
7. From March 29 to 31, 2001, the strikers continued to barricade the entrances to TMPC’s
two (2) plants. Once again, the strikers hurled nasty remarks and prevented employees
aboard shuttle buses from entering the plants. Among the strikers were Christopher Saldivar,
Basilio Laqui, Sabas Bernabise, Federico Torres, Freddie Olit, Josel Agosto, Arthur Parilla,
Richard Calalang, Ariel Garcia, Edgar Hilaga, Charlie Oliveria, Ferdinand Jaen, Wilfredo
Tagle, Alejandro Imperial, Manjolito Puno, Delmar Espadilla, Domingo Javier, Apollo Violeta
and Elvis Tabinao.17
On March 29, 2001, Toyota filed a petition for injunction with a prayer for the issuance of a
temporary restraining order (TRO) with the NLRC, which was docketed as NLRC NCR Case No.
INJ-0001054-01. It sought free ingress to and egress from its Bicutan and Sta. Rosa manufacturing
plants. Acting on said petition, the NLRC, on April 5, 2001, issued a TRO against the Union, ordering
its leaders and members as well as its sympathizers to remove their barricades and all forms of
obstruction to ensure free ingress to and egress from the company’s premises. In addition, the
NLRC rejected the Union’s motion to dismiss based on lack of jurisdiction.18
Meanwhile, Toyota filed a petition to declare the strike illegal with the NLRC arbitration branch,
which was docketed as NLRC NCR (South) Case No. 30-04-01775-01, and prayed that the erring
Union officers, directors, and members be dismissed.19
On April 10, 2001, the DOLE Secretary assumed jurisdiction over the labor dispute and issued an
Order20 certifying the labor dispute to the NLRC. In said Order, the DOLE Secretary directed all
striking workers to return to work at their regular shifts by April 16, 2001. On the other hand, it
ordered Toyota to accept the returning employees under the same terms and conditions obtaining
prior to the strike or at its option, put them under payroll reinstatement. The parties were also
enjoined from committing acts that may worsen the situation. 1âwphi1
The Union ended the strike on April 12, 2001. The union members and officers tried to return to work
on April 16, 2001 but were told that Toyota opted for payroll-reinstatement authorized by the Order
of the DOLE Secretary.
In the meantime, the Union filed a motion for reconsideration of the DOLE Secretary’s April 10, 2001
certification Order, which, however, was denied by the DOLE Secretary in her May 25, 2001
Resolution. Consequently, a petition for certiorari was filed before the CA, which was docketed as
CA-G.R. SP No. 64998.
In the intervening time, the NLRC, in compliance with the April 10, 2001 Order of the DOLE
Secretary, docketed the case as Certified Case No. 000203-01.
Meanwhile, on May 23, 2001, at around 12:00 nn., despite the issuance of the DOLE Secretary’s
certification Order, several payroll-reinstated members of the Union staged a protest rally in front of
Toyota’s Bicutan Plant bearing placards and streamers in defiance of the April 10, 2001 Order.
Then, on May 28, 2001, around forty-four (44) Union members staged another protest action in front
of the Bicutan Plant. At the same time, some twenty-nine (29) payroll-reinstated employees picketed
in front of the Santa Rosa Plant’s main entrance, and were later joined by other Union members.
On June 5, 2001, notwithstanding the certification Order, the Union filed another notice of strike,
which was docketed as NCMB-NCR-NS-06-150-01. On June 18, 2001, the DOLE Secretary directed
the second notice of strike to be subsumed in the April 10, 2001 certification Order.
In the meantime, the NLRC, in Certified Case No. 000203-01, ordered both parties to submit their
respective position papers on June 8, 2001. The union, however, requested for abeyance of the
proceedings considering that there is a pending petition for certiorari with the CA assailing the
validity of the DOLE Secretary’s Assumption of Jurisdiction Order.
Thereafter, on June 19, 2001, the NLRC issued an Order, reiterating its previous order for both
parties to submit their respective position papers on or before June 2, 2001. The same Order also
denied the Union’s verbal motion to defer hearing on the certified cases.
On June 27, 2001, the Union filed a Motion for Reconsideration of the NLRC’s June 19, 2001 Order,
praying for the deferment of the submission of position papers until its petition for certiorari is
resolved by the CA.
On June 29, 2001, only Toyota submitted its position paper. On July 11, 2001, the NLRC again
ordered the Union to submit its position paper by July 19, 2001, with a warning that upon failure for it
to do so, the case shall be considered submitted for decision.
Meanwhile, on July 17, 2001, the CA dismissed the Union’s petition for certiorari in CA-G.R. SP No.
64998, assailing the DOLE Secretary’s April 10, 2001 Order.
Notwithstanding repeated orders to file its position paper, the Union still failed to submit its position
paper on July 19, 2001. Consequently, the NLRC issued an Order directing the Union to submit its
position paper on the scheduled August 3, 2001 hearing; otherwise, the case shall be deemed
submitted for resolution based on the evidence on record.
During the August 3, 2001 hearing, the Union, despite several accommodations, still failed to submit
its position paper. Later that day, the Union claimed it filed its position paper by registered mail.
Subsequently, the NLRC, in its August 9, 2001 Decision, declared the strikes staged by the Union on
February 21 to 23, 2001 and May 23 and 28, 2001 as illegal. The decretal portion reads:
WHEREFORE, premises considered, it is hereby ordered:
(1) Declaring the strikes staged by the Union to be illegal.
(2) Declared [sic] that the dismissal of the 227 who participated in the illegal strike on
February 21-23, 2001 is legal.
(3) However, the Company is ordered to pay the 227 Union members, who participated in
the illegal strike severance compensation in an amount equivalent to one month salary for
every year of service, as an alternative relief to continued employment.
(4) Declared [sic] that the following Union officers and directors to have forfeited their
employment status for having led the illegal strikes on February 21-23, 2001 and May 23 and
28, 2001: Ed Cubelo, Maximino Cruz, Jr., Ricky Chavez, Joselito Hugo, Virgilio Colandog,
Rommel Digma, Federico Torres, Emilio Completo, Alexander Esteva, Joey Javellonar,
Lorenzo Caraqueo, Roderick Nieres, Antonio Borsigue, Bayani Manguil, Jr., and Mayo
Mata.21
SO ORDERED.22
The NLRC considered the mass actions staged on February 21 to 23, 2001 illegal as the Union
failed to comply with the procedural requirements of a valid strike under Art. 263 of the Labor Code.
After the DOLE Secretary assumed jurisdiction over the Toyota dispute on April 10, 2001, the Union
again staged strikes on May 23 and 28, 2001. The NLRC found the strikes illegal as they violated
Art. 264 of the Labor Code which proscribes any strike or lockout after jurisdiction is assumed over
the dispute by the President or the DOLE Secretary.
The NLRC held that both parties must have maintained the status quo after the DOLE Secretary
issued the assumption/certification Order, and ruled that the Union did not respect the DOLE
Secretary’s directive.
Accordingly, both Toyota and the Union filed Motions for Reconsideration, which the NLRC denied in
its September 14, 2001 Resolution.23 Consequently, both parties questioned the August 9, 2001
Decision24 and September 14, 2001 Resolution of the NLRC in separate petitions for certiorari filed
with the CA, which were docketed as CA-G.R. SP Nos. 67100 and 67561, respectively. The CA then
consolidated the petitions.
In its February 27, 2003 Decision,25 the CA ruled that the Union’s petition is defective in form for its
failure to append a proper verification and certificate of non-forum shopping, given that, out of the
227 petitioners, only 159 signed the verification and certificate of non-forum shopping. Despite the
flaw, the CA proceeded to resolve the petitions on the merits and affirmed the assailed NLRC
Decision and Resolution with a modification, however, of deleting the award of severance
compensation to the dismissed Union members.
In justifying the recall of the severance compensation, the CA
considered the participation in illegal strikes as serious misconduct. It defined serious misconduct as
a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error in judgment. It cited Panay
Electric Company, Inc. v. NLRC,26 where we revoked the grant of separation benefits to employees
who lawfully participated in an illegal strike based on Art. 264 of the Labor Code, which states that
"any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost
his employment status."27
However, in its June 20, 2003 Resolution,28 the CA modified its February 27, 2003 Decision by
reinstating severance compensation to the dismissed employees based on social justice.
The Issues
Petitioner Union now comes to this Court and raises the following issues for our consideration:
I. Whether the mere participation of ordinary employees in an illegal strike is enough reason
to warrant their dismissal.
II. Whether the Union officers and members’ act of holding the protest rallies in front of the
BLR office and the Office of the Secretary of Labor and Employment on February 22 and 23,
2001 should be held as illegal strikes. In relation hereto, whether the protests committed on
May 23 and 28, 2001, should be held as illegal strikes. Lastly, whether the Union violated the
Assumption of Jurisdiction Order issued by the Secretary of Labor and Employment.
III. Whether the dismissal of 227 Union officers and members constitutes unfair labor
practice.
IV. Whether the CA erred in affirming the Decision of the NLRC which excluded the Union’s
Position Paper which the Union filed by mail. In the same vein, whether the Union’s right to
due process was violated when the NLRC excluded their Position Paper.
V. Whether the CA erred in dismissing the Union’s Petition for Certiorari.
Toyota, on the other hand, presents this sole issue for our determination:
I. Whether the Court of Appeals erred in issuing its Resolution dated June 20, 2003, partially
modifying its Decision dated February 27, 2003, and awarding severance compensation to the
dismissed Union members.
In sum, two main issues are brought to the fore:
(1) Whether the mass actions committed by the Union on different occasions are illegal
strikes; and
(2) Whether separation pay should be awarded to the Union members who participated in
the illegal strikes.
The Court’s Ruling
The Union contends that the NLRC violated its right to due process when it disregarded its position
paper in deciding Toyota’s petition to declare the strike illegal.
We rule otherwise.
It is entirely the Union’s fault that its position paper was not considered by the NLRC. Records
readily reveal that the NLRC was even too generous in affording due process to the Union. It issued
no less than three (3) orders for the parties to submit its position papers, which the Union ignored
until the last minute. No sufficient justification was offered why the Union belatedly filed its position
paper. In Datu Eduardo Ampo v. The Hon. Court of Appeals, it was explained that a party cannot
complain of deprivation of due process if he was afforded an opportunity to participate in the
proceedings but failed to do so. If he does not avail himself of the chance to be heard, then it is
deemed waived or forfeited without violating the constitutional guarantee.29 Thus, there was no
violation of the Union’s right to due process on the part of the NLRC.
On a procedural aspect, the Union faults the CA for treating its petition as an unsigned pleading and
posits that the verification signed by 159 out of the 227 petitioners has already substantially
complied with and satisfied the requirements under Secs. 4 and 5 of Rule 7 of the Rules of Court.
The Union’s proposition is partly correct.
Sec. 4 of Rule 7 of the Rules of Court states:
Sec. 4. Verification.—Except when otherwise specifically required by law or rule, pleadings need not
be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on "information and belief" or
upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an
unsigned pleading.
The verification requirement is significant, as it is intended to secure an assurance that the

allegations in the pleading are true and correct and not the product of the imagination or a matter of
speculation.30 This requirement is simply a condition affecting the form of pleadings, and
noncompliance with the requirement does not necessarily render it fatally defective. Indeed,
verification is only a formal and not a jurisdictional requirement.31
In this case, the problem is not the absence but the adequacy of the Union’s verification, since only
159 out of the 227 petitioners executed the verification. Undeniably, the petition meets the
requirement on the verification with respect to the 159 petitioners who executed the verification,
attesting that they have sufficient knowledge of the truth and correctness of the allegations of the
petition. However, their signatures cannot be considered as verification of the petition by the other
68 named petitioners unless the latter gave written authorization to the 159 petitioners to sign the
verification on their behalf. Thus, in Loquias v. Office of the Ombudsman, we ruled that the petition
satisfies the formal requirements only with regard to the petitioner who signed the petition but not his
co-petitioner who did not sign nor authorize the other petitioner to sign it on his behalf.32 The proper
ruling in this situation is to consider the petition as compliant with the formal requirements with
respect to the parties who signed it and, therefore, can be given due course only with regard to
them. The other petitioners who did not sign the verification and certificate against forum shopping
cannot be recognized as petitioners have no legal standing before the Court. The petition should be
dismissed outright with respect to the non-conforming petitioners.
In the case at bench, however, the CA, in the exercise of sound discretion, did not strictly apply the
ruling in Loquias and instead proceeded to decide the case on the merits.
The alleged protest rallies in front of the offices of BLR and DOLE Secretary and at the
Toyota plants constituted illegal strikes
When is a strike illegal?
Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees
performing governmental functions; or
(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on
the requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an
unfair labor practice against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread
terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code];
or
(5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition,
or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive
arbitration clause.33
Petitioner Union contends that the protests or rallies conducted on February 21 and 23, 2001 are not
within the ambit of strikes as defined in the Labor Code, since they were legitimate exercises of their
right to peaceably assemble and petition the government for redress of grievances. Mainly relying on
the doctrine laid down in the case of Philippine Blooming Mills Employees Organization v. Philippine
Blooming Mills Co., Inc.,34 it argues that the protest was not directed at Toyota but towards the
Government (DOLE and BLR). It explains that the protest is not a strike as contemplated in the
Labor Code. The Union points out that in Philippine Blooming Mills Employees Organization, the
mass action staged in Malacañang to petition the Chief Executive against the abusive behavior of
some police officers was a proper exercise of the employees’ right to speak out and to peaceably
gather and ask government for redress of their grievances.
The Union’s position fails to convince us.

While the facts in Philippine Blooming Mills Employees Organization are similar in some respects to
that of the present case, the Union fails to realize one major difference: there was no labor dispute
in Philippine Blooming Mills Employees Organization. In the present case, there was an on-going
labor dispute arising from Toyota’s refusal to recognize and negotiate with the Union, which was the
subject of the notice of strike filed by the Union on January 16, 2001. Thus, the Union’s reliance
on Phililippine Blooming Mills Employees Organization is misplaced, as it cannot be considered a
precedent to the case at bar.
A strike means any temporary stoppage of work by the concerted action of employees as a result of
an industrial or labor dispute. A labor dispute, in turn, includes any controversy or matter concerning
terms or conditions of employment or the association or representation of persons in negotiating,
fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of the employer and the employee.35
In Bangalisan v. Court of Appeals, it was explained that "[t]he fact that the conventional term ‘strike’
was not used by the striking employees to describe their common course of action is
inconsequential, since the substance of the situation and not its appearance, will be deemed
controlling."36 The term "strike" has been elucidated to encompass not only concerted work
stoppages, but also slowdowns, mass leaves, sit-downs, attempts to damage, destroy, or sabotage
plant equipment and facilities, and similar activities.37
Applying pertinent legal provisions and jurisprudence, we rule that the protest actions undertaken by
the Union officials and members on February 21 to 23, 2001 are not valid and proper exercises of
their right to assemble and ask government for redress of their complaints, but are illegal strikes in
breach of the Labor Code. The Union’s position is weakened by the lack of permit from the City of
Manila to hold "rallies." Shrouded as demonstrations, they were in reality temporary stoppages of
work perpetrated through the concerted action of the employees who deliberately failed to report for
work on the convenient excuse that they will hold a rally at the BLR and DOLE offices in Intramuros,
Manila, on February 21 to 23, 2001. The purported reason for these protest actions was to
safeguard their rights against any abuse which the med-arbiter may commit against their cause.
However, the Union failed to advance convincing proof that the med-arbiter was biased against
them. The acts of the med-arbiter in the performance of his duties are presumed regular. Sans
ample evidence to the contrary, the Union was unable to justify the February 2001 mass actions.
What comes to the fore is that the decision not to work for two days was designed and calculated to
cripple the manufacturing arm of Toyota. It becomes obvious that the real and ultimate goal of the
Union is to coerce Toyota to finally acknowledge the Union as the sole bargaining agent of the
company. This is not a legal and valid exercise of the right of assembly and to demand redress of
grievance.
We sustain the CA’s affirmance of the NLRC’s finding that the protest rallies staged on February 21
to 23, 2001 were actually illegal strikes. The illegality of the Union’s mass actions was succinctly
elaborated by the labor tribunal, thus:
We have stated in our questioned decision that such mass actions staged before the Bureau of
Labor Relations on February 21-23, 2001 by the union officers and members fall squarely within the
definition of a strike (Article 212 (o), Labor Code). These concerted actions resulted in the temporary
stoppage of work causing the latter substantial losses. Thus, without the requirements for a valid
strike having been complied with, we were constrained to consider the strike staged on such dates
as illegal and all employees who participated in the concerted actions to have consequently lost their
employment status.
If we are going to stamp a color of legality on the two (2) [day-] walk out/strike of respondents
without filing a notice of strike, in effect we are giving license to all the unions in the country to
paralyze the operations of their companies/employers every time they wish to hold a demonstration
in front of any government agency. While we recognize the right of every person or a group to
peaceably assemble and petition the government for redress of grievances, the exercise of such
right is governed by existing laws, rules and regulations.
Although the respondent union admittedly made earnest representations with the company to hold a
mass protest before the BLR, together with their officers and members, the denial of the request by
the management should have been heeded and ended their insistence to hold the planned mass
demonstration. Verily, the violation of the company rule cannot be dismissed as mere absences of
two days as being suggested by the union [are but] concerted actions detrimental to Petitioner
Toyota’s interest.38 (Emphasis supplied.)
It is obvious that the February 21 to 23, 2001 concerted actions were undertaken without satisfying
the prerequisites for a valid strike under Art. 263 of the Labor Code. The Union failed to comply with
the following requirements: (1) a notice of strike filed with the DOLE 30 days before the intended
date of strike, or 15 days in case of unfair labor practice;39 (2) strike vote approved by a majority of
the total union membership in the bargaining unit concerned obtained by secret ballot in a meeting
called for that purpose; and (3) notice given to the DOLE of the results of the voting at least seven
days before the intended strike. These requirements are mandatory and the failure of a union to
comply with them renders the strike illegal.40 The evident intention of the law in requiring the strike
notice and the strike-vote report is to reasonably regulate the right to strike, which is essential to the
attainment of legitimate policy objectives embodied in the law.41 As they failed to conform to the law,
the strikes on February 21, 22, and 23, 2001 were illegal.
Moreover, the aforementioned February 2001 strikes are in blatant violation of Sec. D, par. 6 of
Toyota’s Code of Conduct which prohibits "inciting or participating in riots, disorders, alleged strikes
or concerted actions detrimental to [Toyota’s] interest." The penalty for the offense is dismissal. The
Union and its members are bound by the company rules, and the February 2001 mass actions and
deliberate refusal to render regular and overtime work on said days violated these rules. In sum, the
February 2001 strikes and walk-outs were illegal as these were in violation of specific requirements
of the Labor Code and a company rule against illegal strikes or concerted actions.
With respect to the strikes committed from March 17 to April 12, 2001, those were initially legal as
the legal requirements were met. However, on March 28 to April 12, 2001, the Union barricaded the
gates of the Bicutan and Sta. Rosa plants and blocked the free ingress to and egress from the
company premises. Toyota employees, customers, and other people having business with the
company were intimidated and were refused entry to the plants. As earlier explained, these strikes
were illegal because unlawful means were employed. The acts of the Union officers and members
are in palpable violation of Art. 264(e), which proscribes acts of violence, coercion, or intimidation, or
which obstruct the free ingress to and egress from the company premises. Undeniably, the strikes
from March 28 to April 12, 2001 were illegal.
Petitioner Union also posits that strikes were not committed on May 23 and 28, 2001. The Union
asserts that the rallies held on May 23 and 28, 2001 could not be considered strikes, as the
participants were the dismissed employees who were on payroll reinstatement. It concludes that
there was no work stoppage.
This contention has no basis.

It is clear that once the DOLE Secretary assumes jurisdiction over the labor dispute and certifies the
case for compulsory arbitration with the NLRC, the parties have to revert to the status quo ante (the
state of things as it was before). The intended normalcy of operations is apparent from the fallo of
the April 10, 2001 Order of then DOLE Secretary Patricia A. Sto. Tomas, which reads:
WHEREFORE, PREMISES CONSIDERED, this Office hereby CERTIFIES the labor dispute at
Toyota Motors Philippines Corporation to the [NLRC] pursuant to Article 263 (g) of the Labor Code,
as amended. This Certification covers the current labor cases filed in relation with the Toyota strike,
particularly, the Petition for Injunction filed with the National Labor Relations Commission entitled
Toyota Motor Philippines Corporation vs. Toyota Motor Philippines Corporation Workers Association
(TMPCWA), Ed Cubelo, et al., NLRC Injunction Case No. 3401054-01; Toyota Motor Philippines
Corporation vs. Toyota Motor Philippines Corporation Workers Association, et al., NLRC NCR Case
No. 3004-01775-01, and such other labor cases that the parties may file relating to the strike and its
effects while this Certification is in effect.
As provided under Article 2634(g) of the Labor Code, all striking workers are directed to return to
work at their regular shifts by April 16, 2001; the Company is in turn directed to accept them back to
work under the same terms and conditions obtaining prior to the work stoppage, subject to the option
of the company to merely reinstate a worker or workers in the payroll in light of the negative
emotions that the strike has generated and the need to prevent the further deterioration of the
relationship between the company and its workers.
Further, the parties are hereby ordered to cease and desist from committing any act that might lead
to the worsening of an already deteriorated situation.42 (Emphasis supplied.)
It is explicit from this directive that the Union and its members shall refrain from engaging in any
activity that might exacerbate the tense labor situation in Toyota, which certainly includes concerted
actions.
This was not heeded by the Union and the individual respondents who staged illegal concerted
actions on May 23 and 28, 2001 in contravention of the Order of the DOLE Secretary that no acts
should be undertaken by them to aggravate the "already deteriorated situation."
While it may be conceded that there was no work disruption in the two Toyota plants, the fact still
remains that the Union and its members picketed and performed concerted actions in front of the
Company premises. This is a patent violation of the assumption of jurisdiction and certification Order
of the DOLE Secretary, which ordered the parties "to cease and desist from committing any act that
might lead to the worsening of an already deteriorated situation." While there are no work stoppages,
the pickets and concerted actions outside the plants have a demoralizing and even chilling effect on
the workers inside the plants and can be considered as veiled threats of possible trouble to the
workers when they go out of the company premises after work and of impending disruption of
operations to company officials and even to customers in the days to come. The pictures presented
by Toyota undoubtedly show that the company officials and employees are being intimidated and
threatened by the strikers. In short, the Union, by its mass actions, has inflamed an already volatile
situation, which was explicitly proscribed by the DOLE Secretary’s Order. We do not find any
compelling reason to reverse the NLRC findings that the pickets on May 23 and 28, 2001 were
unlawful strikes.
From the foregoing discussion, we rule that the February 21 to 23, 2001 concerted actions, the
March 17 to April 12, 2001 strikes, and the May 23 and 28, 2001 mass actions were illegal strikes.
Union officers are liable for unlawful strikes or illegal acts during a strike
Art. 264 (a) of the Labor Code provides:
ART. 264. PROHIBITED ACTIVITIES
(a) x x x
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall
be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an
illegal strike and any worker or union officer who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer during such lawful strike.
Art. 264(a) sanctions the dismissal of a union officer who knowingly participates in an illegal strike or
who knowingly participates in the commission of illegal acts during a lawful strike.
It is clear that the responsibility of union officials is greater than that of the members. They are
tasked with the duty to lead and guide the membership in decision making on union activities in
accordance with the law, government rules and regulations, and established labor practices. The
leaders are expected to recommend actions that are arrived at with circumspection and
contemplation, and always keep paramount the best interests of the members and union within the
bounds of law. If the implementation of an illegal strike is recommended, then they would mislead
and deceive the membership and the supreme penalty of dismissal is appropriate. On the other
hand, if the strike is legal at the beginning and the officials commit illegal acts during the duration of
the strike, then they cannot evade personal and individual liability for said acts.
The Union officials were in clear breach of Art. 264(a) when they knowingly participated in the illegal
strikes held from February 21 to 23, 2001, from March 17 to April 12, 2001, and on May 23 and 28,
2001. We uphold the findings of fact of the NLRC on the involvement of said union officials in the
unlawful concerted actions as affirmed by the CA, thus:
As regards to the Union officers and directors, there is overwhelming justification to declare their
termination from service. Having instigated the Union members to stage and carry out all illegal
strikes from February 21-23, 2001, and May 23 and 28, 2001, the following Union officers are hereby
terminated for cause pursuant to Article 264(a) of the Labor Code: Ed Cubelo, Maximino Cruz, Jr.,
Ricky Chavez, Joselito Hugo, Virgilio Colandog, Rommel Digma, Federico Torres, Emilio Completo,
Alexander Esteva, Joey Javellonar, Lorenzo Caraqueo, Roderick Nieres, Antonio Borsigue, Bayani
Manguil, Jr., and Mayo Mata.43
The rule is well entrenched in this jurisdiction that factual findings of the labor tribunal, when affirmed
by the appellate court, are generally accorded great respect, even finality.44
Likewise, we are not duty-bound to delve into the accuracy of the factual findings of the NLRC in the
absence of clear showing that these were arbitrary and bereft of any rational basis.45 In the case at
bench, the Union failed to convince us that the NLRC findings that the Union officials instigated, led,
and knowingly participated in the series of illegal strikes are not reinforced by substantial evidence.
Verily, said findings have to be maintained and upheld. We reiterate, as a reminder to labor leaders,
the rule that "[u]nion officers are duty bound to guide their members to respect the law."46 Contrarily,
if the "officers urge the members to violate the law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or sanction for their unlawful acts."47
Member’s liability depends on participation in illegal acts
Art. 264(a) of the Labor Code provides that a member is liable when he knowingly participates in an
illegal act "during a strike." While the provision is silent on whether the strike is legal or illegal, we
find that the same is irrelevant. As long as the members commit illegal acts, in a legal or illegal
strike, then they can be terminated.48 However, when union members merely participate in an illegal
strike without committing any illegal act, are they liable?
This was squarely answered in Gold City Integrated Port Service, Inc. v. NLRC,49 where it was held
that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. This
was an affirmation of the rulings in Bacus v. Ople50 and Progressive Workers Union v.
Aguas,51 where it was held that though the strike is illegal, the ordinary member who merely
participates in the strike should not be meted loss of employment on the considerations of
compassion and good faith and in view of the security of tenure provisions under the Constitution. In
Esso Philippines, Inc. v. Malayang Manggagawa sa Esso (MME), it was explained that a member is
not responsible for the union’s illegal strike even if he voted for the holding of a strike which became
illegal.52
Noted labor law expert, Professor Cesario A. Azucena, Jr., traced the history relating to the liability
of a union member in an illegal strike, starting with the "rule of vicarious liability," thus:
Under [the rule of vicarious liability], mere membership in a labor union serves as basis of liability for
acts of individuals, or for a labor activity, done on behalf of the union. The union member is made
liable on the theory that all the members are engaged in a general conspiracy, and the unlawful acts
of the particular members are viewed as necessary incidents of the conspiracy. It has been said that
in the absence of statute providing otherwise, the rule of vicarious liability applies.
Even the Industrial Peace Act, however, which was in effect from 1953 to 1974, did not adopt the
vicarious liability concept. It expressly provided that:
No officer or member of any association or organization, and no association or organization

participating or interested in a labor dispute shall be held responsible or liable for the unlawful acts of
individual officers, members, or agents, except upon proof of actual participation in, or actual
authorization of, such acts or of ratifying of such acts after actual knowledge thereof.
Replacing the Industrial Peace Act, the Labor Code has not adopted the vicarious liability rule.53
Thus, the rule on vicarious liability of a union member was abandoned and it is only when a striking
worker "knowingly participates in the commission of illegal acts during a strike" that he will be
penalized with dismissal.
Now, what are considered "illegal acts" under Art. 264(a)?
No precise meaning was given to the phrase "illegal acts." It may encompass a number of acts that
violate existing labor or criminal laws, such as the following:
(1) Violation of Art. 264(e) of the Labor Code which provides that "[n]o person engaged in
picketing shall commit any act of violence, coercion or intimidation or obstruct the free
ingress to or egress from the employer’s premises for lawful purposes, or obstruct public
thoroughfares";
(2) Commission of crimes and other unlawful acts in carrying out the strike;54 and
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in
connection with the assumption of jurisdiction/certification Order under Art. 263(g) of the
Labor Code.
As earlier explained, this enumeration is not exclusive and it may cover other breaches of existing
laws.
In the cases at bench, the individual respondents participated in several mass actions, viz:
(1) The rallies held at the DOLE and BLR offices on February 21, 22, and 23, 2001;
(2) The strikes held on March 17 to April 12, 2001; and
(3) The rallies and picketing on May 23 and 28, 2001 in front of the Toyota Bicutan and Sta.
Rosa plants.
Did they commit illegal acts during the illegal strikes on February 21 to 23, 2001, from March 17 to
April 12, 2001, and on May 23 and 28, 2001?
The answer is in the affirmative.
As we have ruled that the strikes by the Union on the three different occasions were illegal, we now
proceed to determine the individual liabilities of the affected union members for acts committed
during these forbidden concerted actions.
Our ruling in Association of Independent Unions in the Philippines v. NLRC lays down the rule on the
liability of the union members:
Decisive on the matter is the pertinent provisions of Article 264 (a) of the Labor Code that: "[x x x]
any worker [x x x] who knowingly participates in the commission of illegal acts during a strike may be
declared to have lost his employment status. [x x x]" It can be gleaned unerringly from the aforecited
provision of law in point, however, that an ordinary striking employee can not be terminated for mere
participation in an illegal strike. There must be proof that he committed illegal acts during the
strike and the striker who participated in the commission of illegal act[s] must be identified.
But proof beyond reasonable doubt is not required. Substantial evidence available under the
circumstances, which may justify the imposition of the penalty of dismissal, may suffice.
In the landmark case of Ang Tibay vs. CIR, the court ruled "Not only must there be some evidence to
support a finding or conclusion, but the evidence must be ‘substantial.’ Substantial evidence is
more than a mere scintilla. It means such relevant evidence that a reasonable mind might
accept as sufficient to support a conclusion."55 (Emphasis supplied.)
Thus, it is necessary for the company to adduce proof on the participation of the striking employee in
the commission of illegal acts during the strikes.
After a scrutiny of the records, we find that the 227 employees indeed joined the February 21, 22,
and 23, 2001 rallies and refused to render overtime work or report for work. These rallies, as we
earlier ruled, are in reality illegal strikes, as the procedural requirements for strikes under Art. 263
were not complied with. Worse, said strikes were in violation of the company rule prohibiting acts "in
citing or participating in riots, disorders, alleged strikes or concerted action detrimental to Toyota’s
interest."
With respect to the February 21, 22, and 23, 2001 concerted actions, Toyota submitted the list of
employees who did not render overtime work on February 21, 2001 and who did not report for work
on February 22 and 23, 2001 as shown by Annex "I" of Toyota’s Position Paper in NLRC Certified
Case No. 000203-01 entitled In Re: Labor Dispute at Toyota Motor Philippines Corp. The employees
who participated in the illegal concerted actions were as follows:
1. Aclan, Eugenio; 2. Agosto, Joel; 3. Agot, Rodelio; 4. Alarana, Edwin; 5. Alejo, Alex; 6. Alfonso,
Erwin; 7. Apolinario, Dennis; 8. Apostol, Melvin; 9. Arceta, Romel; 10. Arellano, Ruel; 11. Ariate,
Abraham; 12. Arollado, Daniel; 13. Arriola, Dominador; 14. Atun, Lester; 15. Bala, Rizalino; 16.
Baluyut, Rolando; 17. Banzuela, Tirso Jr.; 18. Bayani, Roderick; 19. Benabise, Sabas Jr.; 20.
Berces, Abel; 21. Bering, Benny; 22. Birondo, Alberto; 23. Blanco, Melchor; 24. Bolanos, Dexter; 25.
Bolocon, Jerry; 26. Borebor, Rurel; 27. Borromeo, Jubert; 28. Borsigue, Antonio; 29. Bulan, Elmer;
30. Busano, Freddie; 31. Bustillo, Ernesto Jr.; 32. Caalim, Alexander; 33. Cabahug, Nelson; 34.
Cabatay, Jessie; 35. Cabezas, Marcelo; 36. Calalang, Richard; 37. Candelario, Roque Jr.; 38.
Capate, Leo Nelson; 39. Carandang, Resty; 40. Caraqueo, Lorenzo; 41. Caringal, Dennis; 42.
Casaba, Gienell; 43. Catapusan, Christopher; 44. Catral, Rico; 45. Cecilio, Felipe; 46. Cinense,
Joey; 47. Cometa, Julius; 48. Completo, Emilio; 49. Consignado, Randy; 50. Coral, Jay Antonio; 51.
Correa, Claudio Jr.; 52. Cuevas, Reynaldo; 53. Dacalcap, Albert; 54. Dakay, Ryan; 55. Dalanon,
Herbert; 56. Dalisay, Rene; 57. David, Benigno Jr.; 58. De Guzman, Joey; 59. Dela Cruz, Basilio; 60.
Dela Cruz, Ferdinand; 61. Dela Torre, Heremo; 62. De Leon, Leonardo; 63. Delos Santos, Rogelio;
64. De Ocampo, Joselito; 65. De Silva, Leodegario; 66. Del Mundo, Alex; 67. Del Rio, Rey; 68. Dela
Ysla, Alex; 69. Dia, Frank Manuel; 70. Dimayuga, Antonio; 71. Dingcong, Jessiah; 72. Dumalag,
Jasper; 73. Duyag, Aldrin; 74. Ercillo, Armando; 75. Espadilla, Delmar; 76. Espejo, Lionel; 77.
Espeloa, Dennis; 78. Esteva, Alexander; 79. Estole, Francisco; 80. Fajardo, George; 81. Fajilagutan,
Jason; 82. Fajura, John; 83. Franco, Melencio; 84. Franco, Nikko; 85. Fulgar, Dexter; 86. Fulo,
Dante; 87. Gado, Eduardo; 88. Galang, Erwin; 89. Gamit, Rodel; 90. Garces, Robin; 91. Garcia,
Ariel; 92. Gaspi, Ronald; 93. Gavarra, Angelo; 94. Gerola, Genaro Jr.; 95. Gerola, Larry; 96.
Gohilde, Michael; 97. Gojar, Regino; 98. Gojar, Reynaldo; 99. Gonzales, Roberto; 100. Gutierrez,
Bernabe; 101. Hilaga, Edgar; 102. Hilanga, Melchor; 103. Hondrada, Eugene Jay; 104. Imperial,
Alejandro; 105. Jaen, Ferdinand; 106. Jalea, Philip; 107. Javillonar, Joey; 108. Julve, Frederick; 109.
Lalisan, Victorio; 110. Landicho, Danny; 111. Laqui, Basilio; 112. Lavide, Edgar; 113. Lazaro,
Orlando; 114. Legaspi, Noel; 115. Lising, Reynaldo Jr.; 116. Llanera, Joey; 117. Lomboy, Alberto;
118. Lopez, Geronimo; 119. Lozada, Jude Jonobell; 120. Lucido, Johny; 121. Macalindong,
Rommel; 122. Madrazo, Nixon; 123. Magbalita, Valentin; 124. Magistrado, Rogelio Jr.; 125.
Magnaye, Philip John; 126. Malabanan, Allan John; 127. Malabrigo, Angelito; 128. Malaluan,
Rolando Jr.; 129. Malate, Leoncio Jr.; 130. Maleon, Paulino; 131. Manaig, Roger; 132. Manalang,
Joseph Patrick; 133. Manalo, Manuel Jr.; 134. Manaog, Jonamar; 135. Manaog, Melchor; 136.
Mandolado, Melvin; 137. Maneclang, Jovito; 138. Manego, Ruel; 139. Manguil, Bayani Jr.; 140.
Manigbas, June; 141. Manjares, Alfred; 142. Manzanilla, Edwin; 143. Marasigan, Carlito; 144.
Marcial, Nilo; 145. Mariano, Rommel; 146. Mata, Mayo; 147. Mendoza, Bobit; 148. Mendoza,
Roberto; 149. Milan, Joseph; 150. Miranda, Eduardo; 151. Miranda, Luis; 152. Montero, Ericson;
153. Montero, Marlaw; 154. Montes, Ruel; 155. Morales, Dennis; 156. Natividad, Kenneth; 157.
Nava, Ronaldo; 158. Nevalga, Alexander; 159. Nicanor, Edwin; 160. Nierves, Roderick; 161. Nunez,
Alex; 162. Nunez, Lolito; 163. Obe, Victor; 164. Oclarino, Alfonso; 165. Ojenal, Leo; 166. Olit,
Freddie; 167. Oliver, Rex; 168. Oliveria, Charlie; 169. Operana, Danny; 170. Oriana, Allan; 171.
Ormilla, Larry; 172. Ortiz, Felimon; 173. Paniterce, Alvin; 174. Parallag, Gerald; 175. Pecayo, Edwin;
176. Pena, Erwin; 177. Penamante, Jowald; 178. Piamonte, Melvin; 179. Piamonte, Rogelio; 180.
Platon, Cornelio; 181. Polutan, Jorge; 182. Posada, John; 183. Puno, Manjolito; 184. Ramos, Eddie;
185. Reyes, Rolando; 186. Roxas, Philip; 187. Sales, Paul Arthur; 188. Sallan, David Jr.; 189.
Salvador, Bernardo; 190. Sampang, Alejandro; 191. San Pablo, Baldwin; 192. Sangalang, Jeffrey;
193. Santiago, Eric; 194. Santos, Raymond; 195. Sapin, Al Jose; 196. Saquilabon, Bernabe; 197.
Serrano, Ariel; 198. Sierra, Alex; 199. Simborio, Romualdo; 200. Sulit, Lauro; 201. Tabirao,
Elvisanto; 202. Tablizo, Edwin; 203. Taclan, Petronio; 204. Tagala, Rommel; 205. Tagle, Wilfredo
Jr.; 206. Tecson Alexander; 207. Templo, Christopher; 208. Tenorio, Roderick; 209. Tolentino,
Rodel; 210. Tolentino, Rommel; 211. Tolentino, Romulo Jr.; 212. Tomas, Rolando; 213. Topaz,
Arturo Sr.; 214. Toral, Grant Robert; 215. Torres, Dennis; 216. Torres, Federico; 217. Trazona, Jose
Rommel; 218. Tulio, Emmanuel; 219. Umiten, Nestor Jr.; 220. Vargas, Joseph; 221. Vergara, Allan;
222. Vergara, Esdwin; 223. Violeta, Apollo Sr.; 224. Vistal, Alex; 225. Yangyon, Michael Teddy; 226.
Zaldevar, Christopher; and 227. Zamora, Dominador Jr.
Toyota’s Position Paper containing the list of striking workers was attested to as true and correct
under oath by Mr. Jose Ma. Aligada, First Vice President of the Group Administration Division of
Toyota. Mr. Emerito Dumaraos, Assistant Department Manager of the Production Department of
Toyota, likewise submitted a June 29, 2001 Affidavit56 confirming the low attendance of employees
on February 21, 22, and 23, 2001, which resulted from the intentional absences of the aforelisted
striking workers. The Union, on the other hand, did not refute Toyota’s categorical assertions on the
participation of said workers in the mass actions and their deliberate refusal to perform their
assigned work on February 21, 22, and 23, 2001. More importantly, it did not deny the fact of
absence of the employees on those days from the Toyota manufacturing plants and their deliberate
refusal to render work. Their admission that they participated in the February 21 to 23, 2001 mass
actions necessarily means they were absent from their work on those days.
Anent the March 28 to April 12, 2001 strikes, evidence is ample to show commission of illegal acts
like acts of coercion or intimidation and obstructing free ingress to or egress from the company
premises. Mr. Eduardo Nicolas III, Toyota’s Security Chief, attested in his affidavit that the strikers
"badmouthed people coming in and shouted invectives such as bakeru at Japanese officers of the
company." The strikers even pounded the vehicles of Toyota officials. More importantly, they
prevented the ingress of Toyota employees, customers, suppliers, and other persons who wanted to
transact business with the company. These were patent violations of Art. 264(e) of the Labor Code,
and may even constitute crimes under the Revised Penal Code such as threats or coercion among
others.
On March 28, 2001, the following have committed illegal acts––blocking the ingress to or egress
from the two (2) Toyota plants and preventing the ingress of Toyota employees on board the
company shuttle–– at the Bicutan and Sta. Rosa Plants, viz:
1. Grant Robert Toral; 2. John Posadas; 3. Alex Sierra; 4. Allan John Malabanan; 5. Abel Berces; 6.
Ariel Garcia; 7. Charlie Oliveria; 8. Manjolito Puno; 9. Baldwin San Pablo; 10. Federico Torres; 11.
Larry Gerola; 12. Roderick Bayani; 13. Allan Oclarino; 14. Reynaldo Cuevas; 15. George Polutan;
16. Arman Ercillo; 17. Joey Llanera; and 18. Roberto Gonzales
Photographs were submitted by Toyota marked as Annexes "1" through "18" of its Position Paper,
vividly showing the participation of the aforelisted employees in illegal acts.57
To further aggravate the situation, a number of union members committed illegal acts (blocking the
ingress to and egress from the plant) during the strike staged on March 29, 2001 at the Toyota plant
in Bicutan, to wit:
1. Basilio Laqui; 2. Sabas Benabise; 3. Federico Torres; 4. Freddie Olit; and 5. Joel Agosto
Pictures marked as Annexes "21" to "22" of Toyota’s Position Paper reveal the illegal acts committed
by the aforelisted workers.58
On the next day, March 30, 2001, several employees again committed illegal acts (blocking ingress
to and egress from the plant) during the strike at the Bicutan plant, to wit:
1. Ariel Garcia; 2. Edgar Hilaga; 3. Charlie Oliveria; 4. Ferdinand Jaen; 5. Wilfredo Tagle; 6.
Alejandro Imperial; 7. Manjolito Puno; 8. Delmar Espadilla; 9. Apollo Violeta; and 10. Elvis Tabirao
Pictures marked as Annexes "25" to "26" and "28" of Toyota’s Position Paper show the participation
of these workers in unlawful acts.59
On April 5, 2001, seven (7) Toyota employees were identified to have committed illegal acts
(blocking ingress to and egress from the plant) during the strike held at the Bicutan plant, to wit:
1. Raymund Santos; 2. Elvis Tabirao; 3. Joseph Vargas; 4. Bernardo Salvador; 5. Antonio

Dimayuga; 6. Rurel Borebor; and 7. Alberto Lomboy
The participations of the strikers in illegal acts are manifest in the pictures marked as Annexes "32"
and "33" of Toyota’s Position Paper.60
On April 6, 2001, only Rogelio Piamonte was identified to have committed illegal acts (blocking
ingress to and egress from the Toyota plant) during the strike at the Toyota Santa Rosa
plant.61 Then, on April 9, 2001, Alvin Paniterce, Dennis Apolinario, and Eduardo Miranda62 were
identified to have committed illegal acts (blocking ingress to and egress from the Toyota plant)
during the strike at the Toyota Santa Rosa plant and were validly dismissed by Toyota.
Lastly, the strikers, though on payroll reinstatement, staged protest rallies on May 23, 2001 and May
28, 2001 in front of the Bicutan and Sta. Rosa plants. These workers’ acts in joining and participating
in the May 23 and 28, 2001 rallies or pickets were patent violations of the April 10, 2001 assumption
of jurisdiction/certification Order issued by the DOLE Secretary, which proscribed the commission of
acts that might lead to the "worsening of an already deteriorated situation." Art. 263(g) is clear that
strikers who violate the assumption/certification Order may suffer dismissal from work. This was the
situation in the May 23 and 28, 2001 pickets and concerted actions, with the following employees
who committed illegal acts:
a. Strikers who joined the illegal pickets on May 23, 2001 were (1) Dennis Apolinario; (2) Abel
Berces; (3) Benny Bering; (4) Dexter Bolaños; (5) Freddie Busano; (6) Ernesto Bustillo, Jr.; (7)
Randy Consignado; (8) Herbert Dalanon; (9) Leodegario De Silva; (10) Alexander Esteva; (11)
Jason Fajilagutan; (12) Nikko Franco; (13) Genaro Gerola, Jr.; (14) Michael Gohilde; (15) Rogelio
Magistrado; (16) Rolando Malaluan, Jr.; (17) Leoncio Malate, Jr.; (18) Edwin Manzanilla; (19) Nila
Marcial; (20) Roderick Nierves; (21) Larry Ormilla; (22) Filemon Ortiz; (23) Cornelio Platon; (24)
Alejandro Sampang; (25) Eric Santiago; (26) Romualdo Simborio; (27) Lauro Sulit; and (28) Rommel
Tagala.
Pictures show the illegal acts (participation in pickets/strikes despite the issuance of a return-to-work
order) committed by the aforelisted strikers.63
b. Strikers who participated in the May 28, 2001 were (1) Joel Agosto; (2) Alex Alejo; (3) Erwin
Alfonso; (4) Dennis Apolinario; (5) Melvin Apostol; (6) Rommel Arceta; (7) Lester Atun; (8) Abel
Berces; (9) Benny Bering; (10) Dexter Bolanos; (11) Marcelo Cabezas; (12) Nelson Leo Capate; (13)
Lorenzo Caraqueo; (14) Christopher Catapusan; (15) Ricky Chavez; (16) Virgilio Colandog; (17)
Claudio Correa; (18) Ed Cubelo; (19) Reynaldo Cuevas; (20) Rene Dalisay; (21) Benigno David, Jr.;
(22) Alex Del Mundo; (23) Basilio Dela Cruz; (24) Roel Digma; (25) Aldrin Duyag; (26) Armando
Ercillo; (27) Delmar Espadilla; (28) Alexander Esteva; (29) Nikko Franco; (30) Dexter Fulgar; (31)
Dante Fulo; (32) Eduardo Gado; (33) Michael Gohilde; (34) Eugene Jay Hondrada II; (35) Joey
Javillonar; (36) Basilio Laqui; (37) Alberto Lomboy; (38) Geronimo Lopez; (39) Rommel Macalindog;
(40) Nixon Madrazo; (41) Valentin Magbalita; (42) Allan Jon Malabanan; (43) Jonamar Manaog; (44)
Bayani Manguil; (45) June Manigbas; (46) Alfred Manjares; (47) Edwin Manzanilla; (48) Mayo Mata;
(49) Leo Ojenal; (50) Allan Oriana; (51) Rogelio Piamonte; (52) George Polutan; (53) Eric Santiago;
(54) Bernabe Saquilabon; (55) Alex Sierra; (56) Romualdo Simborio; (57) Lauro Sulit; (58) Elvisanto
Tabirao; (59) Edwin Tablizo; (60) Emmanuel Tulio; (61) Nestor Umiten; (62) Joseph Vargas; (63)
Edwin Vergara; and (64) Michael Teddy Yangyon.
Toyota presented photographs which show said employees conducting mass pickets and concerted
actions.64
Anent the grant of severance compensation to legally dismissed union members, Toyota assails the
turn-around by the CA in granting separation pay in its June 20, 2003 Resolution after initially
denying it in its February 27, 2003 Decision. The company asseverates that based on the CA finding
that the illegal acts of said union members constitute gross misconduct, not to mention the huge
losses it suffered, then the grant of separation pay was not proper.
The general rule is that when just causes for terminating the services of an employee under Art. 282
of the Labor Code exist, the employee is not entitled to separation pay. The apparent reason behind
the forfeiture of the right to termination pay is that lawbreakers should not benefit from their illegal
acts. The dismissed employee, however, is entitled to "whatever rights, benefits and privileges [s/he]
may have under the applicable individual or collective bargaining agreement with the employer or
voluntary employer policy or practice"65 or under the Labor Code and other existing laws. This means
that the employee, despite the dismissal for a valid cause, retains the right to receive from the
employer benefits provided by law, like accrued service incentive leaves. With respect to benefits
granted by the CBA provisions and voluntary management policy or practice, the entitlement of the
dismissed employees to the benefits depends on the stipulations of the CBA or the company rules
and policies.
As in any rule, there are exceptions. One exception where separation pay is given even though an
employee is validly dismissed is when the court finds justification in applying the principle of social
justice well entrenched in the 1987 Constitution. In Phil. Long Distance Telephone Co. (PLDT) v.
NLRC, the Court elucidated why social justice can validate the grant of separation pay, thus:
The reason is that our Constitution is replete with positive commands for the promotion of social
justice, and particularly the protection of the rights of the workers. The enhancement of their welfare
is one of the primary concerns of the present charter. In fact, instead of confining itself to the general
commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the
new Constitution contains a separate article devoted to the promotion of social justice and human
rights with a separate sub-topic for labor. Article XIII expressly recognizes the vital role of labor,
hand in hand with management, in the advancement of the national economy and the welfare of the
people in general. The categorical mandates in the Constitution for the improvement of the lot of the
workers are more than sufficient basis to justify the award of separation pay in proper cases even if
the dismissal be for cause.66
In the same case, the Court laid down the rule that severance compensation shall be allowed only
when the cause of the dismissal is other than serious misconduct or that which reflects adversely on
the employee’s moral character. The Court succinctly discussed the propriety of the grant of
separation pay in this wise:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his
dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of
course it has. Indeed, if the employee who steals from the company is granted separation pay even
as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like leniency if he is again found out. This kind of
misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone
the offense. Compassion for the poor is an imperative of every humane society but only when the
recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be
refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty.
Those who invoke social justice may do so only if their hands are clean and their motives blameless
and not simply because they happen to be poor. This great policy of our Constitution is not meant for
the protection of those who have proved they are not worthy of it, like the workers who have tainted
the cause of labor with the blemishes of their own character.67
Explicit in PLDT are two exceptions when the NLRC or the courts should not grant separation pay
based on social justice¾serious misconduct (which is the first ground for dismissal under Art. 282) or
acts that reflect on the moral character of the employee. What is unclear is whether the ruling
likewise precludes the grant of separation pay when the employee is validly terminated from work on
grounds laid down in Art. 282 of the Labor Code other than serious misconduct.
A recall of recent cases decided bearing on the issue reveals that when the termination is legally
justified on any of the grounds under Art. 282, separation pay was not allowed. In Ha Yuan
Restaurant v. NLRC,68 we deleted the award of separation pay to an employee who, while
unprovoked, hit her co-worker’s face, causing injuries, which then resulted in a series of fights and
scuffles between them. We viewed her act as serious misconduct which did not warrant the award of
separation pay. In House of Sara Lee v. Rey,69 this Court deleted the award of separation pay to a
branch supervisor who regularly, without authorization, extended the payment deadlines of the
company’s sales agents. Since the cause for the supervisor’s dismissal involved her integrity (which
can be considered as breach of trust), she was not worthy of compassion as to deserve separation
pay based on her length of service. In Gustilo v. Wyeth Phils., Inc.,70 this Court found no exceptional
circumstance to warrant the grant of financial assistance to an employee who repeatedly violated the
company’s disciplinary rules and regulations and whose employment was thus terminated for gross
and habitual neglect of his duties. In the doctrinal case of San Miguel v. Lao,71 this Court reversed
and set aside the ruling of the CA granting retirement benefits or separation pay to an employee who
was dismissed for willful breach of trust and confidence by causing the delivery of raw materials,
which are needed for its glass production plant, to its competitor. While a review of the case reports
does not reveal a case involving a termination by reason of the commission of a crime against the
employer or his/her family which dealt with the issue of separation pay, it would be adding insult to
injury if the employer would still be compelled to shell out money to the offender after the harm done.
In all of the foregoing situations, the Court declined to grant termination pay because the causes for
dismissal recognized under Art. 282 of the Labor Code were serious or grave in nature and attended
by willful or wrongful intent or they reflected adversely on the moral character of the employees. We
therefore find that in addition to serious misconduct, in dismissals based on other grounds under Art.
282 like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and
commission of a crime against the employer or his family, separation pay should not be conceded to
the dismissed employee.
In analogous causes for termination like inefficiency, drug use, and others, the NLRC or the courts
may opt to grant separation pay anchored on social justice in consideration of the length of service
of the employee, the amount involved, whether the act is the first offense, the performance of the
employee and the like, using the guideposts enunciated in PLDT on the propriety of the award of
separation pay.
In the case at bench, are the 227 striking employees entitled to separation pay?
In the instant case, the CA concluded that the illegal strikes committed by the Union members
constituted serious misconduct.72
The CA ratiocinated in this manner:
Neither can social justice justify the award to them of severance compensation or any other form of
financial assistance. x x x
xxxx
Considering that the dismissal of the employees was due to their participation in the illegal strikes as
well as violation of the Code of Conduct of the company, the same constitutes serious misconduct. A
serious misconduct is a transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment. In fact, in Panay Electric Company, Inc. v. NLRC, the Supreme Court nullified the grant of
separation benefits to employees who unlawfully participated in an illegal strike in light of Article 264,
Title VIII, Book V of the Labor Code, that, "any union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status."
The constitutional guarantee on social justice is not intended only for the poor but for the rich as well.
It is a policy of fairness to both labor and management.73 (Emphasis supplied.)
In disposing of the Union’s plea for reconsideration of its February 27, 2003 Decision, the CA
however performed a volte-face by reinstating the award of separation pay.
The CA’s grant of separation pay is an erroneous departure from our ruling in Phil. Long Distance
Telephone Co. v. NLRC that serious misconduct forecloses the award of separation pay. Secondly,
the advertence to the alleged honest belief on the part of the 227 employees that Toyota committed
a breach of the duty to bargain collectively and an abuse of valid exercise of management
prerogative has not been substantiated by the evidence extant on record. There can be no good
faith in intentionally incurring absences in a collective fashion from work on February 22 and 23,
2001 just to attend the DOLE hearings. The Union’s strategy was plainly to cripple the operations
and bring Toyota to its knees by inflicting substantial financial damage to the latter to compel union
recognition. The Union officials and members are supposed to know through common sense that
huge losses would befall the company by the abandonment of their regular work. It was not disputed
that Toyota lost more than PhP 50 million because of the willful desertion of company operations in
February 2001 by the dismissed union members. In addition, further damage was experienced by
Toyota when the Union again resorted to illegal strikes from March 28 to April 12, 2001, when the
gates of Toyota were blocked and barricaded, and the company officials, employees, and customers
were intimidated and harassed. Moreover, they were fully aware of the company rule on prohibition
against concerted action inimical to the interests of the company and hence, their resort to mass
actions on several occasions in clear violation of the company regulation cannot be excused nor
justified. Lastly, they blatantly violated the assumption/certification Order of the DOLE Secretary,
exhibiting their lack of obeisance to the rule of law. These acts indeed constituted serious
misconduct.
A painstaking review of case law renders obtuse the Union’s claim for separation pay. In a slew of
cases, this Court refrained from awarding separation pay or financial assistance to union officers and
members who were separated from service due to their participation in or commission of illegal acts
during strikes. In the recent case of Pilipino Telephone Corporation v. Pilipino Telephone Employees
Association (PILTEA),74 this Court upheld the dismissal of union officers who participated and openly
defied the return-to-work order issued by the DOLE Secretary. No separation pay or financial
assistance was granted. In Sukhothai Cuisine and Restaurant v. Court of Appeals,75 this Court
declared that the union officers who participated in and the union members who committed illegal
acts during the illegal strike have lost their employment status. In this case, the strike was held illegal
because it violated agreements providing for arbitration. Again, there was no award of separation
pay nor financial assistance. In Philippine Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel
Employees Union,76 the strike was declared illegal because the means employed was illegal. We
upheld the validity of dismissing union members who committed illegal acts during the strike, but
again, without awarding separation pay or financial assistance to the erring employees.
In Samahang Manggagawa sa Sulpicio Lines, Inc. v. Sulpicio Lines,77 this Court upheld the dismissal
of union officers who participated in an illegal strike sans any award of separation pay. Earlier,
in Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied
Industries,78 we affirmed the dismissal of the Union’s officers who participated in an illegal strike
without awarding separation pay, despite the NLRC’s declaration urging the company to give
financial assistance to the dismissed employees.79 In Interphil Laboratories Union-FFW, et al. v.
Interphil Laboratories, Inc.,80 this Court affirmed the dismissal of the union officers who led the
concerted action in refusing to render overtime work and causing "work slowdowns." However, no
separation pay or financial assistance was allowed. In CCBPI Postmix Workers Union v. NLRC,81 this
Court affirmed the dismissal of union officers who participated in the strike and the union members
who committed illegal acts while on strike, without awarding them separation pay or financial
assistance. In 1996, in Allied Banking Corporation v. NLRC,82 this Court affirmed the dismissal of
Union officers and members, who staged a strike despite the DOLE Secretary’s issuance of a return
to work order but did not award separation pay. In the earlier but more relevant case of Chua v.
NLRC,83 this Court deleted the NLRC’s award of separation benefits to an employee who
participated in an unlawful and violent strike, which strike resulted in multiple deaths and extensive
property damage. In Chua, we viewed the infractions committed by the union officers and members
as a serious misconduct which resulted in the deletion of the award of separation pay in
conformance to the ruling in PLDT. Based on existing jurisprudence, the award of separation pay to
the Union officials and members in the instant petitions cannot be sustained.
One last point to consider—it is high time that employer and employee cease to view each other as
adversaries and instead recognize that theirs is a symbiotic relationship, wherein they must rely on
each other to ensure the success of the business. When they consider only their own self-interests,
and when they act only with their own benefit in mind, both parties suffer from short-sightedness,
failing to realize that they both have a stake in the business. The employer wants the business to
succeed, considering the investment that has been made. The employee in turn, also wants the
business to succeed, as continued employment means a living, and the chance to better one’s lot in
life. It is clear then that they both have the same goal, even if the benefit that results may be greater
for one party than the other. If this becomes a source of conflict, there are various, more amicable
means of settling disputes and of balancing interests that do not add fuel to the fire, and instead
open avenues for understanding and cooperation between the employer and the employee. Even
though strikes and lockouts have been recognized as effective bargaining tools, it is an antiquated
notion that they are truly beneficial, as they only provide short-term solutions by forcing concessions
from one party; but staging such strikes would damage the working relationship between employers
and employees, thus endangering the business that they both want to succeed. The more
progressive and truly effective means of dispute resolution lies in mediation, conciliation, and
arbitration, which do not increase tension but instead provide relief from them. In the end, an
atmosphere of trust and understanding has much more to offer a business relationship than the
traditional enmity that has long divided the employer and the employee.
WHEREFORE, the petitions in G.R. Nos. 158786 and 158789 are DENIED while those in G.R. Nos.
158798-99 are GRANTED.
The June 20, 2003 CA Resolution in CA-G.R. SP Nos. 67100 and 67561 restoring the grant of
severance compensation is ANNULLED and SET ASIDE.
The February 27, 2003 CA Decision in CA-G.R. SP Nos. 67100 and 67561, which affirmed the
August 9, 2001 Decision of the NLRC but deleted the grant of severance compensation, is
REINSTATED and AFFIRMED.
No costs.
SO ORDERED.

Associate Justice
WE CONCUR:
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES

DANTE O. TINGA
Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
REYNATO S. PUNO
Chief Justice
Footnotes
1
Rollo (G.R. Nos. 158786 & 158789), pp. 74-94. The Decision was penned by Associate
Justice Josefina Guevara-Salonga and concurred in by Associate Justices Marina L. Buzon
and Danilo B. Pine.
Id. at 101-123. The per curiam Decision was signed by Presiding Commissioner Raul T.
2
Aquino and Commissioners Victoriano R. Calaycay and Angelita A. Gacutan.
3
Id. at 124-135. The Resolution was penned by Commissioner Victoriano R. Calaycay and
concurred in by Presiding Commissioner Raul T. Aquino and Commissioner Angelita A.
Gacutan.
4
Rollo (G.R. Nos. 158798-99), pp. 41-44.
5
Rollo (G.R. Nos. 158786 and 158789), p. 18.
6
Id. at 19.
7
8
Id. at 75-76.
9
Rollo (G.R. Nos. 158798-99), pp. 154 & 190.
10
11
Rollo (G.R. Nos. 158798-99), pp. 308-309; NLRC Records, Volume II, Toyota’s Position
12
Paper, Annex "L."
13
Id. at 312-313.
14
Id. at 107-112; rollo (G.R. Nos. 158798-99), pp. 330-333. The 227 dismissed employees
15
were the following:

1. Aclan, Eugenio; 2. Agosto, Joel; 3. Agot, Rodelio; 4. Alarana, Edwin; 5. Alejo,
Alex; 6. Alfonso, Erwin; 7. Apolinario, Dennis; 8. Apostol, Melvin; 9. Arceta, Romel;
10. Arellano, Ruel; 11. Ariate, Abraham; 12. Arollado, Daniel; 13. Arriola, Dominador;
14. Atun, Lester; 15. Bala, Rizalino; 16. Baluyut, Rolando; 17. Banzuela, Tirso Jr.;
18. Bayani, Roderick; 19. Benabise, Sabas Jr.; 20. Berces, Abel; 21. Bering, Benny;
22. Birondo, Alberto; 23. Blanco, Melchor; 24. Bolanos, Dexter; 25. Bolocon, Jerry;
26. Borebor, Rurel; 27. Borromeo, Jubert; 28. Borsigue, Antonio; 29. Bulan, Elmer;
30. Busano, Freddie; 31. Bustillo, Ernesto Jr.; 32. Caalim, Alexander; 33. Cabahug,
Nelson; 34. Cabatay, Jessie; 35. Cabezas, Marcelo; 36. Calalang, Richard; 37.
Candelario, Roque Jr.; 38. Capate, Leo Nelson; 39. Carandang, Resty; 40.
Caraqueo, Lorenzo; 41. Caringal, Dennis; 42. Casaba, Gienell; 43. Catapusan,
Christopher; 44. Catral, Rico; 45. Cecilio, Felipe; 46. Cinense, Joey; 47. Cometa,
Julius; 48. Completo, Emilio; 49. Consignado, Randy; 50. Coral, Jay Antonio; 51.
Correa, Claudio Jr.; 52. Cuevas, Reynaldo; 53. Dacalcap, Albert; 54. Dakay, Ryan;
55. Dalanon, Herbert; 56. Dalisay, Rene; 57. David, Benigno Jr.; 58. De Guzman,
Joey; 59. Dela Cruz, Basilio; 60. Dela Cruz, Ferdinand; 61. Dela Torre, Heremo; 62.
De Leon, Leonardo; 63. Delos Santos, Rogelio; 64. De Ocampo, Joselito; 65. De
Silva, Leodegario; 66. Del Mundo, Alex; 67. Del Rio, Rey; 68. Dela Ysla, Alex; 69.
Dia, Frank Manuel; 70. Dimayuga, Antonio; 71. Dingcong, Jessiah; 72. Dumalag,
Jasper; 73. Duyag, Aldrin; 74. Ercillo, Armando; 75. Espadilla, Delmar; 76. Espejo,
Lionel; 77. Espeloa, Dennis; 78. Esteva, Alexander; 79. Estole, Francisco; 80.
Fajardo, George; 81. Fajilagutan, Jason; 82. Fajura, John; 83. Franco, Melencio; 84.
Franco, Nikko; 85. Fulgar, Dexter; 86. Fulo, Dante; 87. Gado, Eduardo; 88. Galang,
Erwin; 89. Gamit, Rodel; 90. Garces, Robin; 91. Garcia, Ariel; 92. Gaspi, Ronald; 93.
Gavarra, Angelo; 94. Gerola, Genaro Jr.; 95. Gerola, Larry; 96. Gohilde, Michael; 97.
Gojar, Regino; 98. Gojar, Reynaldo; 99. Gonzales, Roberto; 100. Gutierrez, Bernabe;
101. Hilaga, Edgar; 102. Hilanga, Melchor; 103. Hondrada, Eugene Jay; 104.
Imperial, Alejandro; 105. Jaen, Ferdinand; 106. Jalea, Philip; 107. Javillonar, Joey;
108. Julve, Frederick; 109. Lalisan, Victorio; 110. Landicho, Danny; 111. Laqui,
Basilio; 112. Lavide, Edgar; 113. Lazaro, Orlando; 114. Legaspi, Noel; 115. Lising,
Reynaldo Jr.; 116. Llanera, Joey; 117. Lomboy, Alberto; 118. Lopez, Geronimo; 119.
Lozada, Jude Jonobell; 120. Lucido, Johny; 121. Macalindong, Rommel; 122.
Madrazo, Nixon; 123. Magbalita, Valentin; 124. Magistrado, Rogelio Jr.; 125.
Magnaye, Philip John; 126. Malabanan, Allan John; 127. Malabrigo, Angelito; 128.
Malaluan, Rolando Jr.; 129. Malate, Leoncio Jr.; 130. Maleon, Paulino; 131. Manaig,
Roger; 132. Manalang, Joseph Patrick; 133. Manalo, Manuel Jr.; 134. Manaog,
Jonamar; 135. Manaog, Melchor; 136. Mandolado, Melvin; 137. Maneclang, Jovito;
138. Manego, Ruel; 139. Manguil, Bayani Jr.; 140. Manigbas, June; 141. Manjares,
Alfred; 142. Manzanilla, Edwin; 143. Marasigan, Carlito; 144. Marcial, Nilo; 145.
Mariano, Rommel; 146. Mata, Mayo; 147. Mendoza, Bobit; 148. Mendoza, Roberto;
149. Milan, Joseph; 150. Miranda, Eduardo; 151. Miranda, Luis; 152. Montero,
Ericson; 153. Montero, Marlaw; 154. Montes, Ruel; 155. Morales, Dennis; 156.
Natividad, Kenneth; 157. Nava, Ronaldo; 158. Nevalga, Alexander; 159. Nicanor,
Edwin; 160. Nierves, Roderick; 161. Nunez, Alex; 162. Nunez, Lolito; 163. Obe,
Victor; 164. Oclarino, Alfonso; 165. Ojenal, Leo; 166. Olit, Freddie; 167. Oliver, Rex;
168. Oliveria, Charlie; 169. Operana, Danny; 170. Oriana, Allan; 171. Ormilla, Larry;
172. Ortiz, Felimon; 173. Paniterce, Alvin; 174. Parallag, Gerald; 175. Pecayo,
Edwin; 176. Pena, Erwin; 177. Penamante, Jowald; 178. Piamonte, Melvin; 179.
Piamonte, Rogelio; 180. Platon, Cornelio; 181. Polutan, Jorge; 182. Posada, John;
183. Puno, Manjolito; 184. Ramos, Eddie; 185. Reyes, Rolando; 186. Roxas, Philip;
187. Sales, Paul Arthur; 188. Sallan, David Jr.; 189. Salvador, Bernardo; 190.
Sampang, Alejandro; 191. San Pablo, Baldwin; 192. Sangalang, Jeffrey; 193.
Santiago, Eric; 194. Santos, Raymond; 195. Sapin, Al Jose; 196. Saquilabon,
Bernabe; 197. Serrano, Ariel; 198. Sierra, Alex; 199. Simborio, Romualdo; 200. Sulit,
Lauro; 201. Tabirao, Elvisanto; 202. Tablizo, Edwin; 203. Taclan, Petronio; 204.
Tagala, Rommel; 205. Tagle, Wilfredo Jr.; 206. Tecson Alexander; 207. Templo,
Christopher; 208. Tenorio, Roderick; 209. Tolentino, Rodel; 210. Tolentino, Rommel;
211. Tolentino, Romulo Jr.; 212. Tomas, Rolando; 213. Topaz, Arturo Sr.; 214. Toral,
Grant Robert; 215. Torres, Dennis; 216. Torres, Federico; 217. Trazona, Jose
Rommel; 218. Tulio, Emmanuel; 219. Umiten, Nestor Jr.; 220. Vargas, Joseph; 221.
Vergara, Allan; 222. Vergara, Esdwin; 223. Violeta, Apollo Sr.; 224. Vistal, Alex; 225.
Yangyon, Michael Teddy; 226. Zaldevar, Christopher; and 227. Zamora, Dominador
Jr.
Rollo (G.R. Nos. 158798-99), p. 334; NLRC Records Certified Case No. 000203-01,
16
Volume II, Toyota’s Position Paper, Annex "U-1."
17
Id. at 335-336; id., Annex "V."
18
19
Id.; NLRC Records Certified Case No. 000203-01, Volume VI, Toyota’s Petition to Declare
the Strike Illegal.
20
Rollo (G.R. Nos. 158798-99), pp. 371-374.
The parties’ names in boldface were already included in the list containing the 227
21
dismissed employees.
22
23
Supra note 3.
24
Supra note 2.
25
Supra note 1.
26
27
28
Rollo (G.R. Nos. 158786 and 158789), pp. 96-99.
G.R. No. 169091, February 16, 2006, 482 SCRA 562, 568; citing Villaluz v. Ligon, G.R. No.
29
143721, August 31, 2005, 468 SCRA 486, 501.
Chua v. Torres, G.R. No. 151900, August 30, 2005, 468 SCRA 358, 365; citing Torres v.
30
Specialized Packaging Development Corporation, G.R. No. 149634, July 6, 2004, 433 SCRA
455, 463; Bank of the Philippine Islands v. Court of Appeals, 450 Phil. 532, 540
(2003); Shipside Incorporated v. Court of Appeals, G.R. No. 143377, February 20, 2001, 352
SCRA 334, 346.
Torres v. Specialized Packaging Development Corporation, G.R. No. 149634, July 6, 2004,
31
433 SCRA 455, 463; citations omitted.

32
G.R. No. 139396, August 15, 2000, 338 SCRA 62, 68.
33
II C.A. Azucena, Jr., The Labor Code 528 (6th ed., 2007); citing I Teller, 314-317.
34
L-31195, June 5, 1973, 51 SCRA 189.
35
Labor Code, Art. 212. DEFINITIONS.
G.R. No. 124678, July 31, 1997, 276 SCRA 619, 627; citing Board of Education v. New
36
Jersey Education Association (1968) 53 NJ 29, 247 A2d 867.
Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc., G.R.
37
Nos. 164302-03, January 24, 2007, 512 SCRA 437, 453-454; citations omitted.
38
The Union does not claim that its January 16, 2001 notice of strike in NCMB-NCR-NS-01-
39
011-01 should be considered as a strike notice for the February 21 to 23, 2001 mass
actions.
Supra note 37, at 456; citing Piñero v. NLRC, G.R. No. 149610, August 20, 2004, 437
40
SCRA 112.
Stamford Marketing Corp. v. Julian, G.R. No. 145496, February 24, 2004, 423 SCRA 633,
41
647; citing Lapanday Workers Union v. National Labor Relations Commission, G.R. Nos.
95494-97, September 7, 1995, 248 SCRA 95, 104.
42
43
44
Andaya v. NLRC, G.R. No. 157371, July 15, 2005, 463 SCRA 577, 582.
45
G & M (Phils.), Inc. v. Cruz, G.R. No. 140495, April 15, 2005, 456 SCRA 215, 222-223.
Association of Independent Unions in the Philippines v. NLRC, G.R. No. 120505, March
46
25, 1999, 305 SCRA 219, 230.
47
Id.
48
Chua v. NLRC, G.R. No. 105775, February 8, 1993, 218 SCRA 545.
49
G.R. No. 123276, July 6, 1995, 245 SCRA 627, 637.
50
No. L-56856, October 23, 1984, 132 SCRA 690.
51
G.R. Nos. 59711-12, May 29, 1985, 150 SCRA 429.
52
No. L-36545, January 26, 1977, 75 SCRA 73, 90.
53
National Brewery and Allied Industries Labor Union v. San Miguel Brewery, Inc., No. L-
54
19017, December 27, 1963, 9 SCRA 847.
55
G.R. No. 120505, March 25, 1999, 305 SCRA 219, 231.
56
Annex "C" of the Position Paper in NLRC Certified Case No. 000203-01.
Rollo (G.R Nos. 158798-99), pp. 338-348; NLRC Records, Certified Case No. 000203-01,
57
Volume II, Toyota’s Position Paper, Annexes "1," "3," "4," "5," "6," "11," "14," "15," "16," and
"18."
58
Id. at 348, 350-351.
59
Id. at 353-356.
60
Id. at 358-359.
61
Id. at 361-362; Annexes "36," "37," "38," and "39."
62
Id. at 364-365; Annexes "40," "41," "42," and "43."
Id. at 500-513; Volume VII, Toyota’s Manifestation, Annexes "A," "B," "C," "D," "E," "F,"
63
"G," "H," "I," "J," "K," "L," "M," and "N."
Id. at 521-530 & 535-541; Annexes "V," "W," "X," "Y," and "Z," and "AA," "BB," "CC," "DD,"
64
"HH," "II," "JJ," "KK," "LL," "MM," "NN," and "OO."
65
Labor Code, Rule I of the Rules Implementing Book VI, Sec. 7.
66
No. L-80609, August 23, 1988, 164 SCRA 671, 680.
67
Id. at 682-683.
68
G.R. No. 147719, January 27, 2006, 480 SCRA 328.
69
G.R. No. 149013, August 31, 2006, 500 SCRA 419.
70
71
G.R. Nos. 143136-37, July 11, 2002, 384 SCRA 504.
72
73
Id.
74
G.R. Nos. 160058 & 160094, June 22, 2007.
75
G.R. No. 150437, July 17, 2006, 495 SCRA 336.
76
G.R. No. 158075, June 30, 2006, 494 SCRA 195.
77
G.R. No. 140992, March 25, 2004, 426 SCRA 319.
78
G.R. Nos. 153664 and 153665, July 18, 2003, 406 SCRA 668.
79
Id. at 701. The dispositive portion reads:
WHEREFORE, the respondents’ appeal is hereby dismissed. The complainant Hotel

is however urged, on humanitarian consideration, to pay the respondents a [sic]
financial assistance computed at one month pay for every year of service.
80
G.R. No. 142824, December 19, 2001, 258 SCRA 724.
81
G.R. Nos. 114521 and 123491, November 27, 1998, 299 SCRA 410.
82
G.R. No. 116128, July 12, 1996, 258 SCRA 724.
83
G.R. No. 105775, February 8, 1993, 218 SCRA 545.

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January 25, 2016

G.R. No. 201595

committee for investigation.

them of a penalty of 30 days suspension, effective June 25, 2007.

stating that the prescribed period for appeal had expired.

the General Membership Assembly were once more unheeded. 19

Ruling of the Labor Arbiter

practices, discrimination, coercion or restraint.

Ruling of the National Labor Relations Commission

b. Not ruling that respondents are guilty of ULP as charged.

"A. Inter-Intra-Union disputes shall include:

"(j) violation of the rights and conditions of membership in a Union or workers’

and the NLRC sustained its Decision.

Ruling of the Court of Appeals

The petition lacks merit.

Section 1. Coverage. – Inter/intra-union disputes shall include:

(c) audit/accounts examination of union or workers’ association funds;

(1) between and among legitimate labor organizations;

(2) between and among members of a union or workers’ association.

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

(b) To cause or attempt to cause an employer to discriminate against an employee,

In administrative and quasi-judicial proceedings, only substantial evidence is necessary to establish

FOR THESE REASONS, the petition is DISMISSED.

Thus, the instant Petition.

claims that the CA erred:

A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION CONFLICTS NEGATES THE

B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR PRACTICES

C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER AGAINST MEMBERS OF

D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL EVIDENCE IN

E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO PETITIONER FOR

The Court partly grants the Petition.

However, petitioner’s charge of unfair labor practices falls within

(b) To cause or attempt to cause an employer to discriminate against an employee, including

(f) To violate a collective bargaining agreement.

In Vital-Gozon v. Court of Appeals, this Court declared, as follows:

which proved costly for petitioner. 1âwphi1

MARIANO C. DEL CASTILLO

ARTURO D. BRION JOSE CATRAL MENDOZA

MARVIC M.V.F. LEONEN

MARIA LOURDES P. A. SERENO

Justices Fernanda Lampas Peralta and Socorro B. Inting.

Section 1. The following grounds for disciplinary action, suspension or expulsion of

1st Offense - Letter reprimand

3rd Offense - Expulsion from Union membership and recommendation for

Cancino, Maga, Montemayor, Fernandez, Torres, Mancenido, Bolo, Quebral, Casañas,

g. To appeal to the General Membership Assembly any arbitrary resolution, policy

Tierra, Bolo, Casañas, Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan,

Quebral, Tierra, Imana, Rendon, Yeban, Cancino, Torres, Montemayor, Mancenido,

Id. at 89-96, 97-108, 231-238, 254-262.

Id. at 109-137, 239-251, 272-277.

RULE XI – INTER/INTRA-UNION DISPUTES AND OTHER RELATED LABOR

SECTION 1. Coverage. - Inter/intra-union disputes shall include:

(a) cancellation of registration of a labor organization filed by its members or

(b) conduct of election of union and workers association officers/nullification

(c) audit/accounts examination of union or workers association funds;

(d) deregistration of collective bargaining agreements;

(e) validity/invalidity of union affiliation or disaffiliation;